TYPES OF TAXES IN INDIA

DIRECT TAXES
# The government has budgeted the direct
tax collection target at Rs 7.98 lakh crore for
the current financial year, which is based on
the assumption that the economy would grow
at 8-8.5 per cent.
# Grossdirect taxcollection during AprilDecember of the Financial Year 2014-15 was at
Rs 5,46,661 crore as against Rs 4,84,063 crore
during 2013-2014.

1. Income tax:

Gross
collection
of
personalincome tax stood at Rs
1,90,391 crore for the financial
year 2014-15 as against Rs
1,69,059 crore collected during
the same period last year.

2. Corporate tax:
Corporate Taxes are annual taxes payable
on the income of a corporate operating in
India.
Gross collection ofcorporatetax stood at
Rs 3,50,494 crore for the financial year
2014-15 as against Rs 3,10,754 crore
collected during the same period last
year.
The Corporate Tax Rate in India stands at
34.61 percent.

3. Capital Gains Tax:# If you saleproperty, shares, bonds &

precious material etc. and earn profit
on it within predefined time frame you
are supposed to pay capital gains tax.
# The capital gain is the difference
between the money received from
selling the asset and the price paid for
it.

#Capital gain tax is categorized into

short-term gains and long-term gains.
1. The Long-term Capital Gains Tax is
charged if the capital assets are
kept for more than certain period 1
year in case of share and 3 years in
case of property. (20%)
2. Short-term Capital Gains Tax is
applicable if these assets are held
for less than the above-mentioned
period.(15%)

4. Securities Transaction Tax:STT(Securities Transaction Tax )

is
applicable on every transaction done at
stock exchange.
Securities Transaction Tax (STT) stands
at Rs 4940 crorefor the financial year
2014-15.

5. Perquisite Tax:
Earlier to Perquisite Tax we had a tax
called FBT(Fringe Benefit Tax).
The employee will have to pay tax on
the difference between the Fair Market
Value (FMV) of the shares on the date of
exercise and the price paid by him/her

Indirect Taxes

1. Sales Tax :Sales tax charged on the sales of

movable goods. Sale tax on Inter State
sale is charged by Union Government,
while sales tax on intra-State sale (sale
within State) is charged by State
Government.
Rate: The Sales Tax Rate in India
stands at 12.36 percent

2. Service Tax:
# Collected by CBEC-Central board of
excise and customs.
# Doesnt apply to Jammu and
Kashmir.
# Doesnt apply to person/company
selling less than Rs.10 lakhs worth
services in a financial year
Normal Service tax rate with effect
from 1st June 2015 is 14%

Service tax
Services kept out?
Two types- 1. negative list and
2. exempted list
Exempted:
These services are exempted
(temporarily) by Government
notification.
Some examples- veterinary healthcare,
legal service, cord blood bank, sportsrecreation etc.

2. Negative list:
17 services in negative list- some examples:
1.
2.
3.
4.

passenger transport via road and inland waterway,

goods transport
funeral services.
services provided by Government /local authority
Post card, inland letter, money order etc. kept out of
service tax. but premium services like speedpost,
express parcel- service tax applies

5. RBIs services (Except when RBI acts as bankers

bank)
6. foreign diplomatic mission in India
7. agriculture related services

3. Custom duty & Octroi (On Goods):Custom Duty is a type of indirect tax
charged on goods imported into India. This
duty is often payable at the port of entry
(like the airport). This duty rate varies based
on nature of items.

Octroi is tax applicable on goods entering in

to municipality or any other jurisdiction for
use, consumption or sale.

4. Excise Duty:# An excise or excise duty is a type of

tax charged on goods produced within
the country.
# If you are producer / manufacturer of
goods or you hire labour to manufacture
goods you are liable to pay excise duty.
Central Excise duty to be rounded off to
12.5 %

5. Professional Tax :If you are working professionally you

need to pay professional tax.
Professional tax is imposed by
respective Municipal Corporations or
state govts. Most of the States in India
charge this tax.
The rate on which this tax is applicable
is not same in all states

6. Entertainment Tax:
This is imposed by state government
on every financial transaction that is
related to entertainment such as
movie tickets, major commercial shows
exhibition,
broadcasting
service,
DTHservice, cable service etc.

7. Education Cess , Surcharge:Education cess is deducted and used for

Education of poor people in INDIA. Some
taxes such as income tax, excise duty etc.
in India are subject to an education cess,
which is 2% to 3% of the total tax payable.
Surcharge - A surcharge is typically added
to an existing tax,
The amount of income-tax shall be increased
by a surcharge at the rate of 10% of such
tax.