Taxation in India
The taxation system in India is such that the taxes are levied by the
Central Government and the State Governments. Some minor taxes
are also levied by the local authorities such as the Municipality and
the Local Governments.
To run the government and manage the affairs of a state, money is
required. So the government imposes taxes in many forms on the
incomes of individuals and companies.
Classification of Taxes
Broadly taxes are divided into two categories:
1. Direct Taxes
2. Indirect Taxes
Direct Taxes
A direct tax can be defined as a tax that is paid directly by an
individual or organization to the imposing entity (generally
government). A direct tax cannot be shifted to another
individual or entity. The individual or organization upon which
the tax is levied is responsible for the fulfillment of the tax
payment.
The Central Board of Direct Taxes deals with matters related to
levying and collecting Direct Taxes and formulation of various
policies related to direct taxes.
A taxpayer pays a direct tax to a government for different
purposes, including real property tax, personal property tax,
income tax or taxes on assets, FBT, Gift Tax, Capital Gains
Tax, etc.
Indirect Taxes
The term indirect tax has more than one meaning. In the
colloquial sense, an indirect tax such as sales tax, a specific
The taxation system in India is such that the taxes are levied by the
Central Government and the State Governments. Some minor taxes
are also levied by the local authorities such as the Municipality and
the Local Governments.
To run the government and manage the affairs of a state, money is
required. So the government imposes taxes in many forms on the
incomes of individuals and companies.
Classification of Taxes
Broadly taxes are divided into two categories:
1. Direct Taxes
2. Indirect Taxes
Direct Taxes
A direct tax can be defined as a tax that is paid directly by an
individual or organization to the imposing entity (generally
government). A direct tax cannot be shifted to another
individual or entity. The individual or organization upon which
the tax is levied is responsible for the fulfillment of the tax
payment.
The Central Board of Direct Taxes deals with matters related to
levying and collecting Direct Taxes and formulation of various
policies related to direct taxes.
A taxpayer pays a direct tax to a government for different
purposes, including real property tax, personal property tax,
income tax or taxes on assets, FBT, Gift Tax, Capital Gains
Tax, etc.
Indirect Taxes
The term indirect tax has more than one meaning. In the
colloquial sense, an indirect tax such as sales tax, a specific
