Budget Terminology
Cess
This is an additional levy on the basic tax liability. Governments resort to cesses for meeting specific expenditure. For instance, both corporate and individual income is at present subject to an education cess of 2%.
Posted On June 30th, 2009Direct tax
Traditionally, these are taxes where the burden of tax falls on the person on whom it is levied. These are largely taxes on income or wealth. Income tax (on corporates and individuals), FBT, STT and BCTT are direct taxes.
Posted On July 2nd, 2009Excise duties
Levied on items manufactured within the country and are paid by the manufacturer.
Posted On July 2nd, 2009FDI
Investments of a company incorporated outside India either through a branch or a representative office or through a subsidiary company set up in India.
Posted On July 2nd, 2009Fringe Benefit Tax
The taxation of perquisites or fringe benefits provided by an employer to his employees, in addition to the cash salary or wages paid, is fringe benefit tax. It was introduced in the 2005-06 budget. The government felt that many companies were disguising perquisites such as club facilities as ordinary business expenses, which escaped taxation altogether. Employers have to now pay a tax (FBT) on a percentage of the expense incurred on such perquisites.
Posted On June 30th, 2009Gross Domestic Product (GDP)
The total of market value of the finished goods and services produced in the country in a given year. It is made of three sectors Agriculture, Industry & Services.
Posted On July 2nd, 2009Gross National Product (GNP)
The total market value of the finished goods and services produced in the country in a given year, plus the income of domestic residents from investments made abroad, minus the income earned by foreigners abroad from the domestic market.
Posted On July 2nd, 2009Inflation
Inflation is a rise in the general level of prices of goods and services in an economy over a period of time. India uses the Wholesale Price Index (WPI) to calculate and then decide the inflation rate in the economy.
Posted On June 30th, 2009Service tax
It is a tax on services rendered. Telephone bill, for instance, attracts a service tax. While on taxes, let us take a look at an important classification: direct tax and indirect tax, which finds wide mention in the budget.
Posted On July 2nd, 2009Wholesale Price Index
WPI is the index that is used to measure the change in the average price level of goods traded in wholesale market. In India, a total of 435 commodities data on price level is tracked through WPI which is an indicator of movement in prices of commodities in all trade and transactions
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