Direct vs Indirect Taxes: Explained | NDTV Profit
Countdown To Budget | What are indirect and direct taxes? How do they impact you?
Mallica Mishra tells you all you need to know.
Stay tuned for #Budget2024 coverage: https://bit.ly/3Sn7gay
Mallica Mishra tells you all you need to know.
Stay tuned for #Budget2024 coverage: https://bit.ly/3Sn7gay
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TVTranscript
00:00 What are direct and indirect taxes?
00:02 Direct taxes are directly charged by the government on income and profits.
00:06 The Central Board of Direct Taxes or CBDD is responsible for the collection and administration of direct taxes.
00:13 CBDD is governed by the Department of Revenue.
00:16 Now, unlike direct taxes that are charged over income and profits, indirect taxes are charged on goods and services.
00:24 They are referred as indirect because they are paid to the government via an intermediary.
00:29 The CBDD is responsible for the collection and administration of indirect taxes.
00:36 It is governed by the Department of Revenue as well.
00:39 Let's look at some examples of direct and indirect taxes.
00:43 Income tax and capital gains tax are the most common examples of direct taxes.
00:48 Income tax is imposed on the income earned in a given financial year
00:52 where the tax is paid on the basis of income tax slabs of the IT department.
00:57 Capital gains tax is a tax amount that one needs to pay to the government on any capital gains
01:03 that may arise out of investments such as land or equity.
01:08 Capital gains tax is charged as long-term capital gains or short-term capital gains
01:13 based on the duration of the investment.
01:16 GST and customs duty are common examples of indirect taxes.
01:20 GST is the most comprehensive indirect tax as it unifies VAT, service tax, sales tax and others
01:28 that were mandatory earlier under one umbrella.
01:31 It is imposed on goods and services for domestic consumption
01:35 and it is levied on the basis of the tax slabs laid by the GST Council of India.
01:40 Customs duty is a tax paid on any international purchase.
01:44 It is levied to ensure that any commodity that comes into India from abroad is taxed.
01:50 For more such quick explainers stay tuned to NDTV Profit.