Overview of Taxes in India
Over a period of time India has evolved a well-developed tax structure with clearly demarcated authority between Central and State Governments and local bodies. Indian taxation system has undergone tremendous reforms during last few years with an objective to rationalize taxes in India. Tax rates rationalization and simplification of tax laws is aimed to increase the ease of doing business in India and enforce effective compliances for Taxes in India.
Include Corporate Income Tax, Personal Income Tax and Wealth Tax etc, which are a direct burden on the taxpayer. These taxes have no pass through implications. Income Tax in India have seen tremendous change year after year and still going through a continuous improvement from compliance and digitization perspective. Income Tax in India islevied on individuals & likes, on the income earned on different tax slabs basis the income levels. On the other hand corporates and businesses set up under different forms of entities are typically charged at a flat rate on income earned.
Indirect Taxes are levied indirectly on the public through provision of goods and services. The sellers of the goods and services collect the tax at the time of purchase/consumption by users, which is then collected with the Government periodically. India has recently implemented GST, one of the biggest tax reforms in India after independence, in order to simplify and merge various Indirect taxes in to one. The intention is to make the process of collection and payment smoother with a vast coverage and capture leakages.
GST in India:
GST in India serves as an all-inclusive indirect tax which has helped in eradicating the cascading effect of indirect taxes as a whole. GST in India has subsumed several indirect taxes existed earlier including Sales Tax, Excise Duty, Entertainment Tax, Octroi and Service Tax etc. GST in India It is a multi-stage & destination-based tax.