India has been a convergent country post-independence with a fertile future. It has the best IT & Software professionals contributing to the economy to grow at a swift speed. We at India work together to serve our economy and bring out a bright future for ourselves and for the country.
The tax has always been a couplet concept, It is considered to be a liability for the individuals, organizations, HUF, MSMEs, Startups and asset for the government. Tax is the compulsory underlying contribution to the state and central government which is paid by an individual or an organization in return of utilizing the state or country's resources. It also considered being the major revenue stream of Indian government which is levied by following various norms, forms and deductions.

Let's learn about the Indian Tax Structure: Indian government imposes a tax under two different categories.

1.Direct Tax: Under the direct tax, it is imposed on taxable income earned by individuals and corporate entities, the burden to pay direct tax is on the assessee themselves
.Example:Mr Amit works as a software analyst in Infosys, his taxable income is 3,00,000 and he is liable to pay the income tax under income from salary as per the tax slabs (which will be discussed in detail in upcoming blogs, stay tuned to Finocontrol). Therefore, here Mr Amit is the Assessee & he has to file or contribute the tax by himself.

2.Indirect Tax:Under Indirect taxes, it is imposed on the sale and provision of goods and services respectively and the burden to collect and pay taxes is on the seller instead of assessee directly.
Example:Mr Raman is a businessman and sells electronics items. Mr Amit comes to purchase a 32 inches TV which costs ₹30,000 plus ₹5,400 (indirect tax i.e. GST) which is 18% of the cost for low and mid-range electronics. 18% GST is imposed as per Indian Taxation GST tax slab. Therefore, here Mr Amit (Assessee) does not file the tax to govt. directly, he pays the total amount to Mr Raman i.e. ₹35,400 and Mr Raman accounts and takes all responsibility to deposit the tax. Thus, Burden is shifted from Assessee to the sales entity or corporation.

Key Tax Construction:

Taxes in India are levied by the Central & State governments. Some minor taxes are also levied by the local authorities such as municipality and local government.

Over the past few years, the central and state governments have undertaken various policy reforms and process simplification towards great predictability, fairness and automation. This has consequently lead to India's meteoric rise to the top 100 in the World Bank’s Ease of Doing Business (EoDB) ranking in 2018. The Goods & Services Tax (GST) reform is one such reform to ease the complex multiple indirect tax regime in India.:

Taxability in India has 4 heads of Income:Income from salary, Income from business & profession, Income from House Property, Income from capital gains & Income from other sources.

Major Tax Reform in India

GST is one of the biggest indirect tax reforms in the Country.

GST is a comprehensive indirect tax levied on manufacture, sale and consumption of goods as well as services at the national level. It has replaced all indirect taxes levied on goods and services by the Central and State Governments.

GST regime was implemented from 1st July 2017, and India has adopted the dual GST model in which both the Centre and States levy taxes:

SGST: Collected by the state government

CGST & IGST: collected by the central government

*GST: Goods and service tax   

SGST: State goods and service tax    

CGST: Central goods and service tax     

IGST: Integrated Goods and service Major Central Taxes:

1.Income Tax

2.Central Goods & Services Tax (CGST)

3.Customs Duty

4.Integrated Goods & Services Tax (IGST)

5.Major State Taxes

6.State Goods & Services Tax (SGST)

7.Stamp Duty & Registration

India is a country with lucrative tax incentives for the following domains:

Export promotion

Research & development

Investment-linked

Startup India scheme

International financial services centre

Therefore, any individual or corporate entity involved in these economic activities get a huge tax benefit, refund and deductions. (we will discuss the individual incentive in detail in coming tax blogs)

Major tax STAKEHOLDERS in India

Central Board of Indirect Taxes and Customs

Department of Revenue, Ministry of Finance

Income Tax Department

:Therefore, Tax in India has been an emerging industry and career for professionals. It requires an in-depth knowledge of Indian tax & compliance and experience to return income tax and make corporate tax consultancy.

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