Close
Close

Buy a Life Insurance Plan in a few clicks

Now you can buy life insurance plan online.

Kotak e-Term

Protect Your family’s financial future with Kotak e-Term. Know more

Kotak Assured Savings Plan

A plan that offer guaranteed returns and financial protection for your family. Know more

Kotak Guaranteed Savings Plan

A plan that offers long term savings and insurance in one premium. Know more

Kotak e-Invest

Insurance and investment in one plan with Kotak e-Invest. Know more

Kotak Lifetime Income Plan

Retirement years are the golden years of life. Know more

Close

Get a Call

Enter your contact details below and we will get in touch with you at the earliest.

  • Select your Query

Thank you

Our representative will get in touch with you at the earliest.

Tax Structure in India

Tax structure ins India is a bit complex. Read this article to understand the tax system in India, types of taxes and the authorities involved to determine flow of tax in India. Click here to know more.

  • Dec 10, 2018
  • 4,194 Views

The government imposes taxes to fund various projects related to infrastructure, public schools, military production, and law enforcement, among others for the overall development of the nation.

The tax system in India is a three-tier structure, which includes the State Government, Central Government, and the local authorities such as municipal corporations. It is important to note that taxes in the country cannot be levied unless it is passed as a law.

Types of tax in India

The tax system in India constitutes of two types of taxes – direct tax and indirect tax.

A direct tax is imposed on individuals and corporate entities. Such a type of tax is borne solely by the taxpayer and is dependent on the income group, which the taxpayer falls in. The lower income group assumes a lower tax liability and vice versa. Some common types of direct taxes include income tax, wealth tax, gift tax, and capital gains tax. There are two major types of direct tax in India – Income tax and corporation tax. While income tax is levied on individuals and organizations, corporation tax is charged on domestic corporates towards the profits they earn for a specific period.

Indirect taxes, on the other hand, are those, which are levied through goods and services. Earlier, there were numerous indirect taxes in play such as Value Added Tax, octroi, entry tax, entertainment tax, and Central Sales Tax, among others. However, the Goods and Services Tax (GST), which came into effect on 1st July 2017, replaced the tax structure in India. The main aim of GST was to eliminate the cascading effect of taxes on the sale of goods and services. This, in turn, had a direct impact on the cost of goods. As the cascading effect of tax was removed, the cost of goods decreased.

The GST regime eliminated around 17 taxes and imposed just three taxes – namely Central GST (CGST), State GST (SGST), and Integrated GST (IGST).

  • Central GST –This tax is levied on intra-state sale and is collected by the Central Government.
  • State GST – This tax is imposed on intra-state sale and is collected by the State Government.

This means that for any sale within a state, say within Tamil Nadu, CGST is levied in addition to SGST. Therefore, the revenue will be shared equally between both the State and the Central Government.

  • Integrated GST – This tax is applicable to an inter-state sale, for instance, a sale transaction between Tamil Nadu to Maharashtra. It is collected by the Central Government.

Revenue authorities in India

There are various bodies governing and regulating the tax system in India. The following are the two main revenue authorities in the country.

Central Board of Direct Taxes

This body is responsible for providing inputs regarding planning and policies about direct taxes. The Central Board of Direct Taxes is a part of the Department of Revenue in the Ministry of Finance.

Central Board of Indirect Taxes & Customs

This body is also part of the Department of Revenue in the Ministry of Finance. It was renamed from Central Board of Excise and Customs, based on the proposal by the Finance Minister Arun Jaitley. This revenue authority assists the government in formulating policies in relation to GST, along with central excise levy and customs functions.

The tax structure in India has undergone numerous modifications in the past years. There have been changes with regard to standardization of income tax rates and easier governing laws. Due to this, the government has achieved results such as higher compliance with tax laws, enhanced enforcement, and ease of paying taxes.

Read Here for More Related Articles:

Download Brochure

Features

  • Increasing Life Cover*
  • Guaranteed^ Maturity Benefits
  • Enhanced Protection Through Riders
  • Tax Benefits
  • Dual Benefits: Guaranteed^Maturity + Death benefits

Ref. No. KLI/22-23/E-BB/999

T&C

Download Brochure

Features

  • Enhanced Protection Through Riders
  • Life Cover
  • Tax Savings
  • Multiple Premium Payment Terms
  • Guaranteed @ Loyalty Addion
  • Accrued Guaranteed @ Additions

Ref. No. KLI/22-23/E-BB/490

T&C

- A Consumer Education Initiative series by Kotak Life

Similar Articles

All You Need to Know About Section 80C

What is ITR 5 Form and How to File ITR 5?

Types of Income Tax Return (ITR) Forms

Post Office Savings Scheme - All You Need to Know

What To Do If Your TDS Is Not Deposited With The Government?

Understand ITR4 Form: How to Fill, Structure & Determine Your Eligibility

Why is Form 16 Important?

Why January Is an Important Month for Saving Tax?

Income Tax Exemption for Disabled

What is Salary Protection Insurance and Why You Need It

Received an Income Tax Notice? Your Guide to Understanding Intimations under Section 143 (1)

Invest in Tax-Free Bonds: Understanding the Benefits and Who can Invest?

Maximize Your Savings: Tax Tips for Salaries Above ₹20 Lakhs

What is Tax Evasion, and What are the Penalties for Tax Evasion in India?

How Do Assured Savings Plans Work and Why You Should Consider One?

Personal Finance - How to Deal with Emergencies When Preparing Finances

How to File TDS Return?

All about TDS Payment Online & Due Dates

A Comprehensive Guide to Understand the ITR 7 Form

9 Income Tax Myths That Could Cost You Money while Filing returns

What is Form 26AS - All You Need To Know

What is Section 80C - Explained in Detail

What is indirect tax and its types?

What is TDS Refund Process?

Presumptive Taxation for Business and Profession

Income Tax Deductions for Disabled Persons Under Section 80U

Top 8 Tax-Saving Methods in India- Budget Planning

धारा 80सी आयकर अधिनियम, 1961

प्रधानमंत्री सुरक्षा बीमा योजना

Income Tax Deduction Under Section 80CCC In India

Difference Between Gross Income & Total Income in Calculating Income Tax

How to create wealth through a savings plan?

How Should I Allocate A Monthly Savings Plan For Long-Term Benefits?

Tax Season is Coming- Know How to Save Tax

Tax Saving Options for Salaried Employees

Section 16 of the Income Tax Act (ITA), 1961

Everything You Need to Know About Tax Benefits of National Pension Scheme (NPS)

What is Section 80C Deduction?

Income Tax Benefits for Doctors

Tax Saving for Self Employed in India

What is a savings plan?

Should one prefer a guaranteed savings plan over monthly income schemes?

LTC Cash Voucher Scheme October 2020 – Everything You Need to Know

12 Tax Changes in Budget 2022 that May Impact Your Personal Financial Planning

Tax Rate Chart for FY 2022-2023: What is TDS Slab?

Easy ways to make personal savings plans

Income Tax Filing For NRI in India

How to Pay Advance Tax Online in India

How to file Form 16 online?

Section 80C Deductions as per Income Tax Act, 1961

What is Form 16B?

Form 16, Form 16A, and Form 16B?

Income Tax Slabs and Rates in India for FY 2021-22/AY 2022-23

What is Section 80C Deduction Limit?

Saving Plans to Give Children a Debt-free College Education

Section 80G of the Income Tax Act

How to create a savings plan and make good investment choices

What Investment Options Come with Tax Incentives?

What is Section 10D of the Income Tax Act?

All You Need To Know About Assured Savings Plan

How to E-Verify ITR: A Step-by-Step Guide to Electronically Verify your Income Tax Return

What is Section 80CCC of the Income Tax Act 1961

How to Check Income Tax Refund Status Online in India

हाउस रेंट अलाउंस क्या है और इसके छूट की गणना कैसे की जाती है?

Should you prefer a Guaranteed Savings plan over monthly income schemes?

Understanding Tax Exemptions in ULIP (Old and New)

TDS Due Dates of FY 2022-23 For Return Filing

How Much Money This Budget 2019 Can Help You Save

Have You Considered Term Insurance a Part of Your Tax Planning?

Tax Saving Tips: Best Ways to Save Income Tax for 2021

How to Get Form 16?

How to Calculate returns on an assured savings plan?

All you need to know About Tax on Inheritance

How to File ITR Online

9 Unusual Investments you Didn't Know for Saving Taxes in India

ITR 1: Sahaj Form

Saving Income tax in 2017 - 18

Difference between Section 80C and 80CCC of the Income Tax Act, 1961

What is the Last ITR Filing Date and Penalty for Late Filing of ITR?

Complete Savings Plan for Low Income Earners

What is EEE in income tax? 5 tax-free investment options to become crorepat

How to Save Tax on Salary Arrears?

What are Direct Taxes? How to Avoid being Overtaxed?

What is HRA (House Rent Allowance) and How is HRA Exemption Calculated?

Why Tax Planning Should Be an All-year Round Activity

Tax-Free Income in India

Income Tax Calculator: How Life Insurance Policies are Taxed? Explained

8 Things to Help You Select a Savings Investment plan

Impact of GST on Life Insurance in India

How to e file ITR on Income Tax Government Portal

What is Section 195 of the Income Tax Act? TDS on Non-Residents of India

Income Tax Deductions Under Section 80C

धारा 80डी आयकर अधिनियम, 1961

Personal Finance - Meaning, Importance, and Tips for Personal Finance

Things to Do After Filing Income Tax Returns

What is the Difference Direct Tax and Indirect Tax

Income Tax Exemption for Physically Handicapped Dependent

How To Save Tax Better with 80C

Plan your Daughter's Wedding With Best Monthly Savings Plan

How to Claim a Tax Refund?

What is the Percentage of Tax Deducted at Source (TDS)?

5 Popular Tax-Saving Schemes in India

Section 10 (10d) of Income Tax Act, 1961 on Payouts of Life Insurance Policy

E-Filing of Income Tax Returns in India

What is Rule 132 of Income Tax? How Does it Affect You?

What is TDS (Tax Collected at Source)? A comprehensive guide

How To Invest In Guaranteed Return Plans For Higher Returns And Financial Security?

Tips to plan your savings in 2022

Interest Imposed Under Sections 234A, 234B and 234C

Section 80E: Tax Exemption on Interest on Education Loan

इनकम टैक्स रिटर्न कैसे फाइल करें?

आयकर स्लैब 2021-2022

When Should TDS be Deducted and Who is Liable to Deduct it?

How to Download Form 16?

Financial Planning and Best investment options for Housewives

Why PAN Card is Essential for Income Tax Filing?

What is Form 16A?

Union Budget 2023 and Tax Exemptions on Life Insurance Premium Over ₹5 Lakhs

How to save tax for salaried person?

What are Deferred Savings Plans?

Difference Between Guaranteed Savings Plan and Guaranteed Income Plan

Section 80D - Medical and Health Insurance Tax Benefits Under Section 80D

What is better - Guaranteed Savings Plan or Fixed Deposit?

Income Tax Filing Using Multiple Form 16

How can NRIs prevent double taxation in India?

What is the Maximum Maturity Benefit in Assured Savings Plans?

Tax Deductions You MUST Know

3 Tips to Buy Guaranteed Savings Plan

Challan 280 - How to Use Challan 280 to Pay Income Tax

How to File Form 16 for Salaried Employees?

Tax Benefits of ULIP Plans Available for NRIs

Tax Planning Tips for a Newly Married Couple

Save Income Tax by 31st March: Here Is a Checklist

How to File Form 10E for Tax Relief on Salary Arrears?

What is capital gains tax, and how it works?

List of Important Income Tax FAQs

Guaranteed Return Plans-Why is it a must for you?

What Is Advance Tax and How Is It Calculated?

ITR-6: Guide to filing ITR-6 Form online

How to File Income Tax Return - Everything You Need to Know

Key Changes of the Union Budget 2023 You Must Know

52 Weeks Savings Plan: Daily Savings Plans for a Better Tomorrow

How to Check Income Tax Returns Status Onine?

How to Boost Your Savings with Guaranteed Results

Section 44AD of Income Tax Act for AY 2021-22

सुकन्या समृद्धि योजना (SSY) के कर लाभ क्या हैं?

Income Tax Effects on Salary Deductions in the Union Budget 2023

How to View 26AS and Download Form 26AS Online?

How To Save Tax Using Life Insurance?

Tax Saving Options other than Section 80C

आयकर रिटर्न (आईटीआर) फॉर्म के प्रकार

What is TDS Slab?

स्रोत पर कर कटौती (टीडीएस) क्या है?

Budget 2019: Impact on the Common Man in India

What is the Difference between Assessment Year (AY) and Financial Year (FY)?

Who Should Invest In Savings Plan

What is the TDS Rate on Salary?

Insurance and Endowment: Everything You Need to Know!

Tax Benefit of Investing in Term Plan

What are the Different Types of Taxes in India?

Money Saving Tips for Single Women

What is TDS Exemption Limit?

How to View 26AS and Download Form 26AS Online

What is Tax Deduction at Source (TDS)?

A Guide to Life Insurance Policy’s Tax Benefits and Taxability

Union Budget 2023: Impact on Life Insurance

Difference between Section 80C, 80CCC, 80CCD & 80D

Problems People Face with Tax Returns after a Job Change

Tax Planning and Tax Benefits of Life Insurance

प्रत्यक्ष कर और अप्रत्यक्ष कर में क्या अंतर है?

Guide for Tax Calculation on your Salary

Basics of Guaranteed Savings Plan

Importance of Savings Plan You Need to Know

Are Financial Planning and Tax Planning the Same Thing?

How to Save Income Tax with Insurance

How to Check Income Tax Refund Status Online in India

Financial Benefits and Government Schemes Every Woman in India Should Know

Home Investment Plan to Buy Dream Home

Highlights of the Union Budget 2023-24

All about TDS on Salary under Section 192 – Kotak Life

Income Tax Deductions & Exemptions under Sections 80C, 80D & 80DDB for FY 2021-22 & 2022-23

What is ITR & How to File Income Tax Return?

TDS rules on the sale of jointly owned property

Penalty For Late Filing TDS Return

How Inflation Affects Savings and Investment?

How much gold can you keep at home? Limits and income tax rules explained

Types of Riders in Insurance Policy

Is PF Withdrawal Taxable for NRI?

How to File Income Tax Return without Form 16

What is the Difference between Form 16 and Form 16A?

Do Beneficiaries Pay Taxes on Life Insurance?

ITR 2 Form – Complete Guide

Tax Exemption and Scope of Coverage

What is the difference between TDS and TCS?

How to File Income Tax Return for First Time Tax Payers

Difference Between Guaranteed and Assured Returns

sections Under Section 80C of the Income Tax Act, 1961

How can I get Form 16B from traces?

Best Savings plan for the middle class in India

Tax Saving Guide for 2019-20

Investing Lump Sum Amount

Investment Proofs You Need Submit To Lower TDS Cut From Your Salary

भारत में महिलाओं के लिए सरकारी योजना

A Complete Guide for Filing ITR 3 Form

What is an Endowment Plan?

Tax Benefits for Startups in India

Tax-Savings Investments and Options in India