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Direct Tax
- A direct tax is that tax, which is born by the person on whom it is levied. A direct tax cannot be shifted to other person.
Indirect Tax
- These are those taxes, which have their primary burden or impact on one person. But that person succeeds in shifting his burden on to others.
- Indirect taxation is policy often used to generate tax revenue. Indirect tax is so called as it is paid indirectly by the final consumer of goods and services while paying for purchase of goods or for enjoying services.
Examples :
Direct Tax
|
Indirect
Tax
|
Personal
Income Tax
|
Excise
Duty
|
Corporation
Tax
|
Custom
Duty
|
Wealth
Tax
|
Sales
Tax
|
Gift
Tax
|
Service
Tax
|
Land
Revenue
|
Value
Added Tax
|
Profession
Tax
|
Passenger
Tax
|
Stamp
Duty and Registration Charges
|
Entertainment
Tax
|
Securities
Transaction Tax
|
Electricity
Duty
|
Banking
Cash Transaction Tax
|
Motor
Vehicles Tax
|
The Tax Structure in India
India has got quite developed and simplified tax structure. It contains 3 tiers, those are
- The Union Government
- The State Government
- The Rural and Urban Local Bodies or Municipal Jurisdictions
these three tiers are empowered with the imposition of the different duties and taxes, which are prevalent in the country. The Central Government is mainly responsible for levying Income Tax. However, they do not impose taxes on the income that is earned from agriculture. The agricultural income tax can be imposed by the government of a respective state.
Major Changes in Tax Structure in India
Since the year 1991, the Indian tax system has undergone some major changes. These changes were made in accordance with the country's W. T. O. commitments as well as the liberal financial policies. Some of the major changes in the structure of taxation in the nation are as follows:
- Lowering the tax on corporate income
- Reduction in the rate of excise duties as well as custom duties. Custom duty was reduced from the rate of 220 % in 1991 to 30 % in 2002.
- Widening the base of tax
- Toning up the administration of taxation
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what is the diff b/w customs and excise duty?
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