Taxation in India – An Overview
Taxation in India An Overview
Taxation in India An Overview
The sphere of India tax is quite wide and includes a wide variety of duties and levies. There are different authorities in India to impose these duties and levies on individuals, companies, businesses, Hindu Undivided Families, and other entities. These authorities include both central and state government. Some insignificant categories of taxes are imposed by local authorities like the local council or municipality.
What the constitution of India says
The power to impose a tax is originated from the Constitution of India, which assigns the authority to impose different duties between the State and the Center. A significant constraint on this authority is Article 265 of the Constitution, which lays down that "No tax shall be levied or collected except by the authority of law." Consequently, every duty or levy imposed or taken has to be supported by an associated regulation, approved either by the State Government or the Upper House.
Central Board of Direct Taxes (CBDT)
The CBDT is a division of the Department of Revenue in the Ministry of Finance, Government of India. The CBDT supplies necessary contributions for guidelines and scheduling of direct taxes in India. It also is in charge of supervision of the direct tax regulations with the IT Department. The CBDT is a constitutional body, operating under the Central Board of Revenue Act, 1963.
Constitutionally recognized system of India Tax
Article 246(2) of the Constitution of India allocates legal authorities comprising taxation between the State Government and Central Government. Schedule VII(3) enumerates these themes with the help of three lists;
List - I involving the domains on which only the Central Government is capable to frame legislations,
List - II involving the domains on which just the state administration can create legislations, and
List - III enumerating the domains on which both the Central Government and State Administration can create legislations simultaneously.
Distinct tax heads are available under the first and second lists. There are no heads in the concomitant list (the Central Government and the state governments have no coexisting authority of taxation).
Overall tax revenue of central and state government adds up to around 18% of Gross Domestic Product of India.
India tax imposed by the Central Government
The list of 13 central heads of taxation is given below:
On income excluding income from cultivation (List I, Entry 82)
Levies of customs including export duties (List I, Entry 83)
Levies of excise on tobacco and other commodities produced or made in India apart from (i) hard drinks for human consumption, and (ii) opium, Indian cannabis and other sedative medicines and tranquilizers, but including therapeutic and sanitary products having alcohol or any material incorporated in (ii). (List I, Entry 84)
Corporation Tax (List I, Entry 85)
On capital value of properties, not including farming area, of companies and individuals, on capital of companies (List I, Entry 86)
Estate duty with regard to property excluding farming area (List I, Entry 87)
Levies with regard to inheritance to property excluding farming area (List I, Entry 88)
Terminal taxes on commodities or travelers, transported by sea, railway, or air; on railway tickets and cargo (List I, Entry 89)
Taxes excluding stamp duties on deals in futures markets and stock exchanges (List I, Entry 90)
On the selling or buying of newspapers and on commercials printed in that (List I, Entry 92)
On selling or buying of commodities excluding newspapers, where such selling or buying happens during business or commerce between states (List I, Entry 92A)
On the shipment of commodities during business or commerce between states (List I, Entry 93A)
All other categories of duties not included in any of the three lists (List I, Entry 97)
India tax levied by State Governments
Given below is a list of 19 state heads under which tax is collected:
Land revenue, containing the evaluation and receipt of revenue, the preservation of land records, inspection for revenue intentions and documentations of rights, and separation of revenues (List II, Entry 45)
On income from cultivation (List II, Entry 46)
Levies with regard to inheritance to income from cultivation (List II, Entry 47)
Estate duty with regard to income from cultivation (List II, Entry 48)
On constructions and properties (List II, Entry 49)
On mineral rights (List II, Entry 50)
Excise duties for commodities listed below, either produced or made within the state (i) hard drinks for human consumption, and (ii) opium, Indian cannabis and other sedative medicines and tranquilizers (List II, Entry 51)
On admission of commodities into a neighboring region for utilization, consumption, or sale in that area (List II, Entry 52)
On the usage or selling of electricity (List II, Entry 53)
On buying or selling of commodities excluding newspapers (List II, Entry 54)
On commercials excluding commercials printed in newspapers and commercials aired on television or radio (List II, Entry 55)
On commodities and travelers transported by roadways or on water channels (List II, Entry 56)
On automobiles fit for traveling on roads (List II, Entry 57)
On boats and pets (List II, Entry 58)
Tolls (List II, Entry 59)
On trades, profession, occupations, and services (List II, Entry 60)
Capitation taxes (List II, Entry 61)
On extravagance, including taxes on leisure, amusement, gaming and betting (List II, Entry 62)
Stamp duty (List II, Entry 63)
Any duty imposed by the government, which is not supported by legislation or is outside the authorities of the lawmaking agency may be declared null and void and illegal.
Income and service tax
These are two major forms of India tax. Income tax in India is regulated by the Income Tax Act, 1961 and it is imposed as a levy on income of individuals and corporate entities. On the other hand, service tax is imposed on service providers, who in turn collect it from the consumers. It was introduced by the Finance Act, 1994 and is collected by the Central Board of Excise and Customs. It is not collected in the state of Jammu and Kashmir.
Other major regulations
Other regulations promulgated by the Parliament include the following:
Wealth Tax Act
Central Excise Act, 1944
Customs Act, 1962
Central Sales Tax Act, 1956
Transaction Tax
Other important regulations introduced by the state government include the following:
Sales tax, on sale of commodities within the state
Excise duties on alcohol, tobacco, and narcotics
Amusement taxes
Stamp duties, on selling of property lying within the state
Accumulate Enormous Wealth With Wealth Managers In India Holi on Indian TV Channels Call Center India – Choosing The Right Company That Will Suit Your Company's Needs Regional Indian Channels and Focus on Holi Celebration Rajesh Khanna - The True Superstar of the Indian Cinema Outsource mechanical product & mechanical component design in India Online Gifts in India Animation Course Basics: What do Popular Animation Schools in India Offer? Exciting India Vacation Packages Cheap Fax Machine in India Latest Watches in India TaeguTec India completes 10 years of successful operations in India and continues to Explore Incredible India with Wonderful Packages