TAXATION SYSTEM IN INDIA

India has a well-developed tax structure with clearly demarcated authority between Central and State Governments and local bodies.

Central Government levies taxes on income (except tax on agricultural income, which the State Governments can levy), customs duties, central excise and service tax.

Value Added Tax (VAT), (Sales tax in states where VAT is not yet in force), stamp duty, state excise, land revenue and profession tax are levied by the State Governments.
In last 10-15 years, Indian taxation system has undergone tremendous reforms. The tax rates have been rationalized and tax laws have been simplified resulting in better compliance, ease of tax payment and better enforcement. The process of rationalization of tax administration is ongoing in India.
Since April 01, 2005, most of the State Governments in India have replaced sales tax with VAT.

Taxes Levied by Central Government
Direct Taxes
Tax on Corporate Income
Capital Gains Tax
Personal Income Tax
Tax Incentives
Double Taxation Avoidance Treaty
Indirect Taxes
Excise Duty
Customs Duty
Service Tax
Securities Transaction Tax

Taxes Levied by State Governments and Local Bodies
Sales Tax/VAT
Other Taxes

Useful Links:
India in Busines, ITP Div, Govt. Of India
IMF