Tax System in India
The taxation system in the Republic of India is quite well structured. The Department of Revenue of the Finance Ministry of the Government of India is responsible for the computation; levy as well as collection of most the taxes in the country. However, some of the taxes are even levied solely by the Local State Bodies or the respective governments of the different states in the nation.
Changes in the Indian Taxation System
Over a period of 10 years to 15 years, the tax system in the nation has undergone some significant changes. The entire system has been tremendously reformed. The slabs for the imposition of taxes have been modified. Besides that, the rates at which any particular tax is being levied have been restructured as well as the various laws that govern the levying of taxes were being simplified. All of these reformations have resulted in the following:
Easy payment of the levied taxes
The date of 1st April of the year 2005 is marked as the date of the implementation of the V. A. T. or the Value Added Tax by almost all the State Governments as a replacement of the earlier Sales Tax. Some of the states in the Indian Republic, where V. A. T. has not been implemented yet, still levy Sales Tax though. Apart from these, the process of rationalization of the tax laws is still in progress.
Taxes Levied in India
Taxes Levied by the Central Government of India
The Central Indian Government that is officially named as the “Union Government” is responsible for the imposition of both direct taxes as well indirect taxes. Listed below are some of the taxes that are levied by the India Government:
Taxes Imposed by the State Governments
Though the majority of the taxes are levied by the Central Government of the country, there are some taxes, which cannot be levied by them. These kinds of taxes are the one of the sole responsibilities of the governments of the individual states. To name a few of such taxes in India are:
The Octori Tax or Entry Tax is the most famous tax, which is being imposed by the local bodies or the municipal jurisdictions on the goods’ entry.
Tax Incentives in India
The India Government offers tax incentives that are subject to some specified conditions. Such incentives are provided for the following: