Direct Tax Vs Indirect Tax

Direct Tax Vs Indirect Tax:

Direct taxes are paid in entirety by a taxpayer directly to the government. It is also defined as the tax where the liability as well as the burden to pay it resides on the same individual. Direct taxes are collected by the central government as well as state governments according to the type of tax levied. Major types of direct tax include:

• Income Tax: Levied on and paid by the same person according to tax brackets as defined by the income tax department.
• Corporate Tax: Paid by companies and corporations on their profits.
• Wealth Tax: Levied on the value of property that a person holds.
• Estate Duty: Paid by an individual in case of inheritance.
• Gift Tax: An individual receiving the taxable gift pays tax to the government.
• Fringe Benefit Tax: Paid by an employer that provides fringe benefits to employees, and is collected by the state government.

Indirect tax, as mentioned above, include those taxes where the liability to pay the tax lies on a person who then shifts the tax burden to another individual.

Some types of indirect taxes are:

• Excise Duty: Payable by the manufacturer who shifts the tax burden to retailers and wholesalers.
• Sales Tax: Paid by a shopkeeper or retailer, who then shifts the tax burden to customers by charging sales tax on goods and services.
• Custom Duty: Import duties levied on goods from outside the country, ultimately paid for by consumers and retailers.
• Entertainment Tax: Liability is on the cinema owners, who transfer the burden to cinemagoers.
• Service Tax: Charged on services rendered to consumers, such as food bill in a restaurant.

Therefore, the prime difference between direct tax and indirect tax is the ability of the taxpayer to shift the burden of tax to others. Direct taxes include tax varieties such as income tax, corporate tax, wealth tax, gift tax, expenditure tax etc. Some examples of indirect taxes are sales tax, excise duty, VAT, service tax, entertainment tax, custom duty etc. However, this is not an exhaustive list of taxes and more types of taxes are levied by the government on specific cases.

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Key differences between Direct and Indirect Tax

Key differences between Direct and Indirect Tax are:

1. Direct tax is levied and paid for by individuals, Hindu undivided Families (HUF), firms, companies etc. whereas indirect tax is ultimately paid for by the end-consumer of goods and services.
2. The burden of tax cannot be shifted in case of direct taxes while burden can be shifted for indirect taxes.
3. Lack of administration in collection of direct taxes can make tax evasion possible, while indirect taxes cannot be evaded as the taxes are charged on goods and services.
4. Direct tax can help in reducing inflation, whereas indirect tax may enhance inflation.
5. Direct taxes have better allocative effects than indirect taxes as direct taxes put lesser burden over the collection of amount than indirect taxes, where collection is scattered across parties and consumers’ preferences of goods is distorted from the price variations due to indirect taxes.
6. Direct taxes help in reducing inequalities and are considered to be progressive while indirect taxes enhance inequalities and are considered to be regressive.
7. Indirect taxes involve lesser administrative costs due to convenient and stable collections, while direct taxes have many exemptions and involve higher administrative costs.
8. Indirect taxes are oriented more towards growth as they discourage consumption and help enhance savings. Direct taxes, on the other hand, reduce savings and discourage investments.
9. Indirect taxes have a wider coverage as all members of the society are taxed through the sale of goods and services, while direct taxes are collected only from people in respective tax brackets.
10. Additional indirect taxes levied on harmful commodities such as cigarettes, alcohol etc. dissuades over-consumption, thereby helping the country in a social context.

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Tax, it's types, direct, indirect

Tax is a mandatory fee imposed upon individuals or corporations by the Central and the State Government to help build the economy of a country by meeting various public expenses. Taxes are broadly divided into two categories- Direct and Indirect taxes.

What is Direct Tax?

It is a tax levied directly on a taxpayer who pays it to the Government and cannot pass it on to someone else.

What are the direct taxes imposed in India?

Some of the important direct taxes imposed in India are mentioned below:

• Income Tax- It is imposed on an individual who falls under the different tax brackets based on their earning or revenue and they have to file an income tax return every year after which they will either need to pay the tax or be eligible for a tax refund.

• Estate Tax– Also known as Inheritance tax, it is raised on an estate or the total value of money and property that an individual has left behind after their death.

• Wealth Tax– Wealth tax is imposed on the value of the property that a person possesses.

However, both Estate and Wealth taxes are now abolished.

What are the advantages of direct taxes?

Direct taxes do have a certain advantage for a country’s social and economic growth. To name a few,

• It curbs inflation: The Government often increases the tax rate when there is a monetary inflation which in turn reduces the demand for goods and services and as a result of descending demand, the inflation is bound to condense.

• Social and economic balance: Based on every individual’s earnings and overall economic situation, the Government has well-defined tax slabs and exemptions in place so that the income inequalities can be balanced out.

What is the most common disadvantage of direct taxes?

Direct taxes come with a handful of disadvantages. But, the very time-consuming procedures of filing tax returns is a taxing task itself.

What is Indirect Tax?

It is a tax levied by the Government on goods and services and not on the income, profit or revenue of an individual and it can be shifted from one taxpayer to another.

Earlier, an indirect tax meant paying more than the actual price of a product bought or a service acquired. And there was a myriad of indirect taxes imposed on taxpayers.

Let’s discuss a few indirect taxes that were earlier imposed in India:

• Customs Duty- It is an Import duty levied on goods coming from outside the country, ultimately paid for by consumers and retailers in India.

• Central Excise Duty– This tax was payable by the manufacturers who would then shift the tax burden to retailers and wholesalers.

• Service Tax– It was imposed on the gross or aggregate amount charged by the service provider on the recipient.

• Sales Tax– This tax was paid by the retailer, who would then shifts the tax burden to customers by charging sales tax on goods and service.

• Value Added Tax (VAT)– It wascollected on the value of goods or services that were added at each stage of their manufacture or distribution and then finally passed on to the customer.

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Objectives. Of Information technology Audit

How to Make Mondays Productive

Here are some tips (out of many) that can help you be more productive on Mondays and make you hate them less.

1. Start the week on the right foot

Mondays can be tough but if you start off on the right foot, it can be great making your rest of the week successful. This is one of the simplest ways to make you Monday feeling good.

• Get up a little earlier

Please stop snoozing your alarm at least on Monday mornings. I never start my week rushing for office. It does great for my energy level for the rest of the day too. And most important, don’t grab your phone as soon as you open your eyes. Practice mindfulness, stop negative thoughts. Get positive thoughts and think about the excitement of the day.

• Pump those jams

Gather your power songs and play in a couple of fun oldies that will make you keep smiling by the time you reach the office. What Monday blues? No more!

• Reach your desk on time

I know it’s tough to be excited about working on Monday mornings, but when you wake up early, you’ll probably be on time. Arriving early to work on a Monday morning will make you ready for the day. It sets a good pace for the rest of your week.

• Get organized

And you are there on your desk. Does it seem a little disorganized? Clean it up! Is your inbox cluttered? Sort through it! Is your task list complicated? Move aside anything unimportant to set priorities right.

• Start off with a tough task

As you’re ready to start your day, make sure you are choosing the tough tasks. Be a little hard on yourself, trust me, it will do good for the rest of the day. You’ll be better able to handle other tasks and feel easy when you’re left with easy-to-do tasks by the end of the day.

While these may not seem like a lot, they’re all simple ways to kick off the new week on the right foot. You might make the best of your Mondays.

2. Get one thing done immediately

The time you lay your eyes on your system, keep one thing in mind, you are not going to switch between tasks. You know there is nothing more satisfying than knowing that you’ve accomplished one from the many tasks. Knock your tasks off your plate one by one. Do something that will get your soul in the right mode

3. Take ownership of your state of mind — physical and mental

Growing up happiness chemicals should be done as early as possible to kick start Monday. The way you perceive your Monday morning largely depends on your state of mind. If you are in a bad mood everything around you will be very disturbing. And how horrible do you feel when you feel drained off your physical energy?

“The kingdom of heaven is not a place but a state of mind.” ~John Burroughs

The physical state of mind

• Schedule the intense workout.
• Pre-set the healthy morning breakfast to get into ‘work mode’.
• Plan the morning dance party with your friends.

The mental state of mind

• Get aware of your thoughts and emotions.
• Refocus your mind on something empowering.
• Be sure of what you are about to do next.

When you are able to change your state of mind you more feel like you are in control of how efficiently your body and mind function, regardless of Monday. No longer will your brain wander around and you can bring back focus and productivity to your days.

4. Mind your time

Another bit of making your Mondays productive is to have a time tracking system to organize your time. How long do you take a complete task? Are you daydreaming? Are you taking longer than normal to accomplish a list of tasks? This is usually what happens on Monday. Therefore, having a time tracking system can do wonders. The other benefit is that it provides you a more accurate vision on how much free time you actually have and how long certain tasks actually take

5. Send out good vibes

When I think I am able to set myself up for a great Monday, I make sure I am motivating my team as well. Whether you play a managerial role like me or not, you can manage to motivate your team or people around you. Planning, organizing, managing time are not just enough for a productive and happy Monday, you should persevere with a positive attitude.

Mondays don’t have to be bad. That’s 52 days a year, about 15% of your days, which is a lot. Let’s not waste these days. Because Mondays can energize your week or jeopardize everything, do it right!

Ways to fight anxiety and stress

Thereare some ways that can help you to fight stress and anxiety. 

1. Communicate with the People Around You

Whenever you feel anxious about deadlines or a task that is taking longer to end, talk to people in your team or be around them. This is one great move to get rid of anxiety. When u express what’s going on inside me, u r more at peace with urself. In these situations, having a workplace buddy you can talk to can be a boon, with someone you won’t be afraid to communicate about whatever is giving you anxiety. It will help you get through the day.

2. Try Gentle Stretching

When stress affects the brain, the effect is perceived by the body as well. Sometimes v have days of back-to-back conference calls or a milestone to achieve. And u r  feeling too much discomfort. At this time, stretch out a little to manage anxiety at work.

one of favorite exercise is moving eyes around, moving neck and head, easy stretch that relieves tension. Relax by breathing, relax by visualization, stay calm and relax by interrupting your anxious thinking.

3. Avoid Triangles

A triangle is created when you speak to a third person about a problem you're having with someone else, it builds up a number of things and stress. Gossiping about coworkers, criticising someone on their back or venting about others will provide temporary relief but it builds up tension and stress. This causes negativity and that brings up anxiety. Work on the conflict by communicating the facts of the situation. Show that you’d like to reach a resolution to create an open and honest workplace. 

4. Set Realistic Deadlines

I know everyone has to deal with tough deadlines. Anxious people are mostly complaining about the deadlines that they cannot meet. So why not in the first place set it realistically. When u set managed at a manageable pace, making nobody feel anxious about it.

SEZ

Objectives of Special Economic Zones in India

• Generation of additional economic activity
• Promotion of exports of goods and services
• Promotion of investment from domestic and foreign sources
• Creation of employment
• Development of infrastructure facilities
• Simplified procedures for development, operation, and maintenance of the Special Economic Zones and for setting up units and conducting business
• Single window clearance for setting up of a SEZ and an unit in SEZ
• Single window clearance on matters relating to Central as well as State Governments
• Easy and simplified compliance procedures and documentations with stress on self certification

Key Advantages of SEZ Units in India

• 10-year tax holiday in a block of the first 20 years
• Exemption from duties on all imports for project development
• Exemption from excise / VAT on domestic sourcing of capital goods for project development
• No foreign ownership restrictions in developing zone infrastructure and no restrictions on repatriation
• Freedom to develop township in to the SEZ with residential areas, markets, play grounds, clubs and recreation centers without any restrictions on foreign ownership
• Income tax holidays on business income
• Exemption from import duty, VAT and other Taxes
• 10% FDI allowed through the automatic route for all manufacturing activities
• Procedural ease and efficiency for speedy approvals, clearances and customs procedures and dispute resolution
• Simplification of procedures and self-certification in the labor acts
• Artificial harbor and handling bulk containers made operational through out the year
• Houses both domestic and international air terminals to facilitate transit, to and fro from major domestic and international destinations
• Has host of Public and Private Bank chains to offer financial assistance for business houses
• A vibrant industrial city with abundant supply of skilled manpower, covering the entire spectrum of industrial and business expertise
• Well connected with network of public transport, local railways and cabs
• Pollution free environment with proper drainage and sewage system
• In-house Customs clearance facilities
• Easy access to airport and local Railway Station
• Full authority to provide services such as water, electricity, security, restaurants and recreational facilities within the zone on purely commercial basis
• Abundant supply of technically skilled manpower
• Abundant supply of semi-skilled labor across all industry sector

Some of the Established Important Special Economic Zones in India are :

• Falta food processing unit, West Bengal
• Salt Lake Electronic City, West Bengal
• Manikanchan - Gems and jewelry, West Bengal
• Calcutta Leather Complex, West Bengal
• Karnataka Biotechnology and Information Technology Services - SEZ on biotechnology sector in Bangalore's Electronics City, over an area of 43 acres
• Shree Renuka Sugars Limited - SEZ on sugarcane processing complex covering 100 hectares, comprising a sugar plant, power station and distillery, at Burlatti in Belgaum district
• Ittina Properties Private Limited and three other - SEZs in IT sector, covering electronics, hardware and software sectors in
• Bangalore, over an area of 15.732 hectares
• Divyasree Infrastructure - SEZ in the IT/ITES sector over an area of 20.234 hectares in Bellandur Amani Kane near Bangalore
• Chaitanaya Infrastructure Private Limited - SEZ in the IT/ITES sector in Bangalore over an area of 20.24 hectares
• Bagmane Developers Private Limited - SEZ in the IT/ITES sector in Raman Nagar in Bangalore North over an area of 15.5 hectares
• Shipco Infrastructure Private Limited - Free Trade Ware Housing Zone in Karnataka over an area of 120 hectares
• Hinduja Investments Private Limited - SEZ in the textile and apparel sector at Doddamannugudde in Bangalore Rural district, over an area of 100 hectares
• Wipro Infotech - SEZ on IT / ITES at Electronics City, Sarajpur Bangalore
• Hewlett Packard India Software Operation Pvt. Ltd. - SEZ on IT
• Food processing and related SEZ services in Hassan, over an area of 157.91 hectares.
• SEZs on pharmaceuticals, biotechnology and chemical sectors in Hassan, covering of 281.21 hectares.
• SEEPZ - Andheri (East), Mumbai
• Khopata - Multi-product, Mumbai
• Navi Mumbai - Multi-product, Mumbai