Taxation

Direct Tax

A direct tax is a tax that is paid by an individual or an organization to the imposing entity, or to be precise, Direct Tax is the one which is paid to the Government by taxpayers. These taxpayers include people and organization both. Also, it is directly imposed by the Government and cannot be transferred for payment to some other entity. With Direct Taxes, especially in a tax bracket system, it can become a disincentive to work hard and earn more money, as more money you earn, the more tax you pay.

During an income tax assessment, there may be instances when the taxpayer is not satisfied with the assessment made by the Assessing Officer. In such occurrences, the taxpayer is entitled to file an appeal against the Assessing Officer. Appeal of income tax order has to be filed before the Commissioner of Income Tax (Appeals). In this article, we look at the various prerequisites required to file an appeal to Commissioner of Income Tax (Appeals).

Transfer pricing refers to value attached to transfer of goods or services between related parties. Thus, transfer pricing can be defined as the price paid for goods transferred from one economic unit to another, assuming that the two units involved are situated in different countries, but belong to the same multinational firm.

International taxation is the study or determination of tax on a person or business subject to the tax laws of different countries, or the international aspects of an individual country's tax laws as the case may be. Governments usually limit the scope of their income taxation in some manner territorially or provide for offsets to taxation relating to extraterritorial income. The manner of limitation generally takes the form of a territorial, residence-based, or exclusionary system. Some governments have attempted to mitigate the differing limitations of each of these three broad systems by enacting a hybrid system with characteristics of two or more.

Indirect Tax

The indirect taxes are the levies made by Central and State government on the expenditure, consumption, services, rights and privileges yet not on the property or income. This includes duties of customs paid on imports, as well as excise duty paid on production and value added tax on certain stages of production and distribution of products etc. All these comprise to make indirect taxes since they are not directly applicable on the consumer’s income. Considering that indirect taxes are less as compared to income tax due to invisibility on pay slip, various state agencies tend to raise these taxes so as to generate higher revenue. Indirect tax is often also known as the consumption tax, since they are a regressive measure in application, and not rooted in paying ability.

Goods and Service Tax or GST will consolidate all indirect taxes under one umbrella and help Indian businesses become globally competitive. To facilitate easy calculation and payment of taxes, GST has provisions for assessments such as self-assessment. Every registered taxable person shall himself assess the taxes payable and furnish a return for each tax period. This means GST continues to promote self-assessment just like the Excise, VAT and Service Tax under current tax regime.