Direct Tax is the tax paid to the government directly by the assessee like the Income Tax or the Capital Gains Tax. There has been a steady rise in the net Direct Tax collections in India over the years.
All the collections of the direct taxes in India like the Corporate Tax, Personal Income Tax, Securities Transaction Tax, Banking Cash Transaction Tax, and the Fringe Benefit Tax have been going through a healthy ascent.
One of the main forms of Direct Tax is the Taxes on Corporate Income, under which the companies residing in this country pays a tax on their global income arising from all sources. The payment of the tax follows the provisions of the Income Tax Act. On the other hand, the non-resident companies pay the Direct Tax on the income obtained from an India-based business connection.
The Capital Gains Tax is another important form of Direct Tax in India which is payable on capital gains received upon the sale of assets. If the capital assets are in possession for more than three years and regarding the shares, stock exchange securities, mutual fund units the time frame for possessing the asset is one year.
Personal Income tax is another type of Direct Tax, which is under the Central Government controlled by the Central Board of Direct Taxes. The taxpayer is required to pay a tax if the income level reaches above INR 250,000. If the income reaches INR 1 Crore there is a surcharge of 10% imposed on the total tax.