Taxes in India – Part 2

Uploaded by : DreamGains Financials, Posted on : 25 Aug 2015


We have already seen Direct and Indirect Taxes in Part – 1, Following are other types of taxes.

Other Taxes:-

12) Professional Tax :-

If you are earning professional you need to pay professional tax. Professional tax is imposed by respective Municipal Corporations. Most of the States in India charge this tax.


Professional Tax


This tax is paid by every employee working in Private organizations. The tax is deducted by the Employer every month and remitted to the Municipal Corporation and it is mandatory like income tax.

The rate on which this tax is applicable is not same in all states.

13) Dividend distribution Tax:-


Dividend distribution Tax


Dividend distribution tax is the tax imposed by the Indian Government on companies according to the dividend paid to a company’s investors. Dividend amount to investor is tax free. At present dividend distribution tax is 15%.

14) Municipal Tax:-


Municipal Tax


Municipal Corporation in every city imposed tax in terms of property tax. Owner of every property has to pay this tax. This tax rate varies in every city.

15) Entertainment Tax:-


Entertainment Tax


Tax is also applicable on Entertainment; this tax is imposed by state government on every financial transaction that is related to entertainment such as movie tickets, major commercial shows exhibition, broadcasting service, DTH service and cable service.

16) Stamp Duty, Registration Fees, Transfer Tax:-

If you decide to purchase property than in addition to cost paid to seller. You must consider additional cost to transfer that property on your name.


Stamp Duty, Registration Fees, Transfer Tax


That cost include registration fees, stamp duty and transfer tax. This is required for preparing legal document of property.

In simple sense this tax is imposed on the handing over of the title of property ownership by one person to another. It incorporates a legal transaction fee & stamp duty. This amount varies from property to property based on cost.

17) Education Cess , Surcharge:-

Education cess is deducted and used for Education of poor people in INDIA. All taxes in India are subject to an education cess, which is 3% of the total tax payable. The education cess is mainly applicable on Income tax, excise duty and service tax.


Education Cess , Surcharge


Surcharge is an extra tax or fees that added to your existing tax calculation. This tax is applied on tax amount.

18) Gift Tax:-

If you receive gift from someone it is clubbed with your income and you need to pay tax on it. This tax is called as gift tax.


Gift Tax


This tax is applicable if gift amount or value is more than 50000 Rs/- in a year.

19) Wealth Tax:-

Wealth tax is a direct tax, which is charged on the net wealth of the assesse. Wealth tax is chargeable in respect of Net wealth corresponding to Valuation date.Net wealth means all assets less loans taken to acquire those assets. Wealth tax is 1% on net wealth exceeding 30 Lakhs (Rs 3,000,000). So if you have more money, assets you are liable to pay tax.


Wealth Tax


Note: – Wealth tax is abolished by government in budget 2015.Now onwards surcharge of 12% is applicable on individual earning 1 crore and above.

20) Toll Tax:-

At some of places you need to pay tax in order to use infrastructure (road, bridge etc.) build from your money given to government as Tax. This tax is called as toll tax. This tax amount is very small amount but, to be paid for maintenance work and good up keeping.


Toll Tax