Skip to main content

TAX SYSTEM IN INDIA -DIRECT AND INDIRECT TAX

 What is Tax system in India- Taxes in India can be categorized as direct and indirect taxes. Direct tax is a tax you pay on your income directly to the government. Indirect tax is a tax that somebody else collects on your behalf and pays to the government e.g. restaurants, theatres etc. recover taxes from you on goods you purchase or a service you avail. This tax is, in turn, passed down to the government.

Direct Taxes are levied on income, wealth and profit. Direct taxes include income tax, inheritance tax, national insurance contributions, capital gains tax, and corporation tax (a tax on company profits). The burden of a direct tax cannot be passed on.

Indirect taxes take many forms like Goods and Services tax (GST) on restaurant bills and movie tickets. The burden of indirect tax can be passed on. Goods and services tax, which has recently been introduced is a unified tax that has replaced all the indirect taxes that business owners have to deal with.

There are various heads of Income under Direct Tax which are written below:

Head of IncomeNature of Income covered
Income from SalaryIncome from salary and pension
Income from Other SourcesIncome from savings bank account interest, fixed deposits, winning game shows
Income from House PropertyIncome from Rental
Income from Capital GainsIncome from sale of a capital asset such as mutual funds, shares, house property
Income from Business and ProfessionIncome from Business and Profession

Taxpayers in India, for the purpose of income tax includes:

  • Individuals, Hindu Undivided Family (HUF), Association of Persons (AOP) and Body of Individuals (BOI)
  • Firms
  • Companies

Compliance Service in Taxes

  • Income tax Compliance
  • GST Compliance

Labels:

Comments

  1. Arvind29 August 2020 at 16:35

    We are provide GST, Income Tax Compliance , audit Services in India

    ReplyDelete

Post a Comment

Popular posts from this blog

MYSTERY AUDIT – WHAT IS MYSTERY AUDIT? | BENEFITS OF MYSTERY AUDIT

  Mystery audit- What is Mystery Audit? how to process it ? benefits of mystery audit? etc. are common question about mystery audit, We are used mystery audit to measure the quality of service and actual performance, compliance with regulation, or to gather specific information about products and services. What is Mystery Audit? Mystery audit is used to measure the quality of service or compliance with regulation, or to gather specific information about products and services. The audit yields better results when done by third-party companies as the stores would not be aware of the product/service being evaluated. A mystery Auditor is a paid consumer who is hired to shop in stores and collect data. Think of mystery auditors as “ undercover customers”  sent in to observe, interact, and report on other customers and store employees. Mystery Auditors are typically employed by a third-parties rather than the store or company personnel itself. Benefits of Mystery Audit to ...
Post a Comment
Read more

HOW TO HANDLE THE TAX IN WHEN AVAILING SERVICES FROM UNAUTHORIZED SECTOR

  Understand the GST: Mechanisms- Two mechanisms are there: a) Fore-ward Charge b) Reverse Charge What is Fore-ward Charge Mechanism? Fore-ward charge means liability to pay the taxes on the goods & services is on the supplier. E.g.: X sells goods for Rs.1 Lac to A, X will charge & pay tax on the said goods (say 5% GST) Rs 5000. What is Reverse Charge Mechanism? Reverse charge means the liability to pay tax by the  recipient of supply of goods or services  or both instead of the supplier of goods or services or both. E.g.: Z sells goods for Rs.1 Lac to B, in this case B will pay tax on the said goods (say 5% GST) Rs 5000 on the basis of goods/services receipt. On which supplies Fore-ward/Reverse charge will apply? In case of goods right now no such goods has been notified yet particularly on which tax liability is be discharged by reverse charge mechanism. However, if the goods are bought by the registered person under GST is from the un-registered person then the...
Post a Comment
Read more

NEW FINANCE PANEL AND A TASK FORCE: WHAT CAN BE EXPECTED FROM NEW TAX LAWS

  The cabinet approved the constitution of the fifteenth finance commission. The fifteenth finance commission will determine the devolution formula for the revenue sharing between Centre and state (from 2020 to 2025). It will also have its task cut with the new tax system. The panel will have to deal with significant changes in the taxation framework, such as GST before making recommendations. Finance Minister Arun Jaitley announced that the cabinet had given an in-principle approval to form the commission and negotiate its terms of reference.The commission, whose members and terms of reference will be notified after finalisation, will make crucial recommendations which will be more in tune with India’s economic needs. The recommendations made by Fourteenth Finance Commission were accepted by the Government. These recommendations will be brought into effect until March 31, 2020. As per the recommendation, the states’ share of the central pool of taxes was increased from 32% to 42%....
Post a Comment
Read more