Tag: government and taxes

Indirect tax is a type that is paid to government indirectly  i.e tax on goods and services rather than on income and profits. Examples of indirect tax include VAT, excise duty, service tax, customs duty etc. Point of impact and incidence is different for example we buy a commodity from shopkeeper(point of impact) and tax levied goes to government ( point of incidence).

Central government has exclusive power to impose tax which is not mentioned in state or concurrent list.

The tax levied on the interstate trade of goods is the central sales tax.

Wealth tax is collected from unproductive assets only. Estate duty was abolished in 1985.

The tax on net income of companies is corporate. Tax rates are uniform for categories of companies.

Interest tax was withdrawn in 2000-01, estate duty abolished in 1985 and gift tax in 1998-99.

Sales tax is the tax on sale of goods and is influenced by the value added tax system.

Wealth tax is an example of direct tax since the burden of tax cannot be transferred to different person. Wealth tax refers to the tax levied on personal capital.

Ad valorem is a Latin term meaning 'according to value'. An ad valorem tax is a tax whose amount is based on the value of a transaction or of property.