Sources of Direct Tax in India

Sources of Direct Tax in India

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The sources of direct tax in India are given as under:

Income Tax Act - Income Tax Act is also called the IT Act, 1961. Income Tax in India is governed by the rules set by this act. The income taxed by this act can be generated from any source such as profits received from salaries and investments, owning a property or a house, a business, etc. The IT Act defines the tax benefit you can avail of on a life insurance premium or a fixed deposit. It also decides the savings from your income via investments and the tax slab for your income tax.

Wealth Tax Act - The Wealth Tax Act came into effect in the year 1951 and is in charge of the taxation linked with an individual’s net wealth, a Hindu Unified Family (HUF), or a company. The easiest computation of wealth tax was.

Gift Tax Act - This Act was brought into existence in the year 1958 and assured that if a person received gifts or presents, valuables, or monetary, he has to pay a tax on those gifts. The tax on the aforementioned gifts was sustained at 30 percent but it was put to an end in the year 1998. Originally, if a gift was given, and it was somewhat like shares, jewelry, property, etc. it was subject to tax. As per the new rules, the present given by the members of the family like parents, spouses, uncles, aunts, sisters, and brothers is not subject to tax. Even presents you receive from the local authorities are also exempted from such taxes. If somebody, other than that of the exempted entities, presents you anything, which has a value beyond Rs. 50,000 then the whole gift amount is subject to tax.

Expenditure Tax Act - The Expenditure Tax Act came into existence in the year 1987 and cope with the expenditure made by you, as a person, may incur whilst you avail the services of a restaurant or a hotel. It is appropriate to the entire nation other than Jammu and Kashmir. It asserts that some expenses are liable under the act if the amount is beyond Rs. 3,000 contingents upon a hotel and all the expenses drawn in a restaurant.

Interest Tax Act - This Act of 1974 copes with the tax, which was chargeable on interest produced in some specific situations. In the Act’s last amendment, it is stated that this act does not apply to interest earned after March 2000.