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5 Types of Taxes imposed by government recently

types of taxes

Get up early, work late, and pay more taxes it is a reality of Indian middle-class people. Indian people are born to pay taxes. It is injected in our DNA that “Taxes are paid nation is made”. Ever since you start earning money you have to get ready to pay taxes. Whatever you do you need to pay tax. If you are not ready to pay tax you have to invest money for saving taxes.

You might be surprise note that government ask us to pay tax via 20 different manners. It seems that these 20 taxes were not enough for us the government has recently introduced 5 more taxes. In this article, I will provide you brief information about 5 Types of Taxes imposed by the government recently.

5 Types of Taxes imposed by government recently

Krishi Kalyan Cess

In budget 2016 finance minister has introduced new tax namely Krishi Kalyan Cess. This cess is introduced in order to extend help to the farmers. The effective rate of Krishi Kalyan Cess is 0.5%. This tax will be imposed on all taxable services. Krishi Kalyan Cess would come in force with effect from June, 1, 2016. Once this cess is applied we need to pay service tax @ 15%.

It is said that Krishi Kalyan Cess is a small contribution for improving the lives of farmers. However as per me, it is another way of increasing taxes by playing with emotions of the taxpayer on the name of farmers 🙁 Who knows that money collected as Krishi Kalyan Cess will be used for the welfare of farmer or not?

Also Read –20 Tax Free Incomes in India

Swachh Bharat Cess

Cleanliness is a top priority of country now. In order to clean India, the government need money which is collected from our pocket as Swachh Bharat Cess. Swachh Bharat Tax was imposed on 15thNovemeber, 2015. The effective rate of Swachh Bharat Cess is 0.5%. This tax is imposed on all taxable services.

To keep the country clean is responsibility of every citizen and one should clean their pocket first by paying Swachh Bharat Cess 🙂 The money collected from our pocket will be used for financing and promoting Swachh Bharat initiatives.

Dividend Distribution Tax

In budget 2016 finance minister has introduced a new tax on the dividend amount. It is proposed that 10% additional tax will be imposed on dividend income above 10 Lac from 1st April 2016 onwards.

This new tax will mainly hurt promotors and big investors of the stock market. The government is likely to generate big income from this tax. In order to beat budget changes many companies are in hurry to declare interim dividend.

Infrastructure Cess 

A Car is not a luxury it is the necessary thing today. Although we know this fact we need to pay an extra tax called as Infrastructure cess on the purchase of car now onwards. This is due to new Infrastructure cess on car and utility vehicle imposed recently.

1% infrastructure cess is applicable on petrol/LPG/CNG-driven motor vehicles of length not exceeding 4 meters and engine capacity not exceeding 1200cc. 2.5% cess on diesel motor vehicles of length not exceeding 4 meters and engine capacity not exceeding 1500cc and 4% cess is applicable on big sedans and SUVs.

Also Read – Tax Saving and Tax Planning at Last Minute

Entry Tax

In India ecommerce industry is booming. Everyone today wants to buy things online. It is mainly due to ease of buying and less cost. Online shopping is going to be costly due to Entry Tax. State government has recently imposed new tax called as Entry tax on online shopping products.  All items entering in the state boundaries ordered via E-commerce are under this tax boundary.

This entry tax is imposed by Gujarat, Madhya Pradesh, Assam, Delhi and Uttarakhand state government recently. The tax rate is variable 5.5-10% depending upon the state. Soon all e-commerce company will pass on this tax to us and we have to bear an additional cost of this tax.

At the end I would like to say that although government has taken initiative to remove the tax on EPF which was recently imposed, but what about other 25 taxes which Indian people are paying every now and then.

If I take example of Indian salary class person, he/she is spending 50% of his/her work life for the Taxes. Let me explain.

  • 30% of your Salary goes to government (Income tax – For tax payer in 30% slab) 🙁
  • In short 30% of your time at work you spend for the government. – Income tax
  • If you are getting promotion you are going to give more money to government – Taxes. 🙁
  • As you cannot live without services. You are spending average 15% of your time for the service tax. This includes education for other, cleanliness of country and farmer welfare.
  • You cannot live without purchasing things and you need to pay 5% VAT/sales tax for purchasing any items. So, 5% of your time you are spending for the VAT/Sales tax.

Conclusion is 50% of your time you are working to pay taxes and remaining 50% for your family. I can say we have 50% partnership with the government.

Shitanshu Kapadia
Shitanshu Kapadia
Hi, I am Shitanshu founder of moneyexcel.com. I am engaged in blogging & Digital Marketing for 10 years. The purpose of this blog is to share my experience, knowledge and help people in managing money. Please note that the views expressed on this Blog are clarifications meant for reference and guidance of the readers to explore further on the topics. These should not be construed as investment , tax, financial advice or legal opinion. Please consult a qualified financial planner and do your own due diligence before making any investment decision.