Types of Tax Laws in India

Types of Tax Laws in India

Tax law

Indian tax law includes many different taxes levied by different governments. Income tax is levied by the Central Government under the Income Tax Act 1961. Customs and excise duty are also levied by the central government. Sales tax is levied under the VAT law at the state level.

The right to levy a tax is derived from the Constitution of India which allocates the power to levy various taxes between the center and the state. An important restriction on this power is Article 265 of the Constitution which states that "no tax shall be levied or collected except under the authority of law." [29] Therefore, every tax or money collected must be supported by law. Passed by Parliament or State Legislature. In 2010–11, direct tax and indirect tax amounted to gross tax collections (7.92 billion (long scale)), with contributions of 56% and 44% respectively. [30]

Central Board of Direct Taxes
The Central Board of Direct Taxes (CBDT) is a part of the Department of Revenue in the Ministry of Finance, Government of India. [31] CBDT provides the necessary inputs for direct taxes policy and planning in India and is also responsible for administration of direct tax laws through the Income Tax Department. CBDT is a statutory authority under the Central Revenue Act, 1963. It is the official FATF unit of India. The top department of the department charged with administration of taxes as the Central Board of Revenue came into existence as a result of the Central Revenue Act, 1924. Initially the board was in charge of both direct and indirect taxes. However, when the administration of taxes was too low to handle a single board, the board was divided into two parts, namely the Central Board of Direct Taxes from 1 January 1964 and the Board of Excise and Customs. It was brought about by dichotomy. Formation of two boards U / S 3 of the Central Boards of Revenue Act, 1963.

Income Tax Act of 1961
The Chief Tax Act 1961 is an Income Tax Act passed by Parliament, which establishes and regulates the taxation of income of individuals and corporations. [32] This Act levies income tax under the following five heads: [33]

Income from home and property,
Income from business and profession,
Income from salary,
Income in the form of capital gains, and
Income from other sources
However, the Act may soon be repealed and a new Act may be enacted consolidating the law relating to Income Tax and Wealth Tax, the new proposed law to be the Direct Taxes Code (Direct Taxes Code, Act 2010). It is said. The Act was referred to the Parliamentary Standing Committee which has submitted its recommendations. The Act is expected to be implemented with a change from the financial year 2013-14. [34]

goods and services Tax
The Goods and Services Tax (India) is a comprehensive indirect tax on the manufacture, sale and consumption of goods and services across India to replace the taxes levied by the central and state governments. It was introduced as the Constitution (One Hundred and First Amendment) Act 2016 after the passage of the Constitution's 101st Amendment Bill. The GST is governed by the GST Council and headed by the Union Finance Minister of India - Nirmala Sitharaman (working finance minister).

This method allows GST-registered businesses to claim tax credits on the value of GST paid on the purchase of goods or services as part of their commercial commercial activity. Administrative responsibility will generally rest with a single right to tax goods and services. Exports will be treated as zero-rated supplies and imports will be levied on par with domestic goods and services, which follow the destination principle in addition to customs duties which will not be included in the GST.

The Goods and Services Tax (GST) is an important step in the reform of indirect taxation in India. Cascading or double taxation can be reduced by consolidating many central and state taxes into a single tax, which would facilitate a common national market. The simplicity of tax should lead to easy administration and enforcement. From the consumer point of view, the biggest benefit would be in terms of reduction in the total tax burden on goods, which is currently estimated at 25% -30%, free movement of goods from one state to another without a freeze on state borders, state tax or For payment of entry tax and reduction in paperwork to a large extent.

GST is applicable from 1 July 2017.