INDIAN TAX SYSTEM

India has a very simplified tax structure between Central and State Governments and local bodies. 

• Central Government has the authority to levy taxes on income, custom duties, central excise and service tax. 
• Value Added Tax or VAT , stamp duty, State Excise, land revenue and tax on professions are levied by the State Governments.
• Local bodies are empowered to levy tax on properties, octroi and for utilities like water supply, drainage etc.

In last 10-15 years, Indian taxation system has undergone tremendous reforms. The tax rates have been rationalized and tax laws have been simplified resulting in better compliance, ease of tax payment and better enforcement. The process of rationalization of tax administration is ongoing in India. Since April 01, 2005, most of the State Governments in India have replaced sales tax with VAT.

Taxes Levied by Central Government

•  Direct Taxes

           1. Tax on Corporate Income

           2. Capital Gains Tax

           3. Personal Income Tax

           4. Tax Incentives

           5. Double Taxation Avoidance Treaty

• Indirect Taxes

           1. Excise Duty

           2. Customs Duty

           3. Service Tax

           4. Securities Transaction Tax

Taxes Levied by State Governments and Local Bodies

           

           1. Sales Tax/VAT

           2. Other Taxes

Thanks

Rishi Kansal