PPT: Tax Structure in India | Indian Economy for UPSC CSE PDF Download

 Page 1


Tax Structure in 
India
Page 2


Tax Structure in 
India
Introduction to Taxation in India
Taxes are compulsory financial charges imposed by the government to fund public services and development.
India's tax system is a backbone of economic governance, ensuring revenue for infrastructure, defense, 
education, and welfare.
Constitutional authority divides taxation powers between Central and State governments for federal balance.
Page 3


Tax Structure in 
India
Introduction to Taxation in India
Taxes are compulsory financial charges imposed by the government to fund public services and development.
India's tax system is a backbone of economic governance, ensuring revenue for infrastructure, defense, 
education, and welfare.
Constitutional authority divides taxation powers between Central and State governments for federal balance.
What is Tax? Types of Taxes
Direct Taxes
Paid directly by individuals or entities to 
the government
Income Tax
Corporate Tax
Wealth Tax (abolished)
Indirect Taxes
Levied on goods and services, collected 
via intermediaries
GST
Customs Duty
State Excise
Local bodies also levy minor taxes like property tax and octroi.
Page 4


Tax Structure in 
India
Introduction to Taxation in India
Taxes are compulsory financial charges imposed by the government to fund public services and development.
India's tax system is a backbone of economic governance, ensuring revenue for infrastructure, defense, 
education, and welfare.
Constitutional authority divides taxation powers between Central and State governments for federal balance.
What is Tax? Types of Taxes
Direct Taxes
Paid directly by individuals or entities to 
the government
Income Tax
Corporate Tax
Wealth Tax (abolished)
Indirect Taxes
Levied on goods and services, collected 
via intermediaries
GST
Customs Duty
State Excise
Local bodies also levy minor taxes like property tax and octroi.
Constitutional Framework of Taxation
Article 265: No tax without law 
4 legality principle.
Article 246 & Seventh 
Schedule: Distribution of 
taxation powers.
Union List: Income tax, 
customs, excise.
State List: Stamp duty, land 
revenue, state excise.
Concurrent List: Limited 
fiscal policies.
Article 270 & 280: Tax revenue 
sharing and Finance 
Commission roles.
These articles establish the 
mechanism for distributing tax 
revenue between the Centre 
and States.
Page 5


Tax Structure in 
India
Introduction to Taxation in India
Taxes are compulsory financial charges imposed by the government to fund public services and development.
India's tax system is a backbone of economic governance, ensuring revenue for infrastructure, defense, 
education, and welfare.
Constitutional authority divides taxation powers between Central and State governments for federal balance.
What is Tax? Types of Taxes
Direct Taxes
Paid directly by individuals or entities to 
the government
Income Tax
Corporate Tax
Wealth Tax (abolished)
Indirect Taxes
Levied on goods and services, collected 
via intermediaries
GST
Customs Duty
State Excise
Local bodies also levy minor taxes like property tax and octroi.
Constitutional Framework of Taxation
Article 265: No tax without law 
4 legality principle.
Article 246 & Seventh 
Schedule: Distribution of 
taxation powers.
Union List: Income tax, 
customs, excise.
State List: Stamp duty, land 
revenue, state excise.
Concurrent List: Limited 
fiscal policies.
Article 270 & 280: Tax revenue 
sharing and Finance 
Commission roles.
These articles establish the 
mechanism for distributing tax 
revenue between the Centre 
and States.
Classification of Taxes in India
Based on Burden:
Progressive Tax
Higher income ³ higher tax rate 
(Income Tax)
Wealthier individuals pay a higher 
percentage of their income
Proportional Tax
Flat rate regardless of income 
(Corporate Tax)
Same percentage rate applies to all 
taxpayers
Regressive Tax
Higher burden on lower income 
(GST on essentials)
Takes a larger percentage from low-
income earners
Based on Calculation:
Specific Tax: Fixed amount per unit (Excise on 
cigarettes)
Ad-Valorem Tax: Percentage of value (GST, customs 
duty)