Indian Taxation System -The most complicated system filled with corruption

Indian Taxation system is structured in such way that even beggars are paying tax indirectly. The 'great' tax planners are not happy with the existing tax system and doing more research to add more tax varieties. The system is so complicated and strict that an accountant dealing in all these taxes will become diabetic patient before the age of 40 due to pressure of handling the complexity.

Private organizations are considering accountant as a liability and they don't give any value to service of normal accountant in comparison to other departments like sales or production. There is a well developed corruption structure exists in India were government employees are charging fixed rate of bribe for every service. People are hesitating to approach any authorities either because of corruption is there also or their future may be tied in long legal process. Another reason is that if they chose to file complaint, their work will be hanged for ever. So, definitely people may consider giving bribe to get the work done. After getting bribe, government employees are the most sincere people discharging their duty.

Major portion of tax amount is being spent for maintaining government structure and its employees. Development is in papers to show at the time of elections. In India taxpaying start at birth and end at death.  Life of normal citizen starts with dreaming a prosperous life and that dream travel with him till death and will never fulfill. Some of the tax varieties in India are:
 
Income Tax
Wealth Tax
Gift Tax
Service Tax
Sales Tax
Central Sales Tax
Value Added Tax
Securities Transaction Tax
Customs Duty
Excise Duty
Municipal/Local Taxes
Toll Taxes
Parking Charges
Entertainment Tax


Other State Taxes
a. Stamp duty on the transfer of assets
b. Property/building tax that is levied by local bodies
c. Agriculture income tax levied by the State Governments on the income from plantations
d. Luxury tax that is levied by certain State Government on specified goods
Income Tax
This is a form of direct tax which Individuals, Societies, charitable trusts, whose taxable income exceeding Rs. 2,00,000/- are liable to pay Income tax as per the slabs.
 
The following are liable to pay Income tax irrespective of the income
All Partnership firms
Co-operative Societies
Companies
Local authorities
Association of Persons/ Body of Individuals where shares of the members are indeterminate or unknown irrespective of income.

Wealth Tax
All those assesses who are holding assets included in taxable wealth are liable to pay Wealth Tax.
(i) Individuals and HUFs having net wealth exceeding Rs. 30 lacs on the Valuation date
(ii) All Companies having net wealth exceeding Rs. 30 Lacs

Wealth Tax Liability - 1% of Net Wealth Less Rs. 30 lacs
 
Gift Tax
Gift tax is chargeable on the gifts received in cheque/cash by an individual, HUF without any consideration, exceeding Rs. 50,000/- in a financial year (Section 56(2)(vi).
 
Transactions on or after 1.10.2009 without consideration or in adequate consideration are also will be taxed.


Service Tax
This is a form of indirect tax imposed on specified services called "taxable services". This tax cannot be levied on any service which is not included in the list of services.
 
Payment of Service Tax
Every person, who is the provider of taxable service, is liable to pay service tax. In case of any person who is use service of non-resident service provider then the user of service is liable to pay service tax instead of service provider.

Sales Tax
Central Sales Tax
Central Sales tax is generally payable on the sale of all goods by a dealer in the course of inter-state Trade or commerce or, outside a State or, in the course of import into or, export from India.
 
Value Added Tax
This is a form of consumption tax charged from the buyer at the time of purchase of goods.
 
Securities Transaction Tax
At the time of sale and purchase of securities, securities transaction tax is being levied. The tax rate is different for Future & options, Capital Market Delivery Option and Capital Market Intra-Day option. This tax is levied on all transactions and the loss or profit of the transaction is not considered at all. This is the most shameful tax system where people are paying tax against loss also.
 
Customs Duty
This is the tax levied on import of goods from another country to India. For some items the rate of duty is equal to the cost of the goods.
 
Excise Duty
This is indirect tax collected on goods manufactured in India. Excise duty on petroleum and non-petroleum products is different.
Municipal/Local Taxes
Different Municipalities are charging taxes on properties and many other items to generate income.


Toll Taxes
This is a tax questioning the tolerance capacity of citizens. Government will construct express ways and install few tax booths on the road. This will convert the road from express way to slowest road. E.g. Gurgaon toll plaza. This is the most sophisticated way to extract money from people. E.g. if you travel from Delhi to Chandigarh there are at least 4 toll plazas.
 
Parking Charges
This is another form of tax through which citizens are being totally exploited. The great planners of Delhi are increasing parking charges to reduce traffic in the city. In fact it is another form of exploitation. Increase of parking charges will never help to reduce traffic in Delhi. This is the technique of MCD to earn unjustified money by misguiding the citizens. The effective methods for reducing traffic in Delhi are:
 
Control Corruption
Genuine income of most of the officers maintaining car in Delhi are not enough to maintain even a motor cycle. If we reduce corruption in Delhi many officers who are using car will use motor cycle and those using motor cycle will shift to cycles.
 
Control Car loan system
Now any person with Rs. 20,000/- in hand can take a car loan. This is the main reason of increasing number of vehicles in the capital and increase in traffic jams.
 
Entertainment Tax
This is another way of taxing to extract money from citizens.
 
Other State Taxes
a. Stamp duty on the transfer of assets
b. Property/building tax that is levied by local bodies
c. Agriculture income tax levied by the State Governments on the income from plantations
d. Luxury tax that is levied by certain State Government on specified goods.

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