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Comprehensive list of various taxes

levied on any start-up in India
Various types of Taxes are levied on any business in India and through this
post we would be giving a brief overview of the major taxes that are
levied on any business in India.
Taxes can basically be divided into 2 Categories
1. Direct Tax: These are the taxes which are levied directly on
the Income earned and is therefore known as Direct Taxes.
2. Indirect Tax: These taxes are not directly levied on the Income
earned but are levied on the Expenditure.

DIRECT TAX
These types of taxes are levied by the Central Govt and therefore the
rates of taxes are uniform throughout the country. Various types of Direct
Taxes are:1.
Income Tax:
The most common form of tax is the Income Tax which is levied on the
Income of all Individuals. Different Rates of Taxes are payable depending
on the Income of an Individual and the Tax Slab Rates for the year 201213 are as follows:Income Tax Slab Rates for General Tax Payers
Income

Tax Rate

0-2,00,000

Nil

2,00,001-5,00,000

10%

5,00,001-10,00,000

20%

10,00,000+

30%

Income Tax Slab Rates for Senior Citizens i.e. above the age of 60
Income

Tax Rate

0-2,50,000

Nil

2,50,001-5,00,000

10%

5,00,001-10,00,000

20%

10,00,000+

30%

Income Tax Slab Rates for Very Senior Citizens i.e. above the age of 80

Some of these taxes are levied by the Central Govt and the rest by the State Govt. If a person has unproductive assets worth more than Rs. The Govt has now started focusing more on Indirect Taxes as compared to the Direct Taxes because evasion of Indirect Taxes is very difficult. and the govt expects that a substantial portion of the total taxes collected in India would be in the form of Indirect Taxes in future. INDIRECT TAX This tax is levied at the time of making any expenditure irrespective of whether it is being made for providing a service or at the time of purchasing any goods. 30 Lakhs. Central Govt Taxes 1.001-10. Wealth Tax: Wealth Tax is a Tax charged on the net wealth of an Individual. but still this limit of Rs.0. Although this Tax is collected from the person who is rendering the service/selling the goods..00. it can be recovered from the recipient of service/ buyer of goods. 30 Lakhs is too low as even a small house in India costs over Rs. Income Tax is charged at a flat rate of 30% The due dates for filing Income Tax Return is 31st July and 30th September depending on whether the Individual is required to get his accounts audited or not 2. Service Tax @ 12% is payable on the value of services.00. Although many assets are not included in the purview of Rs.000+ 30% *In case of firms and companies. 10 Lakhs p. The rates of taxes which are levied by the State Govt differ from State to State. if the turnover of the provider of service does not exceed Rs. 30 Lakhs.000 Nil 5. he is exempted from charging . Wealth Tax is liable to be paid @ 1%. Service Tax: Whenever any person avails of any service.000 20% 10.Income Tax Rate 0-5. Rarely anyone pays wealth tax in India and even the govt is very lenient in collecting Wealth Tax and this tax is only there in the books and not applied practically.00.a. However. 30 Lakhs.

However. but with the Introduction of Negative List of Services w. However. except on the following goods on which Excise Duty is levied by the State Govt:i.e. it would be assumed that the Total Value of the Services is inclusive of the Service Tax and he would have to deposit the Service Tax portion with the Central Govt. If he does not charge the Service Tax. he is mandatorily required to collect Service Tax. Customs Duty Customs Duty also popularly known as Import Duty is levied on goods that are imported from any country into India. Service Tax when introduced in the year 1994 and was earlier levied only on a specified list of services.Service Tax from his customers. 10 Lakhs. Excise Duty on all Goods is levied by the Central Govt. Alcoholic Liquor for Human Consumption Opium and other Narcotic Drugs 3. Customs Duty was introduced in India so as to safeguard the Indian Industry as the goods imported from abroad were cheaper than the goods produced in India. but now that the Indian manufacturing Industry has also matured. the end consumer preferred to purchase the imported goods rather than the Indian made goods as a result of which the Indian economy was suffering. Excise Duty: Central Excise Duty is an indirect tax levied on those goods which are manufactured in India for Home Consumption. The incidence of applicability of Excise Duty is levied as soon as the goods are manufactured. Service Tax has now been levied on all services except those specifically exempted.f 1st July 2012. Customs duties are being slowly reduced so as to equate the competition between the locally made goods and the imported goods. State Govt Taxes . As the goods imported were cheap. and is usually collected at the time of entry into India itself. Different Rates of Excise Duty is levied on different goods. Rate of Customs Duty is also different for different goods depending on the nature of the goods. ii. if the turnover of the provider of service is more than Rs. 2. Earlier the Import Duties were very high. it is to be paid to the Govt at the time of removal of goods from the place of manufacture.

The rate of VAT is different for each type of goods. 05-01-1957. This tax is governed by the Central Sales Tax (CST) Act. So as to ensure proper collection of taxes. 3. Professional Tax Professional Tax is in its nascent stages in India and only very few states are charging this tax on the incomes of Salaried.e. 1956 which came into force w. Self-employed. the rate of tax is lower and for luxury goods – the rate of taxes is much higher. However. Central Sales Tax This tax is applicable when the goods are transferred from one state to another for the purpose of selling the goods in the other state.e. VAT (Value Added Tax): VAT is a form of Sales Tax which is levied on the Sale of any good. Entertainment Tax . 2. Value Added Tax was introduced which is a multi-point system of collection of taxes. Merchants etc. Over 130 Countries have introduced the system of VAT in the last 3 decades and India was amongst the last few to introduce this tax. there were many loopholes in this form of tax and the traders usually evaded paying Sales Tax. the system of VAT i. The system of VAT is such that it is first levied on the first seller of goods and then the next seller only pays VAT on the Value Addition done by him and not on the Total Value of the Goods. In other words. this tax is levied on Inter-State Sales.The rate of tax of the below mentioned taxes various from State to State:1. Earlier Sales Tax was levied in India wherein tax used to be collected at a single point (first/last) from the transactions involving the sale of goods. For necessities. Various Other Taxes levied by the State Govt are:1. Different states have different modus-operandi of levying this type of tax and are only charging a maximum of a few thousand rupees only. Every State has different set of rules for levy of this type of tax and the category of individuals who come under the purview of this tax purely depends on the state from where they are working. VAT was introduced in India from 1st April 2005.f. The entire revenue accruing by the levy of Central Sales Tax is collected and kept by the State in which the sale originates.

e. VAT would be levied only on the Value of Goods Sold and Service Tax would be levied only on the Services provided. 100. This thing would become clearer by the following example:Value of Service: Rs. not only is the food being sold but the services are provided. For ex: Food Served in a Restaurant. However. Stamp Duty 3. After showing this bifurcated value on the Invoice. wherein one type of tax would be levied only on a certain percentage of the total invoice value and the other tax would be levied on the remaining invoice value. 12 and not on the value of service i. In such cases. However. Road Tax on Vehicles Composite Sales There may be some sales wherein more than 1 type of tax may be levied.12 Total Tax Rs. 100 Service Tax @12%: Education Cess (2% of Rs. 12. In a restaurant. In such cases. Education Cess and SHEC would be levied only on amount of tax i. 0. both VAT and Service Tax are liable to be levied on the same. this is not levied on the Total Amount but only on the amount collected as Tax. 0.36 As explained with the help of the above example. 12) Rs. . it is practically very difficult to segregate the two into value of goods sold and the value of services provided. Therefore. The Business Community had persuading the Govt to remove these different types of taxes and to only a single uniform tax system for collection of Indirect Taxes. Education Cess & SHEC Education Cess @ 2% and Secondary and Higher Education Cess (SHEC) @ 1% are also levied over and above these taxes. 12 Rs. GST: Goods and Service Tax There are some many different types of Indirect Taxes that it becomes difficult for a businessman to understand the nitty-gritty’s of each of these taxes.2.24 SHEC (1% of Rs.e. Rs. it is important to bifurcate the value of goods and services and explicitly show the same on the Invoice. 12) Rs. the govt issues an Abatement Scheme. Rs.

e. GST is still in its planning phase and would have to cross many hurdles before it becomes a reality. The Implementation of GST is still a few years away and till the time GST is not implemented. all the existing taxes would continue to be levied. .The Govt has agreed to remove all these taxes in due course of time and introduce a single tax system by the name of GST i. Goods and Service Tax.