| Pub. Date | : October, 2023 |
|---|---|
| Product Name | : The IUP Journal of Accounting Research and Audit Practices |
| Product Type | : Article |
| Product Code | : IJARAP031023 |
| Author Name | : Rabinarayan Samantara and Nidhi Sharma |
| Availability | : YES |
| Subject/Domain | : Finance |
| Download Format | : PDF Format |
| No. of Pages | : 13 |
The paper explores the different aspects of corporate tax in India. Apart from discussing the historical background and reviewing the relevant literature, efforts have been made to analyze certain significant structural aspects of corporate tax in India. The study involves an extensive review of literature and analysis of secondary data obtained from government records. The findings indicate that corporate tax contributes a significant portion of the total direct tax revenue of the government and even exceeds the share of personal income taxes in recent years. In 2020-21, however, revenue generation from corporate tax was less than the revenue collected from personal income taxes due to the Covid-19 pandemic and reduced corporate tax rates for certain domestic companies. The buoyancy coefficients calculated for corporate tax and personal income tax (in response to changes in GDP) indicated that these coefficients were generally greater for personal income tax than for corporate tax. Therefore, there is ample scope for enhancing corporate tax revenue through further simplification of tax laws and procedures, rationalization of rates and effective check on evasion.
The taxation powers of the union and the state governments with respect to both direct taxes and indirect taxes have been clearly defined in the Seventh Schedule of the Constitution of India. While direct taxes are levied on the incomes of individual assesses and corporate entities, (e.g., income tax, corporation tax, dividend distribution tax, wealth tax, land revenue, professional tax, etc.), indirect taxes are leviable on the sale or supply of goods and services (e.g., Goods and Services Tax or GST, basic customs duty, excise duty, etc.). As a common practice, the state governments delegate certain fiscal powers to the local authorities or bodies to levy and collect some taxes such as property tax, octroi taxes, market taxes, and taxes on utility services such as water supply, drainage, etc. With respect to direct taxes, it is noteworthy that both the impact and the incidence of taxation fall on the taxpayer. In the case of indirect taxes, the immediate impact of taxes falls on the taxpayer; however, the final burden of taxes is transferred to the ultimate consumers.