what are the different types of taxes on india

what are the different types of taxes on india

In India, taxes are broadly categorized into two types: Direct Taxes and Indirect Taxes. Each of these categories has different types of taxes within them.

1. Direct Taxes

These taxes are levied directly on individuals, companies, and organizations. The burden of these taxes cannot be transferred to others.

Income Tax: Levied on the income of individuals, Hindu Undivided Families (HUFs), and companies. It includes taxes on both individuals' personal income and corporate income.

Corporate Tax: Paid by companies on their profits. This includes both domestic and foreign companies operating in India.

Wealth Tax: Tax levied on the wealth of individuals, including assets like property, jewelry, etc. (Note: Wealth tax has been abolished as of 2015).

Capital Gains Tax: Levied on the profit from the sale of assets such as property, stocks, bonds, etc. It is divided into short-term and long-term capital gains.

Estate Duty: This tax was levied on the value of the estate of a deceased person. It was abolished in 1985.

2. Indirect Taxes

These taxes are levied on goods and services rather than on income or wealth. The burden of these taxes can be passed on to the end consumer.

Goods and Services Tax (GST): The most significant indirect tax in India, implemented in 2017. It is a single tax on the supply of goods and services and replaced various state and central taxes like VAT, excise, and service tax.

CGST (Central Goods and Services Tax)

SGST (State Goods and Services Tax)

IGST (Integrated Goods and Services Tax, for inter-state transactions)

Customs Duty: Levied on goods imported into or exported from India. This tax aims to regulate imports and exports.

Excise Duty: Tax on the production or manufacture of goods. It was mostly replaced by GST but still applies to a few specific goods like alcohol and petroleum products.

Service Tax: A tax on services provided. This has been subsumed under GST, but it was previously levied by the central government.

Value Added Tax (VAT): A tax on the value added to goods at each stage of production or distribution. It was replaced by GST but is still applicable for certain goods like alcohol and petroleum products at the state level.

Other Taxes:

Stamp Duty: Levied on documents related to property transactions, such as sale deeds, agreements, etc.

Land Revenue: Taxes collected by state governments on land or real property. The rates vary by state.

Property Tax: Levied by local municipal authorities on the ownership of property or land.

India’s tax structure is extensive and complex, with both central and state governments imposing taxes on various goods, services, and transactions.