CONTACT US

084594-00000

About Us  :  Online Enquiry

Download

Direct Taxes: Types and Trends

Direct Taxes: Types and Trends

  • As a proportion of GDP, direct taxes accounted for 5.6% in 2013-14 (RE) which was slightly higher than the 5.5% in 2012-13. There are two types of direct taxes viz. the Corporation tax and the income tax which have made direct taxes as a category, the more important contributor to the Central Government’s tax revenue.
  • The Indian Constitution reserves the right to tax agricultural and non­agricultural incomes for the States and the Central Governments respectively. Most of tile States do not levy a tax on agricultural incomes and thus here we are with non-agricultural income tax (or personal income tax) only.
  • Since independence, the income tax rates have declined significantly and thee has been enormous increase in the coverage of the tax. In the recent years, almost one-fifth of the total tax collections is accounted for by the personal income tax.
  • Corporate Tax is the tax levied on the taxable income of a company is called corporation tax or super tax. It is the most important contributor to the Central Government’s total tax revenue. There has been a compositional change in gross tax revenues since 2007-8.                                      Direct Taxes: Types and Trends
  • As a proportion of GDP, direct taxes accounted for 5.5 per cent in 2011-12, well below the peak of 5.9 per cent in 2007-08. The two specific measures aimed at expanding the direct tax base in the Budget for 2012-13 were the introduction of the provisions of GAAR in the Income Tax Act and extending the provisions of alternate minimum tax (AMT) to ail non-company assesses.
  • However, in view of the apprehensions raised about the Rules and the recommendations of the Shome Committee, the provisions have been deferred. The provisions regarding AMT have been extended to all non-company assesses and it is provided that a person other than a company that has claimed deduction under any section (other than section 80P) included in Chapter VI-A under the heading ‘C — Deductions in respect of certain incomes’ or under section 10AA, shall be liable to pay AMT at the rate of 18.5 per cent.
  • In order to bring about greater certainty and to reduce litigation in matters related to transfer pricing and international taxation, the advance pricing agreement (APA) scheme has been notified.                                                                     Direct Taxes: Types and Trends
  • APA is an agreement in advance between a taxpayer and the revenue department on an appropriate transfer-pricing methodology for a set of transactions over a fixed period of time in the future. APAs therefore offer better assurance on transfer-pricing methods and are conducive for providing certainty and unanimity of approach.

Non-Debt Capital Receipts

  • Recoveries of loans and disinvestment receipts are the two key receipts of the non-debt capital variety apart from the miscellaneous receipts.
  • The 12th Finance Commission’s recommendation against loan intermediation from the centre to states coupled with the fact that such recoveries of loans have become a minor source in the receipts side has resulted in disinvestment assuming greater importance in comparison. The Budget for 2013-14 envisaged a growth of 23.4% in Non-Debt receipts.

The Cabinet Committee on Economic Affairs has approved disinvestment in the following:

  • Disinvestment of 9.33 per cent paid up equity of Minerals and Metals Trading Corporation (MMTC) Ltd out of the Government of India’s holding of 99.33 per cent through an offer for sale of shares through stock exchanges.
  • Disinvestment of 10 per cent paid up equity of Oil India Ltd. (OIL) out of the Government of India’s holding of 78,43 per cent through an offer for sale of shares through stock exchanges.
  • Disinvestment of 12.15 per cent paid up equity in National Aluminium Company Limited.
  • Disinvestment of 9.59 per cent equity in Hindustan Copper Limited.                                                  Direct Taxes: Types and Trends
  • Disinvestment of 9.50 per cent paid up equity capital in the National Thermal Power Corporation (NTFC) Ltd out of the Government of India’s shareholding of 84.50 per cent.
  • Exchange-traded fund (ETF) for the stocks of the listed central public-sector enterprises (CPSEs) is also being proposed.

ALSO READ : https://www.brainyias.com/indirect-taxes-types-and-trend/

Indian Economy

close-link

Send this to a friend