Tax

Tax is a financial charge assessed and imposed on taxpayer by a government for public expenditures.

Direct Tax: Which we pay directly to the central government.
- Income Tax - On the income of individuals, firms other than companies.
- Corporate Tax - Levied on the income of companies.
- Wealth Tax - On specific assets owned by certain persons including individuals and companies.
- Gift/Inheritance/Estate Tax: On receiving gift from someone. Applicable if it exceeds Rs.50000 in a year.
- Property/Capital Gains Tax
Indirect Tax: Which we pay indirectly to the central department.
- Global Service Tax (GST)
- Service Tax - On service transactions.
- Custom Duty - On goods due to transporting across international borders.
- Excise Duty - On manufactured goods.
- Security Transaction Tax (STT) - On every transaction at stock exchange (buy or sell) (Introduced due to avoiding capital gain tax).
- Sales Tax and Value Added Tax(VAT) - Major source of revenue of state government on sale of goods.
- Anti Dumping Duty - Goods exported from other countries at lower price. Imposed not exceed the margin of dumping as per the goods.

There are 2 boards under government. 1) Central Board of Direct Taxes CBDT 2) Central Board of Excise and Customs (CBEC).
Central Value Added Tax (CENVAT) goes to central government where as VAT goes to state government.
State government earns from VAT, Entertainment Tax, Toll Tax and Professional Tax etc.
Tax Deducted at Source (TDS) deducted by the person who is making payment. Final Tax Payable = Tax Payable on Total Taxable Income - TDS already Deducted.
Section 80C can take of INR 1,50,000 from Gross Income through Public Provident Fund (PPF), Fixed Deposit (FD) and Mutual Funds or (Equity Linked Savings Scheme) ELSS.

Books