Taxation Flashcards
Octroi tax is
Entry tax
Art 286
States can’t impose tax on a sale outside the state.
Direct tax
Responsibility of paying and burden of payment on same individual
Indirect tax
Responsibility of paying and burden of payment on different entities.
Customs duty imposed when
It changes int border
Sales tax levied by
State govt
Types of direct tax
Income,
corporate,
min alt tax MAT,
Professional tax,
LTCG, STCG (capital gains)
Professional tax levied by
State govt
All direct taxes except professional tax imposed by
Central govt
Define: Taxable income
Income after tax exemptions
Ad valorem and specific tax
- Tax on value
- Tax on any thing but value
Regressive taxation
As income increases, proportion of income paid as tax decreases.
Proportional taxation
Proportion of income paid as tax remains fixed.
Progressive taxation
As income increases, proportion of income paid as tax increases.
Art 301- 308
Related to inter states sales.
Central sales tax is
Levied by cent then transferred to selling state.
Input tax credit ITC
adjust the taxes paid at the time of purchase with the amount of output tax (tax on sales) and balance liability of tax (tax on sales minus tax on purchase) has to be paid to the government. This mechanism is called utilization of input tax credit
