Taxes in India !!

dipen01

Skilled
Guys,

Someone pls help me find a link which explains (briefly) the types of Taxes in India.

I am from a non commerce background so haven't encountered much about taxes and now been bombarded with several terms like GST/Excise/Sales/VAT/Interstate/Octroi/Service Tax etc.

Now firstly I googled, but answers are quite fragmented and where I found some explanation, its kinda difficult to understand.. Also they don't include all the major taxes.

So looking for something which outlines all the common taxes and explains it in layman's terms. Any pointers ? :)

Thanks
 
Don't know about India :ashamed: but in Maharashtra there are TOTAL 30 types of taxes HIGHEST than ANY INDIAN STATE :mad: (from CA's mouth)
 
Emperor said:
Don't know about India :ashamed: but in Maharashtra there is TOTAL 30 types of taxes HIGHEST than ANY INDIAN STATE :mad: (from CA's mouth)
Can you list those 30 taxes and does the common man really pay all of them??
 
Dipen check caclubindia site for details

By the way if you want to understand what it means i guess investopedia definition of all that will help.

Since u dont know the difference between terms like octroi and GST.So i guess basic definition would help.

ALbert einstein himself said "The hardest thing in the world to understand is the income tax."

Hope u got the point
 
MAGNeT said:
ALbert einstein himself said "The hardest thing in the world to understand is the income tax."

Hmm, not so sure about that :)

Just what Einstein reportedly said about compound interest varies quite a bit from source to source: That it was "the greatest invention in human history" (or "the greatest invention of mankind," or "the greatest invention of all," or "the most significant invention of the nineteenth century"), that it is "the most powerful force in the universe," or that it is "more complicated than the theory of relativity."

(That last variation echoes another sentiment popularly attributed to Einstein which also began to appear only well after his death, to the effect that "preparing a tax return is more complicated than relativity theory" or "the hardest thing in the world to understand is the income tax.")

We suspect that this perspective on the power of compound interest is a fairly modern invention, one which has been retroactively placed into the mouth of a prominent dead person to give it more punch.
 
Compound interest well i was just read an article about same from rakesh jhunwala and than was diverted tosome other article about same in stocks

It was about putting 10k in wipro in 1981 and after compounding present market value of same would turn out to be be 432 crore.So if my family had put 100 buks and had forgotten same than that would have value 4.3 crore right now

U get great returns if u leave to compound atleast for 25 years.
 
MAGNeT said:
Compound interest well i was just read an article about same from rakesh jhunwala and than was diverted tosome other article about same in stocks

It was about putting 10k in wipro in 1981 and after compounding present market value of same would turn out to be be 432 crore.So if my family had put 100 buks and had forgotten same than that would have value 4.3 crore right now

U get great returns if u leave to compound atleast for 25 years.

Im not sure if you can compare compounding interest with wipro.

You get crores in wipro because the 10k you invested, lets say you get 100 shares, those 100 shares over the years get split and bonus shares are added that is the reason why 25 years later you become a crorepati. If I am not mistaken compounding interest is related to the money you put in a bank account and then the interest also starts earning interest.
 
The taxes structure can roughly be divided into

Indirect Taxes (these taxes are collected by manufacturer, saler, dealer, retailer and then deposited with the government)

Direct Taxes. (these taxes are collected by government directly from the end person)

Indirect Taxes are Excise Duty (Levied by central government on manufacturing units which passes on to end customer), Customs duty (as raw material is imported it will attract the customs duty which will ultimately be passed on to end user), MAT (minimum alternate tax), Ad velorum Tax, CST (central sales tax), SST (state sales tax replace first "S" with your states initial), may be a few more.

Direct taxes are Income Tax, Wealth Tax, Service Tax, Octroi.

But the main problem in India is taxation on tax, which magnifies the ultimate end price of the product.
eg :
Suppose a car is priced at 100000 by the manufacturer (It includes cost, margin profit, dealer commission in addition to customs duty on raw material)
add to it 24% excise so price escalates to 124000
now add CST at 4% (ideal it should be on 100000 but its on 124000) add 4960 = cost goes to 128960
Now add transportation 1% roughly 1290 so cost goes up to 130250
Add service tax on transportation charge roughly 132 cost goes up 130382
Now the car is at dealers place he sells it it will attract Octroi and state sales tax 4% each look at the calculation below
130382 plus 4% octroi = 135598
135598 plus 4% SST = 141022
now add RTO tax on 141022 appx 2500 so cost up 143522
add insurance 3000 146522 now add service tax on insurance 146825

now see the multiplication of taxes from 100000 to 146825.

so we end up paying nearly 47% tax on car may be more at some place and less at some. Same thing happens with Petrol and Diesel Prices.

PS: Disclaimer : none of the taxes mentioned are accurate its just example calculation purpose only.
 
Hacker said:
Can you list those 30 taxes and does the common man really pay all of them??
Do you think that the common man are not paying anything?? Each & every service/product you buy from anyone is included with those taxes, yes if you are buying without legit Bill than ....
 
Hacker said:
Im not sure if you can compare compounding interest with wipro.

You get crores in wipro because the 10k you invested, lets say you get 100 shares, those 100 shares over the years get split and bonus shares are added that is the reason why 25 years later you become a crorepati. If I am not mistaken compounding interest is related to the money you put in a bank account and then the interest also starts earning interest.
My point was related to 100 bucks rather than 10k as 10k in 1981 was equivalent to 2-5 lakh rupees when compared.100 bucks you can compare it with 10-25k in present term

Regarding banking it much related as we see compound interest but hardly anyone keep stocks with that much horizon.

But it can be applied there too.

Buffet and jhunjhunwala uses same philosophy in stocks.
 
Emperor said:
Do you think that the common man are not paying anything?? Each & every service/product you buy from anyone is included with those taxes, yes if you are buying without legit Bill than ....

So you cannot name those 30 different taxes then ?

If you're a guy making less than 1lakh 60 annual or a woman at 1.90 then you pay no income tax.

Income tax is the biggest tax for everybody, on the books of course.

Then there is another creature called capital gains, its a real cracker :)
 
dipen01 said:
Guys,

Someone pls help me find a link which explains (briefly) the types of Taxes in India.

I am from a non commerce background so haven't encountered much about taxes and now been bombarded with several terms like GST/Excise/Sales/VAT/Interstate/Octroi/Service Tax etc.

Now firstly I googled, but answers are quite fragmented and where I found some explanation, its kinda difficult to understand.. Also they don't include all the major taxes.

So looking for something which outlines all the common taxes and explains it in layman's terms. Any pointers ? :)

Thanks

Dude whts ur reason to learn about taxes? Is it for academic purposes or for business purposes? The reason I ask is that if its for academic purposes, there are various academic books available which will give you an introduction to the Indian Tax System. Start with the basic Taxation book for First Year college students. It'll have all the definitions and explanations that you need.

If its for business purpose, you're better off consulting a CA and try and find out only about the taxes that concern you and how to work with or around them.

IMO, there is no point in wasting your time trying to learn the entire tax system. The way our country is structured, no one can give you a wholesome view of the tax system for the ENTIRE country. Every freakin state has its own laws and taxes and they are in complete disagreement with the laws & taxes of the states they do maximum business with. Go Figure!!! JAI HIND!!!
 
agupta02 said:
Dude whts ur reason to learn about taxes? Is it for academic purposes or for business purposes? The reason I ask is that if its for academic purposes, there are various academic books available which will give you an introduction to the Indian Tax System. Start with the basic Taxation book for First Year college students. It'll have all the definitions and explanations that you need.

If its for business purpose, you're better off consulting a CA and try and find out only about the taxes that concern you and how to work with or around them.

IMO, there is no point in wasting your time trying to learn the entire tax system. The way our country is structured, no one can give you a wholesome view of the tax system for the ENTIRE country. Every freakin state has its own laws and taxes and they are in complete disagreement with the laws & taxes of the states they do maximum business with. Go Figure!!! JAI HIND!!!
Well I don't have a direct reason to learn... I am learning few subjects related to Operations.. And so types of taxes that mentioned came into discussion quite often so I took it upon myself to get to know about others :p.. Seems like its just too messy.. ;)

@doc and others :- Thanks..been going through all your posts.. :)
 
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