his site provides comprehensive information on Indian
tax infrastructure. The site also focuses on its effectiveness as per the
present taxation scenario in India.
The post economic renaissance in the history of India i.e. post 1990s, has witnessed some of the most astounding changes in the socio-economic scene of India. Liberal and aggressive economic and industrial policies, of the world order, were drafted to inculcate change in the much protected
Indian market. The Indian
tax infrastructure witnessed a paradigm shift of traditional outlook. Studies of the
tax infrastructure or
Indian tax structure focuses on
direct and
indirect taxation in India.
The notable points of the revamped
tax infrastructure of India are enumerated below -
- Overall burden of Direct taxes on Companies and Corporate - India's direct tax burden today stands at over 40%.
- Maximum tax for individual assesses - In India the 30% tax rate applies over income Rs. 2.5 lakh.
- Standard Deduction - In India, the concept of Standard Deduction has been discontinued for salaried employees.
- Fringe Benefit Tax - Fringe Benefit Tax aims at taxing amounts, which are not income but are in the nature of expenditure. Genuine business expenditure such as Sales promotion, including publicity, Conference (including conveyance, tour and travel and hotel, boarding and lodging expenses) should be allowed deduction.
- Depreciation - In India depreciation rate in case of Plant and Machinery is 15%.
- Dividend Distribution Tax - Presently in India a company is required to pay Dividend Distribution Tax @ 14.025% on its distributed profits.
- R&D - In India weighted deduction benefit of 150% is allowed in few sectors.
- Tax Incentives - In India, tax incentives are provided for Infrastructure Sector, Research and Development and other key sectors of the economy.
- Incidence of Indirect Taxes - Average total incidence on selling price in case of consumer goods is 44.11%, capital goods 43.26%, basic goods 30.28% and intermediate goods 30.06%.
- Value Added Tax - VAT should be introduced in all states and union territories. Time is now ripe to do away with other levies. CST should be abolished at the earliest.
Road ahead of the
Tax Infrastructure in India
Tax Infrastructure in India is the most powerful instrument on the part of policy makers of
Indian tax system which will direct to the desired direction, if drafted and executed effectively. The Indian
tax infrastructure is formulated keeping into consideration India's immediate as well as long term goals. The present
tax infrastructure of India which is adopted, are more liberal, investor friendly, and less critical than any other previously drafted Indian
tax infrastructure.
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