General Knowledge

TYPES OF TAXES

A compulsory contribution to state revenue, levied by the government on workers' income and business profits, or added to the cost of some goods, services, and transactions.

THERE ARE MAINLY TWO TYPES OF TAXES

1)DIRECT TAX      2) INDIRECT TAX

DIRECT TAX

direct tax is a tax imposed upon a person or property as distinct from a tax imposed upon a transaction, which is described as an indirect tax. 

Direct taxes are listed below 

INCOME TAX :  Tax levied directly on personal  income is called as income tax.

WEALTH TAX  : A wealth tax (capital tax or equity tax) is a levy on the total value of personal assets, including  bank deposits, real estate, assets in insurance and pension plans, ownership of unincorporated businesses, financial securities, and personal trusts. 

Typically liabilities (primarily mortgages and other loans) are deducted, hence it is sometimes called a net wealth tax .

PROPERTY TAX/CAPITAL GAINS TAX : This is levied on the capital gains arrived by selling property and stocks. Tax rates are different for long term and short term capital gains.

GIFT TAX  : The gift tax is a tax on the transfer of property by one individual to another while receiving nothing, or less than full value, in return. The tax applies whether the donor intends the transfer to be a gift or not. The gift tax applies to the transfer by gift of any property.

CORPORATE TAX : A corporate tax, also called corporation tax or company tax, is a direct tax imposed by a jurisdiction on the income or capital of corporations or analogous legal entities. 

INDIRECT TAX 

A tax levied on goods and services rather than on income or profits . An indirect tax such as sales tax, per unit tax, value added tax (VAT), or goods and services tax (GST) is a tax collected by an intermediary  such as a retail  store from the person who bears the ultimate economic burden of the tax (such as the consumer). 

 

Various types of indirect taxes are

SERVICE TAX  :  Service Tax is a tax which is levied on the Services provided by an entity. services like leasing, internet, transport etc...

Excise Duty in India :  this taxes which  are levied on goods manufactured in india for domestic consumption.

Customs Duty in India :  which are lecied on goods imported to/exported from india.government keeps on changing these rates so as to promote import/export of specific goods.

Securities Transaction Tax (STT)  :  Is a tax payable in India on the value of securities (excluding commodities and currency) transacted through a recognized stock exchange.

Value-added taxation in India was introduced as an indirect value added tax(VAT) into the Indian taxation system from 1 April 2005. The existing general sales tax laws were replaced with the Value Added Tax Act (2005) and associated VAT rules

Stamp Duty. ...Entertainment Tax.... these are also indirect taxes.