
Taxes are a fundamental part of a strong economy, and based on the population and the type of economic principle that is being practiced in a nation, the rates are determined. For example, in nations like some of the EU countries, the tax rates are high, and for that, the people get services like free education for their children and healthcare.
On the other side of the spectrum, we find the oil-rich nations that provide tax benefits to the residents and businesses. For the government, taxation is a way through which the entity earns revenue and uses it for public welfare.
For a resident of India, it’s important to know the tax slabs and how much a person needs to pay when it comes to income tax and other forms of direct and indirect taxation.
Types of Taxes Applied in India
Different types of taxes are there for each Indian to consider, and based on that, one must plan how they can meet the compliance guidelines of the taxes. A person who is taking a loan from a DSA partner app also needs to pay indirect taxes to the government.
Direct Taxes
The direct tax is a proponent that gets taxed when a person makes an income and for that, one needs to follow through the compliance.
- Tax on Income
The first direct tax is the tax that comes from income, and for that, one needs to keep the annual earnings and check under which slab they are falling. Based on that one needs to pay that amount as taxes during the tax season.
Income tax is also calculated for those individuals who are making income through freelancing, and for them, it’s important to report the income and pay the tax rate depending on the slab it’s falling.
- Tax on Capital Gains
When it comes to capital gains, then a person also falls under the direct taxation of capital gain tax. Here, the category is broadly divided into two subgroups where one is short time capital gains (STCG) and long term capital gains (LTCG).
Now, for a person who shows the gain within a year, they need to pay 20% of that gain, and through that, they need to make an income out of it. Whereas in the long-term capital gains segment, a person needs to pay 15% as a tax to the government.
- Corporate Tax on Businesses
Corporations also need to pay taxes on their profits in India. For domestic companies, the corporate tax is about 25%, and for international brands or companies, one needs to pay 35% as taxes.
Indirect Taxes
There are a host of international taxes in the country, and for that, one needs to take into consideration taxes that are recently introduced or reformed.
- The Role of Goods and Services Tax
GST is one of the recent phenomena where one needs to pay taxes on every purchase, and for that, it might look like the price of all the products is are little inflated. GST has slabs, and certain products fall under each slab, depending on the requirement of the product, and then the item gets categorized.
Benefits of Taxes for a Citizen of India
There are certain benefits of taxes when it comes to a country like India. Many people in this country are still below the poverty level, and for them public welfare scheme is necessary as it allows the government to provide basic amenities to this section of the population.
Providing public services like building quality infrastructure, roads, and hospitals are all essential for the benefit of the citizens.
Drawbacks of High Tax Brackets
However, there are certain drawbacks, and for that one needs to take into consideration that the people who are paying taxes must receive the same service from the government. Another issue is that people, when taking any financial products like loans or making an investment, also need to pay taxes.
A DSA Partner can guide an individual here to get the best deal from the market without bearing the burden of high taxation. A DSA’s full form is Direct Selling Agents, and through them, one can make the possible changes in the market.
These are some of the core issues with high taxation, and through that one can make an impact in the country, and the state also can use the fund for the welfare of the people.
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