Taxes are supposed to be paid by every working class individual if they are eligible. There are certain slabs and eligibility criteria that you need to check out to know the basics of taxes in India. If you are wondering what indirect tax is, then you have come to the right place. Read on to find out!
To help build the country’s economy and develop the infrastructure of the country, tax is imposed upon working-class individuals and corporations by the State and the Central Government. It is also important to pay taxes to help the government do a better job of building the country’s financial state by meeting a lot of different public expenses.
A country needs its citizens to pay all the mandatory taxes if they want their country to develop financially, infrastructure wise and in general. If you own a digital marketing firm and need to know what types of taxes are levied, then make sure you read the whole article.
Taxes are generally divided into two broad categories- Direct tax and Indirect tax.
What is a direct tax?
Direct tax is a tax that is levied directly on individuals. A direct tax cannot be passed on to someone else.
Here are some direct taxes
Corporate taxes- Companies that are incorporated or operate in India are supposed to pay corporate tax to the Indian government.
Income tax- There are different slabs based on criteria that will determine how much income tax you are liable to pay. You can file for income tax return and be eligible for a tax refund or just pay the tax.
Security transaction tax- STT is levied when dealing with securities that are listed on any recognised stock exchange.
What is an indirect tax?
Indirect tax levied by the Indian Government on all goods & services purchased by a person. It can also be shifted from one taxpayer to the other.
GST, which stands for Goods and Services Tax, is an indirect tax that is levied in India. Here are a few more types of indirect taxes-
Custom duty- This tax is paid for the goods that come from outside India. It is paid either by the Indian retailers or the consumers.
Central excise duty- It is payable by manufacturers, who will then shift that tax burden to the wholesalers and retailers.
Service tax- It was imposed on the aggregate or gross amount charged by the recipient or the service provider.
Sales tax- It is paid by retailers who would then shift the burden to the customers by charging them sales tax on goods and services.
What is a Digital Service Tax?
The DST or Digital Service Tax is a tax that ensures that every non-resident but digital companies pay their fair share of tax to the Government of India. 2% of India’s DST is levied on all revenues generated from the digital services offered in India. These digital services include digital content sales, digital platform services, and other data-related services.
Make sure you get in touch with an expert to get in-depth information about the same.
