If income Tax Already paid, Why you need to pay other taxes? How?

The taxes are of two type.

What you are paying are direct taxes. the government can not solely rely on direct taxes to collect the resources. Moreover higher taxes of a singular type will cause widespread tax evasion. So the government has to levy indirect taxes like Service tax, excise, VAT etc.

So the collection of various taxes ensures that the burden of a particular tax does not fall on selected types of people and is broad-based like excise/service tax which all of us bear in as the component of the cost of goods which we buy or consume.

Taxes in India are based on aspect theory.

Consider this example. You booked a flat in a project wherein the construction is in progress. The taxes applicable in this case are

1) VAT – For goods being sold to you ie steel, cement, sand etc forming part of construction material

2) SERVICE TAX – For service being rendered to you ie labor involved in the construction

3) INCOME TAX – Developer needs to pay taxes on profit earned by him from the sale of apartments

4) STAMP DUTY – On registration of this property.

These are apart from labor licenses, various cess and other like taxes which government collects.

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