The two components of our tax system in India are direct tax and indirect tax. Knowing the basics of both direct and indirect taxes is essential. Although corporations and individuals are subject to direct taxes on their income, it is the taxpayers’ responsibility to pay the taxes. In contrast, indirect taxes are levied on the sale of goods and the rendering of services, with the sellers bearing the responsibility of collecting and remitting the taxes rather than the taxpayer directly. On the other hand, final purchasers of goods or services are responsible for paying indirect taxes.

Direct Taxes:

Businesses need to be aware of the latest developments in tax laws as they pose a threat to their operations and could result in fines and legal action. Businesses that have tax-efficient structures will relieve the entity of some of the burden and ensure related compliances. Personal and corporate taxes are examples of direct taxes. We at Rohit Mittal & CO. offer some of India’s top tax advisory services.

Examples of Direct Taxes:

• Income Tax: A tax levied on an individual’s or entity’s income, including wages, business profits, and capital gains.
• Corporate Tax: Imposed on the profits of corporations.
• Property Tax: Assessed on the value of real estate and other tangible assets.
• Wealth Tax: Applied to the net wealth of individuals, including assets like properties, investments, and jewelry.

Administration:

• Direct taxes are typically administered by central or federal revenue authorities.
• Taxpayers are required to file annual tax returns, providing details of their income and assets.

Indirect Tax:

It is imperative to delineate substantial tax and compliance strategies in order to mitigate the incidence of indirect taxes and the associated risk of assessments and scrutiny. This requires competent guidance and support from professionals. Delhi’s top indirect tax consultants are Rohit Mittal & Co. Our services include helping with GST registrations, filing returns, getting refunds, representing clients before the GST authorities, and assisting with annual and transitional compliances. In addition, we offer services concerning excise duties, VAT & CST, customs, service tax, etc.

Examples of Indirect Taxes:

• Value Added Tax (VAT): Applied at each stage of the production and distribution chain based on the value added to the product.
• Goods and Services Tax (GST): A comprehensive indirect tax levied on the supply of goods and services.
• Excise Duty: Imposed on the production of certain goods within a country.
• Customs Duty: Levied on goods imported into or exported out of a country.

Administration:

• Indirect taxes are often collected by businesses on behalf of the government.
• The burden of compliance and collection falls on businesses involved in the production and distribution of goods and services.