Page 21 - Mousumi: Unbelievable Transformation

Basics of Taxation and Career

Prospects
Every year in the month of February, electronic and print media publish analysis
of budget produced by the government before the parliament. Government
declares schemes and tax rates in the budget, which is a matter of debate among
the common populace. People are very much enthusiastic about the tax slab and
relief given by the government for the coming financial year (April to March) in
the budget. The schemes show the expenditure priority of any government,
whereas the taxation part of the budget shows how the government is willing to
manage its fund by the collection of taxes. Tax means the contribution given by
the citizen on his/her income, asset creation, profit or consumption. On the
basis of this, tax is classified broadly into two categories as Direct tax and
Indirect Tax.

1. Direct Tax- The tax paid by the person/organization on which tax

is levied or charged, for example- Income tax. The burden of
direct tax cannot be shifted upon other entities.
2. Indirect tax- Indirect tax is levied item-wise and on the producer,

wholesaler, retailer or end consumer. The burden of indirect tax
can be shifted to the end consumer, for example- Goods and
service tax, i.e GST.

In India, every product is sold on retail price, which shows price inclusive of
all taxes. As the service sector has been booming and contributing largely to the
GDP, the concept of GST was introduced by the government in 2017. The basic
purpose of GST is to simplify the indirect tax payment and make a transparent
tax regime between both the Central and state governments. The statutory
obligation as per the constitution of India relates to division of responsibilities in
the name of subjects of central, state and concurrent list for making of law and
implementation of schemes. Hence, we find the names of tax like CGST &
SGST, as there is a division of GST into Central and State GST. GST return
filing and tax payment have been made online, and with the use of information
technology, e-filing of GST returns is very popular, creating a wide range of
employment in the form of GST return preparers/facilitators. Sale and purchase
details and collection and deposit of GST and claiming the GST credit is the
main area of concern for filing of GST return, which is filed by business
concerns having turnover of and above a certain limit.

For Direct tax, Income-tax is levied on people having an income of certain limit
or range. In India, there is progressive taxation as classification of income group
has been done and different tax slabs are applicable to different range of income.

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