Tax Laws (Brief Introduction)

Key Acts under Indian Tax Laws

Direct Tax Laws

• Income-tax Act, 1961 – Governs taxation on individual, corporate, and other incomes.
• Wealth-tax Act, 1957 (now abolished w.e.f. 2016, replaced by additional surcharge).
• Expenditure Tax Act, 1987 – Tax on certain luxury expenditures (not widely used).
• Gift Tax Act, 1958 (abolished, but certain gifts are taxable under the Income-tax Act).
• Equalisation Levy (Finance Act, 2016) – Tax on digital transactions (Google Tax).

Indirect Tax Laws

Goods and Services Tax Acts (GST Laws), 2017 – Unified tax replacing VAT, Service Tax, Excise, etc. Includes:

• Central Goods and Services Tax (CGST) Act, 2017
• Integrated Goods and Services Tax (IGST) Act, 2017
• Union Territory Goods and Services Tax (UTGST) Act, 2017
• GST (Compensation to States) Act, 2017

Customs Act, 1962 – Regulates import/export duties.

Customs Tariff Act, 1975 – Sets tariff rates on imports/exports.

Regulatory / Allied Taxation Acts

• Prohibition of Benami Property Transactions Act, 1988 (amended 2016) – To curb black money.
• Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 – Targets undisclosed foreign assets.
• Finance Acts (annual) – Passed every year to update tax rates, slabs, and provisions.

FAQs on Tax Laws

Q1. What is tax law?

It governs how individuals, businesses, and other entities pay taxes to the government, including rates, procedures, and penalties.

Q2. Which are the main direct taxes in India?

Income-tax Act, 1961
Equalisation Levy (Finance Act, 2016)
Black Money (Undisclosed Foreign Income and Assets) Act, 2015
Benami Transactions (Prohibition) Act, 1988

Q3. Which are the main indirect taxes in India?

GST Acts (CGST, IGST, UTGST, Compensation Act, 2017)
Customs Act, 1962
Customs Tariff Act, 1975

Q4. Who has to pay income tax?

Individuals, Hindu Undivided Families (HUFs), companies, firms, LLPs, and other entities earning taxable income above the exemption limit.

Q5. What is GST?

Goods and Services Tax is a unified indirect tax on the supply of goods and services across India.

Q6. Who has to register for GST?

Businesses with turnover above the threshold (₹20 lakh for most states; ₹10 lakh for special category states) or those supplying interstate.

Q7. What is IGST?

Integrated GST levied on interstate supply of goods and services.

Q8. What is CGST and UTGST?

CGST → Central GST on intra-state supply.
UTGST → GST for Union Territories without legislature.

Q9. What is the GST Compensation Act for?

It ensures states receive compensation for revenue loss due to GST implementation.

Q10. Is customs duty a tax?

Yes. Import/export duties are levied under the Customs Act, 1962 and Customs Tariff Act, 1975.

Q11. Are gifts taxable?

Yes, under the Income-tax Act, gifts above ₹50,000 (from non-relatives) are taxable.

Q12. What is the Equalisation Levy?

A 6% tax on digital transactions, e.g., payments to foreign e-commerce and online advertising services.

Q13. What is a Benami property?

Property held in someone else's name to hide the real owner. Illegal under the Benami Transactions Act, 1988.

Q14. How is black money taxed?

Undisclosed foreign income or assets are taxed with penalties under the Black Money Act, 2015.

Q15. What is the filing due date for income tax?

Usually 31st July for individuals; 30th September for businesses (assessable online through the Income-tax portal).

Q16. Can a small business opt out of GST?

Yes, businesses below threshold limits can avoid GST registration, subject to state exemptions.

Q17. Can GST input tax be claimed back?

Yes, input tax credit allows businesses to offset taxes paid on purchases against taxes collected on sales.

Q18. Are penalties charged for late tax filing?

Yes, under Income-tax and GST Acts, penalties and interest apply for delay or non-compliance.

Q19. Can foreigners be taxed in India?

Yes, if they earn income from Indian sources or have a taxable presence in India.

Q20. Who enforces tax laws?

Income-tax Department (Income-tax, Equalisation Levy, Black Money Act)
CBIC (GST, Customs)
Courts handle disputes and appeals.