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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

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  1. Arvind29 August 2020 at 16:35

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

    ReplyDelete

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