The taxation system in India has a three-tier federal structure with taxes levied by the central government, state governments, and local authorities. There are two main types of taxes - direct and indirect. Direct taxes include income tax, corporate tax, and capital gains tax, which are imposed on individuals and corporations. Indirect taxes include GST, customs duty, and stamp duty, which are levied on goods and services and can be passed on to other parties. The GST implemented in 2017 replaced many indirect taxes and is a comprehensive, multi-stage, destination-based tax applied across India.

1. TAXATION
SYSTEM IN
INDIA
Presentation by:
Kunal Kumar
Roll : 22
PGDM 2ND SEM

2.  Taxes are important and largest source of income for
government.
 The Indian tax system is well structured and has a
three-tire federal structure.
 The taxation system in India is such that the taxes are
levied by central government and states governments.
Some minor taxes are also levied by municipalities and
local authorities.
 Taxation in India:

3. Tax
Direct Indirect
 Types of taxes in Indian taxation system:

4.  Direct taxes:
 Direct taxes are imposed on corporate entities and
individuals. These taxes cannot be transferred to
others.
 Important direct taxes in our country are income tax,
corporate tax, capital gain tax.

5.  Income tax:
 For individual taxpayers like us, the most important
type of Direct tax is the income tax. This tax is levied
during each assessment year (1st April to 31st March).
 As per the Income Tax Act, 1961, it is mandatory for
you to make income tax payments according to your
tax slab if your annual income is above the minimum
exemption limit.

6.  What is Tax slab?
 Individuals in India, earn an income in a diverse range.
Therefore, it is important to levy tax based on income.
 The Income Tax Act segregates the income range and
charges different rates as per the segregation.
 Your tax slab can vary not only based on your income
but also your age. Every year during the Central
Government’s Budget Session, amendments are made
in the income-tax slabs.

7.  Capital Gains Tax:
 Any profit or gain that arises from the sale of a capital asset is
a capital gain.
 Capital gains income is specifically covered under the
definition of income, and hence you will need to pay capital
gains tax in the year in which the transfer of the capital asset
takes place.
 Capital gains tax can be tax on short-term capital gain or
long-term capital gain.
 Capital gains are not applicable to an inherited property as
there is no sale, only a transfer of ownership.
 The Income Tax Act has specifically exempted assets
received as gifts by way of an inheritance or will.
 However, if the person who inherited the asset decides to sell
it, capital gains tax will be applicable.

8.  Corporate tax:
 Corporate tax is applicable on those entities which
have a separate legal entity from its founders and have
been formed under the Companies Act, 2013 or any
previous Companies Act.
 Currently the companies with turnover up to ₹ 250
cores have to pay corporate tax @ 25%. Whereas, the
companies with a turnover above ₹ 250 cores have to
pay corporate tax @ 30%.
 The corporate tax rate for foreign companies depends
upon the tax agreement between India and the origin
country of the concerned company.

9.  What is Indirect Tax?
 It is a tax levied by the Government on goods and
services and not on the income, profit or revenue of an
individual.
 It can be shifted from one taxpayer to another.
 Important indirect taxes: Customs Duty, Stamp Duty,
Securities Transaction Tax, Goods and service tax(GST).

10.  Customs Duty in India:
 Customs Duty is a type of Indirect Tax which is levied
on goods which are imported into India. In some cases,
it is also levied when the goods are exported from
India.
 In India, the basic law for levy and collection of customs
duty is Customs Act, 1962 .
 It provides for levy and collection of duty on imports
and exports, import/export procedures, prohibitions on
importation and exportation of goods, penalties,
offences, etc.

11.  Stamp Duty:
 Stamp Duty is an indirect tax levied by the State Govt’s
on the transfer of immovable property located in their
state.
 It is also levied by the Govt. on all Legal Documents.
 The Stamp Duty Rates vary from State to State.

12.  Securities Transaction Tax (STT):
 Securities Transaction Tax or STT is a type of Indirect
Tax which is levied at the time of sale/purchase of
securities through the Indian Stock Exchanges. These
securities include Shares, Mutual Funds, F&O
Transactions etc.
 Securities Transaction Tax was introduced in India by
the 2004 Budget and is applicable with effect from 1st
April 2004.
 The reason for the introduction of Securities
Transaction Tax was to lower the tax on short term
capital gains and to make the long term capital gains
exempted from the levy of any tax.

13.  Goods and Services Tax (GST):
 Goods and Services Tax (GST) is an indirect tax (or
consumption tax) used in India on the supply of goods
and services.
 The tax came into effect from 1 July 2017 through the
implementation of the 101st Amendment of the
Constitution of India by the Indian government. The
GST replaced existing multiple taxes levied by the
central and state governments.

14.  Features of GST:
 It is a comprehensive, multistage, destination-based tax:
 Comprehensive because it has subsumed almost all the indirect taxes
except a few state taxes.
 Multi-staged as it is imposed at every step in the production process, but
is meant to be refunded to all parties in the various stages of production
other than the final consumer.
 As a destination-based tax, it is collected from point of consumption and
not point of origin like previous taxes.
 Goods and services are divided into five different tax slabs for collection
of tax: 0%, 5%, 12%, 18% and 28%.
 However, petroleum products, alcoholic drinks, and electricity are not
taxed under GST and instead are taxed separately by the individual state
governments, as per the previous tax system.
 There is a special rate of 0.25% on rough precious and semi-precious
stones and 3% on gold.
 In addition a cess of 22% or other rates on top of 28% GST applies on
few items like aerated drinks, luxury cars and tobacco products.

15.  What are the components of GST?
 There are three taxes applicable under this
system: CGST, SGST & IGST.
 CGST: It is the tax collected by the Central
Government on an intra-state sale (e.g., a
transaction happening within Maharashtra)
 SGST: It is the tax collected by the state
government on an intra-state sale (e.g., a
transaction happening within Maharashtra)
 IGST: It is a tax collected by the Central
Government for an inter-state sale (e.g.,
Maharashtra to Tamil Nadu)

16. References:
www.wikipidia.com
www.cleartax.in
www.chateredclub.com
www.investopedia.com
www.investindia.com

17. THANK
YOU