Mumbai, Delhi see tepid direct tax collection growth

Direct Tax

Direct tax collections till Sept grew 8.95% to Rs 3.27 lakh cr: Finance Ministry

Direct tax mop-up rises 15% to Rs 1.89 lakh cr in April-August

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	As the name suggests, direct taxes are those that are levied directly on taxpayers &mdash; the income-tax, wealth tax, corporation tax, etc. In other words, it is a type of tax where the impact and the incidence fall under the same category.</div>
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	Direct taxes in India are overseen by the Central Board of Direct Taxes (CBDT). It was formed as a result of Central Board of Revenue Act, 1924.</div>
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	<strong>Some examples of direct tax:</strong></div>
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	<strong>Income tax</strong>: Income tax is paid by an individual based on his/her taxable income in a given financial year. Taxable income refers to total income minus applicable deductions and exemptions.<br />
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	The Budget estimate of the government&#39;s income tax revenue for the year 2020-21 was Rs 6,25,000 crore. The revised estimates of income tax for the 2019-20 Budget came at Rs 5,47,000 crore, while the actuals for the 2018-19 Budget stood at Rs 4,61,487 crore.</div>
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	<strong>Corporation tax: </strong>Corporation Tax is the money paid by companies and businesses on the income earned by them in a given financial year.</div>
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	On September 2019, the central government announced a cut in the rate of corporation tax for domestic companies to 22 per cent from 30 per cent previously. This brought effective corporation tax rate, including all additional levies, to about 25.2 per cent, for companies that do not receive any incentives or exemptions.<br />
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	The Budget estimate of the government&#39;s corporation tax revenue for the year 2020-21 was Rs 6,81,000 crore. The revised estimates of corporation tax for the 2019-20 Budget came at Rs 6,10,500 crore, while the actuals for the 2018-19 Budget stood at Rs 6,63,571 crore.<br />
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	<strong>Read provisions relating to direct taxes<br />
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	<a href="https://bsmedia.business-standard.com/_media/bs/data/general-file-upload/2020-02/memo.pdf" target="_blank">Provisions relating to direct taxes in Budget 2020-2021</a></strong><br />
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Learn what is Direct Tax, Direct Tax Definition, Direct Tax News and more here at Business Standard.

What is Direct Tax, Direct Tax Definition, Direct Tax News

What is Direct Tax

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	Income tax is a direct tax that a government levies on the income of its citizens. The Income Tax Act, 1961, mandates that the central government collect this tax. The government can change the income slabs and tax rates every year in its Union Budget.&nbsp;</div>
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	Income does not only mean money earned in the form of salary. It also includes income from house property, profits from business, gains from profession (such as bonus), capital gains income, and &#39;income from other sources&#39;. The government also often provides certain leeway such that various deductions are made from an individual&#39;s income before the tax to be levied is calculated.&nbsp;</div>
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	<strong>Income Tax Returns</strong></div>
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	Income Tax Returns (ITR) form are the basis of calculating a person&#39;s income tax. It is a statement showing the status of a person, all their sources of revenue, deductions and, lastly, the tax payable or tax refund, if any.&nbsp;</div>
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	<strong>Income Tax slabs</strong></div>
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	What income tax rate a person pays depends on the slab they fall in. The government has categorised incomes into slabs like &mdash; up to Rs 250,000, Rs 250,000-Rs 5,00,000, Rs 5,00,000-Rs 1 million, and more than Rs 1 million. The rates on different slabs might be different based on age groups.</div>
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	<strong>Standard deduction</strong></div>
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	Tax on some components of income can be waived by the government. These tax reliefs are known as standard deductions.</div>

Learn what is Income Tax, Income Tax Definition, Income Tax Planning, Income Tax Returns, Income Tax Slabs, Income Tax deduction and more Income Tax news at Business Standard.

What is Income Tax, Income Tax Planning, IT Returns, Income Tax Slabs

Income tax

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	Corporation tax is a direct tax imposed on the net income or profit that enterprises make from their businesses. Companies, both public and privately registered in India under the Companies Act 1956, are liable to pay corporation tax. This tax is levied at a specific rate according to the provisions of the Income Tax Act, 1961.</div>
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	In a major move, Finance Minister Nirmala Sitharaman in September 2019 announced sharp cuts in the corporation tax among a series of announcements. The government decided to slash domestic corporate tax to an effective 25.17 per cent, inclusive of all surcharges and cess, in a bid to promote growth and investments amid an economic slowdown. The move would cost the exchequer Rs 1.45 trillion.</div>
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	The government proposed to reduce the corporate tax rate from the existing 30-25 per cent (depending on the turnover thresholds) to 22 per cent (effective rate 25.17 per cent, including surcharge and cess) for all the domestic companies, subject to them not availing of a specified list of exemptions. These include, among others, exemptions available to units in special economic zones, deductions for certain scientific research expenditure, additional depreciation available on fresh investments and the losses, if any, attributable to such deductions.</div>
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	The minimum alternate tax (MAT), introduced to facilitate the taxation of zero-tax companies, will also not be applicable to companies availing of the reduced rate of taxation.</div>
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	Companies claiming exemptions could continue to avail of them and pay taxes at pre-amended rates, that is, 25-30 per cent. They might opt to pay taxes at lower rates at a future date. However, the option to pay taxes at the reduced rate of 22 per cent, once selected could not be changed. Significantly, where the companies continue to avail of exemptions, the MAT rate has been reduced from 18.5 per cent to 15 per cent.</div>
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	Any new domestic manufacturing company, incorporated on or after October 1, 2019, is to be allowed to pay corporation tax at the rate of 15% (effective rate 17.01%). No MAT is to be imposed on these companies either.</div>
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	Enhanced surcharge will not apply to capital gains on sale of any securities, including derivatives, in the hands of Foreign Portfolio Investors (FPIs).</div>
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	The finance minister also announced an expansion in the scope of corporate-social responsibility (CSR) activities. The companies can now spend 2% of the money on state or Union govt incubators, PSUs, state universities, IITs, public-funded entities.</div>

What is Corporate Tax: Get latest news on Corporation Tax, corporate tax rate, corporate tax cuts, corporate tax in India, corporate income tax on Business Standard.

What is Corporate Tax, What is Corporation Tax, Corporation Tax News

Corporation Tax

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	An indirect tax is one that is not paid directly by a person to the government but collected by an intermediary and passed on to the government. Indirect taxes are imposed on goods and services on the basis of production, supply, sale or purchase of products or provision of services, in the form of goods and services tax (GST).</div>
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	GST, rolled out in 2017, replaced various indirect tax laws that previously existed in India, such as import and export duty, excise, sales tax, value-added tax (VAT), service tax, entertainment tax, electricity duty, tax on passenger fares, freights etc.</div>
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	<strong>How are indirect taxes collected?</strong></div>
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	An indirect tax is collected from the consumer by an intermediary, such as manufacturer, trader or service provider. The intermediary files a tax return and forwards the tax proceeds to the government with the tax return. The consumer bears the final economic burden of the tax by paying more for the product.</div>
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	By comparison, direct taxes are imposed on persons and collected by the government directly from those on whom they are imposed.</div>
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	In indirect taxation, the obligation of tax payment varies from one consumer to another, as these taxes are levied by the government on goods and services &mdash; not on the income, profit or revenue of an individual. These taxes can be shifted from one taxpayer to another. This is unlike direct taxes, which are borne by the person on whom the tax is levied.</div>
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	<strong>What is GST?</strong></div>
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	GST was rolled out on July 1, 2017, as India&rsquo;s most comprehensive indirect tax reform. It consolidated multiple indirect tax that existed previously into a single one. The implementation of GST aimed to make the indirect tax system more unified across the many states of the country. Read more... (https://www.business-standard.com/about/what-is-goods-and-services-tax)&nbsp;</div>

Learn what is Indirect tax, Indirect tax Calculation, Definition and more Indirect tax news here at Business Standard.

What is Indirect tax, Indirect tax News, Budget 2020 News, Indirect tax Calculation

Indirect Tax

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	Taxation is the primary source of income for the government. The most important revenue receipts for the government, taxes are involuntary fees levied on individuals and corporations to finance government activities. Revenue receipts can be of two types &mdash; non-tax revenue and tax revenue. Tax revenue is the income gained by the government through taxation.</div>
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	Tax revenue forms a part of the Receipt Budget, which in turn is part of the Annual Financial Statement of the Union Budget.</div>
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	Tax revenue is the result of the application of a tax rate to a tax base. Total tax revenue as a percentage of GDP indicates the share of the country&#39;s output collected by the government through taxes. Tax revenue can be regarded as one measure of the degree to which the government controls the economy&#39;s resources.</div>
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	Taxes collected from both direct tax and indirect tax are the government&rsquo;s tax revenue. It includes collections from income tax, corporation tax, customs, wealth tax, tax on land revenue, etc.</div>
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	Direct tax is the tax that is paid directly to the government by the person or company on whom it is levied. Income tax, wealth tax, corporation tax and property tax are some examples of direct tax. Indirect taxes are those that are collected by intermediaries from individuals and corporations who bear the burden of the tax and passed on to the government. Goods and Services Tax (GST) is an example of indirect tax. Corporation tax forms a large chunk of the government&rsquo;s tax revenue.</div>
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Learn what is Tax revenue, Tax revenue Definition, Tax revenue News and more here at Business Standard.

Page 8 - Latest Updates on Direct Tax

Mumbai, Delhi see tepid direct tax collection growth

Direct tax collections till Sept grew 8.95% to Rs 3.27 lakh cr: Finance Ministry

Direct tax mop-up rises 15% to Rs 1.89 lakh crore in April-August

Direct tax mop up at 5.54 lakh cr, indirect at Rs 5.69 lakh cr: Govt