Benet
Active member
Taxes can be divided into two main categories, each of which is further divided into smaller groups. Direct tax and indirect tax are the two main types of taxes. There are many different subcategories of small cess taxes. There are various acts that control these taxes within the Income Tax Act.
1. Direct Tax
Taxes that an individual or business must pay directly to the government are known as direct taxes. The Central Board of Direct Taxes ignores direct taxes (CBDT).
Direct taxes are non-transferable to any other person or business.
Sub-categories of Direct Taxes
The direct tax subcategories are as follows:
Income tax: This is a tax imposed on profits or annual income that is paid directly to the government. Anyone who receives income of any type is required to pay income tax. The annual tax exemption threshold for people under 60 is Rs. 2.5 lakh. The maximum tax-exempt amount for people aged 60 to 80 is Rs. 3 lakh. The maximum amount of tax exemption for people over 80 is Rs. 5 lakh. There are several tax brackets for different income levels. Taxes must be paid by both people and legal entities. All Artificial Judicial Persons, the Hindu Undivided Family (HUF), the Body of Individuals (BO), and the Association are among these.
Capital gains: When a property is sold or money is earned from an investment, capital gains tax is assessed. It may result from either long-term or short-term capital gains on an investment. This encompasses any kind trades that are measured against their value.
Securities Transaction Tax: This tax is imposed on trading in securities and the stock market. The tax is assessed on both the share price and the price of securities traded on the ISE (Indian Stock Exchange).
Prerequisite Taxes: These taxes are imposed on the various perks and advantages that an organization offers to its employees. Whether official or personal, the rewards and perks must have a stated purpose.
Corporate tax is the term used to describe the income tax that a business must pay. It is based on the various tax brackets that the revenue belongs to. The following are the corporate tax subcategories:
The tax known as the "dividend distribution tax" is imposed on the dividends that businesses give to their investors. It relates to the gross or net return on investment that an investor obtains.
The tax on fringe benefits is imposed on the extras that an employee receives from their employer. This includes things like lodging costs, transportation costs, leave travel reimbursements, entertainment costs, employee contributions to retirement funds, employee welfare costs, Employee Stock Ownership Plan (ESOP) costs, etc. Alternative Tax Minimum.
(MAT): Under Section 115JA of the IT Act, businesses pay the IT Department via MAT. Industries involved in infrastructure and power are exempt from MAT for their businesses.
2. Indirect tax
The term "indirect tax" refers to taxes assessed on goods and services. The service or goods' provider is responsible for collecting indirect taxes. Prices for goods and services are increased by the tax. As a result, the cost of the commodity or service increases. The Goods and Services Tax, or GST, is what is being used here.
In India, a consumption tax known as GST is imposed on the exchange of goods and services. GST must be applied at every stage of the creation of any commodities or value-added services. The parties involved in the production process are supposed to receive a return (and not the final consumer). Other taxes and fees, including Value Added Tax (VAT), Octroi, Customs Duty, Central Value Added Tax (CENVAT), as well as Excise and Customs Taxes, were eliminated as a result of the introduction of GST. Electricity, alcoholic beverages, and petroleum products are among the goods and services that are exempt from GST taxes. The individual state governments tax these in accordance with the old tax system.
1. Direct Tax
Taxes that an individual or business must pay directly to the government are known as direct taxes. The Central Board of Direct Taxes ignores direct taxes (CBDT).
Direct taxes are non-transferable to any other person or business.
Sub-categories of Direct Taxes
The direct tax subcategories are as follows:
Income tax: This is a tax imposed on profits or annual income that is paid directly to the government. Anyone who receives income of any type is required to pay income tax. The annual tax exemption threshold for people under 60 is Rs. 2.5 lakh. The maximum tax-exempt amount for people aged 60 to 80 is Rs. 3 lakh. The maximum amount of tax exemption for people over 80 is Rs. 5 lakh. There are several tax brackets for different income levels. Taxes must be paid by both people and legal entities. All Artificial Judicial Persons, the Hindu Undivided Family (HUF), the Body of Individuals (BO), and the Association are among these.
Capital gains: When a property is sold or money is earned from an investment, capital gains tax is assessed. It may result from either long-term or short-term capital gains on an investment. This encompasses any kind trades that are measured against their value.
Securities Transaction Tax: This tax is imposed on trading in securities and the stock market. The tax is assessed on both the share price and the price of securities traded on the ISE (Indian Stock Exchange).
Prerequisite Taxes: These taxes are imposed on the various perks and advantages that an organization offers to its employees. Whether official or personal, the rewards and perks must have a stated purpose.
Corporate tax is the term used to describe the income tax that a business must pay. It is based on the various tax brackets that the revenue belongs to. The following are the corporate tax subcategories:
The tax known as the "dividend distribution tax" is imposed on the dividends that businesses give to their investors. It relates to the gross or net return on investment that an investor obtains.
The tax on fringe benefits is imposed on the extras that an employee receives from their employer. This includes things like lodging costs, transportation costs, leave travel reimbursements, entertainment costs, employee contributions to retirement funds, employee welfare costs, Employee Stock Ownership Plan (ESOP) costs, etc. Alternative Tax Minimum.
(MAT): Under Section 115JA of the IT Act, businesses pay the IT Department via MAT. Industries involved in infrastructure and power are exempt from MAT for their businesses.
2. Indirect tax
The term "indirect tax" refers to taxes assessed on goods and services. The service or goods' provider is responsible for collecting indirect taxes. Prices for goods and services are increased by the tax. As a result, the cost of the commodity or service increases. The Goods and Services Tax, or GST, is what is being used here.
In India, a consumption tax known as GST is imposed on the exchange of goods and services. GST must be applied at every stage of the creation of any commodities or value-added services. The parties involved in the production process are supposed to receive a return (and not the final consumer). Other taxes and fees, including Value Added Tax (VAT), Octroi, Customs Duty, Central Value Added Tax (CENVAT), as well as Excise and Customs Taxes, were eliminated as a result of the introduction of GST. Electricity, alcoholic beverages, and petroleum products are among the goods and services that are exempt from GST taxes. The individual state governments tax these in accordance with the old tax system.
