As they say, nothing is certain but death and taxes. Since we’d like to focus on the more cheerful of those two options, let’s talk about taxes.

Taxes come in many avatars – Income tax, Corporate tax,Goods & Services tax and so on. There are so many types of taxes that an average Indian pays that often you pay a tax without even knowing that you’re paying it!

Wouldn’t you like to know exactly what taxes we end up paying in our day to day lives, both knowingly and unknowingly? So here goes!

Direct and Indirect Taxes

The most fundamental classification of taxes is based on who collects the taxes from the tax payer.

Direct Taxes, as the name suggests, are taxes that are directly paid to the government by the taxpayer. It is a tax applied on individuals and organizations directly by the government e.g. Income tax, TDS,Corporation tax, Wealth tax etc.

Indirect Taxes are applied on the manufacture or sale of goods and services. These are initially paid to the government by an intermediary, who then adds the amount of the tax paid to the value of the goods / services and passes on the total amount to the end user.

Examples of these are GST, excise duty etc

Important Direct and Indirect Taxes

Direct Taxes

1. Income Tax

Income Tax is paid by an individual based on his/her taxable income in a given financial year. Under the Income Tax Act, the term ‘individual’ also includes Hindu Undivided Families (HUFs), Co-operative Societies, Trusts and any artificial judicial person. Taxable income refers to total income minus applicable deductions and exemptions.

Tax is payable if the taxable is above the minimum taxable limit and is paid as per the differing rates announced for each tax slab for the financial year.

1. Corporation Tax

Corporation Tax is paid by Companies and Businesses operating in India on the income earned worldwide in a given financial year. The rates of taxation vary based on whether the company is incorporated in India or abroad.

1. Wealth Tax

Wealth tax is applicable on individuals, HUFs or companies on the value of their assets in a given financial year on the date of valuation. It is taxed at the rate of 1% of the net wealth of any assesse exceeding Rs 30,00,000.

‘Net wealth’ here includes, unproductive assets like cash in hand above Rs 50,000, second residential property not rented out, cars, gold jewellery or bullion, boats, yachts, aircrafts or urban land. It does not include productive assets like commercial property, stocks, bonds, fixed deposits, mutual funds etc.

1. Capital Gains Tax

The profits made on sale of property are taxable under Capital Gains Tax. Property here includes stocks, bonds, residential property, precious metals etc. It is taxed at two different rates based on how long the property was owned by the taxpayer – Short Term Capital Gains Tax and Long Term Capital Gains Tax. This deciding period of ownership varies greatly for different classes of property.

Indirect Taxes

1. GST

GST is charged on the sale of movable goods. It is collected by the Central Government in case of inter-state sales (Central Sales Tax or CST) and by the State Government for intra-state sales . The rates of taxation vary depending on the product and sevices type.

We at DSMCSL handle all functions of Direct and Indirect Taxations, which includes applying of PAN and registeration in GST and end to end solutions from filing of Monthly, Quarterly returns.filing of all ITR’s of Individuals,Firms & Companies.

Also all cases including raids & Seizures,scrutiny cases,filing appeals at CIT Appeals and Tribunal levels and High Court and Supereme Court.