Taxation in India : Taxes form an important source of income to the Government. Direct taxes are levied on taxable income earned by individuals and corporate entities and indirect taxes are levied on the sale and provision of goods and services respectively. The taxation in India is such that the taxes are levied by the Central Government, State Governments and some by the local authorities such as the Municipality and the Local Governments.
Table of Contents
Taxation in India : Major Central and State Taxes
Major Central and State Taxes in India include :
Major Central Taxes
- Income Tax
- Central Goods & Services Tax (CGST)
- Integrated Goods & Services Tax (IGST)
- Customs Duty
Major State Taxes
- State Goods & Services Tax (SGST)
- Stamp Duty & Registration
Taxation in India : Major Central Taxes
Individual taxpayers will need to pay the income tax based on the slab system they fall under based on their income. Individuals with a higher income will need to pay more tax. The slab system was introduced to maintain a fair tax system in the country.
New Regime Income Tax Slab Rates for Individuals
|Income Tax Slab||Tax Rate|
|Up to Rs.2.5 lakh||Nil|
|Above Rs.2.50 – Rs.5 lakh||5% of the total income that is more than Rs.2.5 lakh|
|Above Rs.5 lakh – Rs.7.50 lakh||10% of the total income that is more than Rs.5 lakh + Rs.12,500|
|Above Rs.7.50 lakh – Rs.10 lakh||15% of the total income that is more than Rs.7.5 lakh + Rs.37,500|
|Above Rs.10 lakh – Rs.12.50 lakh||20% of the total income that is more than Rs.10 lakh + Rs.75,000|
|Above Rs.12.50 – Rs.15 lakh||25% of the total income that is more than Rs.12.5 lakh + Rs.1,25,000|
|Above Rs.15 lakh||30% of the total income that is more than Rs.15 lakh + Rs.1,87,500|
Central Goods & Services Tax (CGST)
CGST is a tax levied on Intra-state supplies of both goods and services by the Central Government and will be governed by the CGST Act. Section 8 of the GST Act mentions that the rate of tax will not exceed 14% each. It subsumes taxes such as Central Excise Duty and Central Surcharges.
Integrated Goods & Services Tax (IGST)
IGST is a tax levied on all Inter-State supplies of goods and services. IGST is also applicable on any supply of goods and services in both cases of import into India and export from India.
Customs duty in India is defined under the Customs Act, 1962 and governed by Central Board of Excise & Customs (CBEC). Government levies duty on exports and imports, prohibit export and import of goods, procedures for importing/exporting and offenses, penalties, etc.
Taxation in India : Major State Taxes
State Goods & Services Tax (SGST)
SGST refers to the tax levied by the state government on the intrastate transaction of goods and services payable to the state.
Stamp Duty & Registration
Stamp duty is a tax imposed on the sale of property/property ownership by the state government, payable under Section 3 of the Indian Stamp Act, 1899. The duration of the stamp duty at the time of registration shall be based on the value of the house/property and the state or area where the property is located, and whether it is a new or old house.
DOWNLOAD THE OLIVEBOARD APP FOR ON-THE-GO EXAM PREPARATION
- Video Lessons, Textual Lessons & Notes
- Topic Tests covering all topics with detailed solutions
- Sectional Tests for QA, DI, EL, LR
- All India Mock Tests for performance analysis and all India percentile
- General Knowledge (GK) Tests
Free videos, free mock tests, and free GK tests to evaluate course content before signing up!
Oliveboard Bolt series E-books:
- Oliveboard Bolt – General Awareness
- Bolt – Monthly Current Affairs PDF
- Banking Bolt – Free E-book for Banking Awareness
- Economy Bolt – Free E-book for Economy
Free Static GK E-book – More Study Materials :
- Free Static GK Ebook – Indian Constitution –Parts, Fundamental Rights and Schedules
- Static GK Free Ebook – List of Bharat Ratna Award winners in pdf
I have been creating exam related content for 3 years now. Having appeared for UPSC, SSC, Railway and Banking Exams myself, I understand and create relevant content, important from exams point of view. I am currently creating content for SSC, Railway, J&K and Law entrance exams. During my free time, I love bingewatching shows or read novels.