Taxation

India has a well developed tax structure and the authority to levy taxes is divided between central and the state government. The country has a range of tax structures covering business income, capital gains, wealth formation and trade/ commercial transactions.

The taxes can be grouped in two categories:

• Direct taxes: Income tax, Wealth tax and Gift tax, applying on income
• Indirect taxes: Customs duties, Excise duty, Sales tax, Service tax, Octroi/entry tax, applying on commercial transactions.

The Central Government levies all direct taxes and some indirect taxes. The States Governments levy local taxes such as land revenue and municipal taxes (property tax, Octroi/entry tax and local sales tax).