In India, every individual with an income is required to pay taxes but many of us are still not aware of the types of taxes in India. Therefore, we have covered major types of taxes for you. Hold your tea and Read On!
What Is Direct Tax?
Direct taxes are sums of money the taxpayer pays directly to the government that cannot be transferred. The direct include income tax, corporate taxes, capital gains taxes, etc. The Central Board of Direct Taxes (CBDT) is responsible for managing and regulating these taxes.
Types of Direct Taxes In India
Income tax -
Income tax is the most common form of direct tax that goes directly to the account of the Government. This tax is levied on income earned by individuals in a financial year. The applicable tax rates are determined by the income tax department depending on the salary of individuals.
Corporation Tax -
Corporation tax is another type of direct tax that is levied on net profit and income that businesses generate from their commercial activities. This tax is levied based on the type of the entity whether it is in India or abroad.
Capital gains tax -
Capital gain is referred to as a gain or profit that individuals acquire from the sale of a capital asset, it can be stocks, property, bonds, or real estate. There are two types of capital gains tax 1. Long-term capital gains (LTCG) 2. Short-term capital gains (STCG).
Securities Transaction Tax -
A type of direct tax known as the securities transaction tax is assessed on gains from securities such as futures and options, stocks, and trading done on domestic exchanges. The taxation also differs depending on the type of securities. The securities transaction tax is collected and levied by the central government of India.