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Introduction To Direct Taxes

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18 views2 pages

Introduction To Direct Taxes

Uploaded by

vishalsachdeva2809
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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1.

Introduction to Direct Taxes

Direct taxes are taxes paid directly to the government by individuals or organizations based on
income or wealth. The taxpayer bears the entire burden, and it cannot be transferred to another
party.

Key Features of Direct Taxes

1. Non-Transferable:

• The burden of the tax cannot be shifted to others.

2. Based on Ability to Pay:

• Taxes are proportional to the taxpayer's income or wealth, making them


progressive.

3. Progressive Nature:

• Higher income or wealth leads to higher tax rates.

Types of Direct Taxes

4. Income Tax:

• Levied on individual and business income.

• Calculated on a progressive scale based on income slabs.

5. Corporate Tax:

• Imposed on profits earned by companies.

• Rates vary for domestic and foreign companies.

6. Capital Gains Tax:

• Levied on profits from the sale of assets like property, stocks, or bonds.

• Classified into:

• Short-term capital gains (STCG)

• Long-term capital gains (LTCG)

7. Wealth Tax (Abolished in many jurisdictions):

• Levied on the net wealth of individuals or entities exceeding a certain


threshold.

8. Estate Tax/Inheritance Tax:

• Tax on the transfer of wealth from deceased individuals to their heirs.

9. Securities Transaction Tax (STT):


• Imposed on transactions in securities traded on stock exchanges.

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