Important Taxes imposed in India
Important Taxes imposed in India
» Tax on Income and Wealth :
The central government imposes different types of tax on income and wealth, viz. income tax, corporate tax, wealth tax and gift tax. Out of them income tax and corporate tax are more important from the revenue point of view.
» Personal Income Tax :
Personal income tax is generally imposed on an individual combined Hindu families and total income of people of any other communities.
» In addition to tax, separate surcharges are also imposed some times.
» Agricultural income in India is free from income tax.
» Corporate Tax :
Corporate Tax is imposed on Registered Companies and Corporations.
» The rate of corporate tax on all companies is equal. However, various types of rebates and exemptions have been provided.
» Custom Duties :
As per the Constitutional provisions, the central government imposes import duty and export duty both. Import and Export duties are not only sources of income but with the help of it the central government regulates the foreign trade.
» Import Duties :
Generally import duties are ad-velorem in India. It means import duties are imposed on the taxable item on percentage basis.
» Export Duties :
Export Duties are more important, compared to Import Duties in terms of revenue and regulation of foreign trade.
» Excise Duties :
Excise duties are commodity tax as it is imposed on production of an item and it has no relevance with its sale. This is the largest source of revenue for the Central Government.
» Except liquor, opium and other drugs, production of all the other items is taxable under Central Excise Duties.
» One Coin and One Rupee note belong to "Legal Tender Money" category.
» M1 is known as Narrow Money.
» M3 is known as Broad Money.
Surcharge and Cess
Surcharge
» Surcharge is a fee or other charge that is added to the cost of a good or service.
» A surcharge is typically added to an existing tax and may not be included in the stated price of a good or service. It may be a temporary measure to defray the cost of increased commodity pricing, such as with a fuel surcharge, or it may be permanent.
» A surcharge does not have to be imposed by the government. A fee or other charge that is added to the cost of a good or service.
Cess
» Cess is a tax that is levied by the government to raise funds for a specific purpose.
» A cess is also different from the usual taxes such as personal income tax, excise duty, and customs duty in another respect.
» All the taxes collected by the government usually go into the Consolidated Fund of India (CFI), which can be spent on any legitimate activity. But the collections from a cess are required to be kept outside of the CFI to be spent only on the specific purpose for which it was levied.