Prelims POWER PLAY- Economy-2

The Government of India levies two types of taxes on the citizens of India – Direct Tax and Indirect Tax. Indirect taxes are usually transferred to another person after being initially levied as a direct tax. Common examples of an indirect tax include Goods and Services Tax (GST) and VAT.

Direct taxes, usually levied on a person’s income are paid directly by taxpayers or an organization to tax authorities of the Government of India. The person or organization in question cannot transfer this type of tax to another person or entity for payment. Some of the examples of direct taxes include income tax and corporate tax.

The various types of direct taxes levied on citizens by the Government of India are as follows:

1) Corporate Tax

● Minimum Alternative Tax (MAT)

● Fringe Benefits Tax (FBT)

● Dividend Distribution Tax (DDT)

● Securities Transaction Tax (STT)

2) Income Tax

3) Capital Gains Tax