Decoding the taxes
For most people, Union Budget is about taxes. So it won’t be worthwhile waiting for Budget or watching it live unless you know what taxes does the Budget deal with and how they may affect you directly or indirectly.

Indirect Taxes
In the case of indirect taxes, the tax incidence is not directly on the person or entity who pays the tax. These are levies on expenditures and include customs, excise and service tax. India’s Union Budget no longer deals with indirect taxes, as they have since been bracketed under the goods and services tax (GST), whose size and applicability are decided by a designated panel.

Direct Taxes
These are the taxes where the burden of tax falls directly on the person or entity on whom they are levied. These are largely levies on income or wealth. Income-tax on corporates and individuals, FBT, LTCG, STT and BCTT come under this.

Capital gains tax
This is levied on profit from the sale of any asset (shares, property). Depending on the time for which the asset is held, such profits and losses it is categorised as long-term or short-term capital gain and taxed accordingly. In Budget 2018-19, the government brought back long-term capital gains (LTCG) tax on profits from equity held for more than a year. However, it is levied only when such profits exceed Rs 1 lakh. In the case of real estate, LTCG is levied on assets held for more than two years.

Customs duty
These are taxes imposed on imports, which are under the purview of the Budget. While revenue is an important consideration, customs duties are often levied also to protect the domestic industry or sector (agriculture, for one) or in retaliation against measures by other countries.

Fringe benefit tax (FBT)
The levy of perquisites - or fringe benefits - provided by an employer to his employees, in addition to the cash salary or wages paid, is called fringe benefit tax. It was introduced in Budget 2005-06, when the government felt many companies were disguising perquisites such as club facilities as ordinary business expenses, which escaped taxation altogether. This levy has since been done away with.

Securities transaction tax (STT)
It is a kind of turnover tax where the investor has to pay a small tax on the total consideration paid/received in a share transaction. It was introduced in Budget 2004-05 after the government abolished long-term capital gains tax on shares, which was later bought back.

Banking cash transaction tax (BCTT)
First introduced in Budget 2005-06, BCTT is a small tax on cash withdrawals from bank exceeding a particular amount in a single day. The basic idea behind this levy was to curb black economy and generate a record of big cash transactions. This was later done away with. But there are reports that the government may reimpose it on cash withdrawals exceeding Rs 10 lakh in a year.

Corporate Tax
Also called corporation tax or company tax, it is levied on the net income or profit of companies. Net income is the total amount left after the company has made various expenses, including administrative expenses, from its revenue and accounted for depreciation.

Union Excise Duty
This is a levy imposed on goods manufactured in India. Technically, it does not exist anymore following GST implementation, but it is still levied on a few items such as liquor, tobacco and petroleum. When someone talks about ‘sin tax,’ they refer to this levy on unhealthy goods like liquor and tobacco.