India does not have one tax. It has a tax joint family that lives in every wallet, every invoice, every UPI ping, and every “congratulations, you sold a house.” Below is a field guide. Rates change with budgets and GST Council meetings; treat this as a map, not a CA certificate.
Direct taxes (the ones that look you in the eye)
1. Income tax
Tax on your total income after deductions/exemptions. Default new regime (FY 2026–27 style): nil up to ₹4 lakh, then 5 / 10 / 15 / 20 / 25 / 30% in ₹4-lakh steps, 30% above ₹24 lakh. Rebate under 87A can make tax nil around ₹12 lakh of taxable income (salaried people also get a standard deduction). Old regime still exists if you like itemised deductions more than simplicity.
2. Surcharge
A tax on the tax, for people whose income makes the slab chart blush. Typically 10% above ₹50 lakh, 15% above ₹1 crore, 25% above ₹2 crore; new regime caps the top surcharge at 25%. Special incomes (some capital gains, dividends) often have a lower surcharge cap.
3. Health & Education Cess
4% on (income tax + surcharge). The government calling it “health and education” does not mean you can deduct your gym or coaching class against it.
4–5. STCG and LTCG
Profit on selling assets. For listed equity / equity MFs with STT: STCG 20% (hold ≤12 months), LTCG 12.5% on gains above ₹1.25 lakha year (hold >12 months), no indexation. Property, gold, unlisted shares: different holding periods; LTCG often 12.5% without indexation (older property may still have an indexation choice). Debt-heavy “specified” funds are usually slab-rated. Plus cess/surcharge.
6. Tax on dividend income
Dividends are generally taxed in your hands at slab rates. Companies do not pay DDT anymore (that tax retired; you inherited the bill).
7. Tax on interest income
FD, savings (above exemption), bonds: usually slab rate. Some bonds/G-Secs have special rules.
8. Tax on rental income
House property: rent minus 30% standard deduction (and municipal taxes, interest rules). Vacant second homes still attract notional rent in many cases. The taxman has opinions about empty rooms.
9. Tax on business / professional income
Profits after allowable expenses, or presumptive schemes (44AD/ADA/AE) if you prefer “please don’t audit my chai bills.”
Market friction taxes (tiny cuts every time you blink at a ticker)
10. STT (Securities Transaction Tax)
A small levy on listed equity, F&O, etc., collected by the exchange. You pay it so that STCG/LTCG concessional rates can apply. It is not deductible from capital gains.
11. Stamp duty on securities
State stamp on share transfers / certain instruments. Invisible until you read the contract note and feel poorer by paisas.
GST family (one nation, many acronyms)
12. GST
Consumption tax on most goods and services. After GST 2.0 (from Sep 2025), the working story is simpler: lots of stuff at 5% or 18%, essentials nil, a 40% “sin/luxury” pocket for some items; older 12%/28% slabs were largely collapsed. Exact HSN still decides your fate.
13–16. CGST, SGST, UTGST, IGST
Same pizza, different boxes.
- Same state: half CGST + half SGST (or UTGST in a UT).
- Other state / import: full IGST.
Buyer still pays one rate; governments split the loot.
17. GST Compensation Cess
Extra cess on some “sin/luxury” goods (historically cars, tobacco, aerated drinks) to compensate states. Lives on in pockets of the tariff even after rate reshuffles.
Border and factory taxes
18–21. Customs: BCD, Social Welfare Surcharge, AIDC
Import tax stack. Basic Customs Duty + surcharge + Agriculture Infrastructure and Development Cess on specified goods. That “cheap from abroad” laptop was never cheap.
22–26. Central excise / SAED / additional excise / road cess / agri cess
Most goods moved to GST, but petroleum products, tobacco, etc. still host a reunion of excise + special additional excise + road & infrastructure cess. Fuel is where every cess goes to feel important.
27. State excise
States’ favourite child: liquor (and sometimes other intoxicants). Why the same whisky costs differently in Goa vs your home state.
Local and state “you live here” taxes
28–29. Property tax / municipal tax
Paid to the city for the privilege of existing on a plot and occasionally seeing a road get patched.
30. Professional tax
State/local levy on salaried/professionals. Small monthly bite, large emotional damage because it exists.
31–32. Vehicle / motor vehicle tax and road tax
One-time or periodic tax to register and keep a vehicle legal. Road tax and “we will still have potholes” are not legally linked.
33. Electricity duty
State add-on on your power bill. Units consumed × duty. The fan is running; so is the levy.
34–35. Stamp duty and registration charges
On property (and some other documents). Often the second-biggest cheque after the house itself. Stamp duty is the state’s cut; registration is the “please write it in the book” fee.
36. Land revenue / land tax
Older agrarian/urban land levy; still around in many states in some form.
37–39. Entertainment, luxury, betting/gambling levies
Many got swallowed by GST; some states still run extra levies on race, casino, lottery, or “luxury” stays. If it is fun, someone has a notification.
40–43. APMC levies, market cess, entry/LBT, local infrastructure cess
Mandi fees, municipal entry taxes (where not fully killed), city cesses. The tomato paid tax before you did.
44–46. Water cess, green/environmental cess, state fuel levies
Utility and environment add-ons; fuel also carries state VAT/cess on top of central excise. Your tank is a federal structure.
Collection machinery (not extra taxes, but they feel like it)
47. TDS
Payer cuts tax before money reaches you (salary, contractor, rent, interest, etc.). Advance tax with worse branding.
48. TCS
Seller collects tax on specified receipts (some goods, foreign remittance, luxury cars historically, etc.).
49. Equalisation levy
Digital/advertising levy in specified cases (scope has been rewritten over years). The internet is not a tax-free country.
50–52. DDT, wealth tax, gift tax
Abolished as standalone taxes. Dividends now taxed in shareholders’ hands; wealth tax is gone; gifts can still be income if they fail the relative/occasion exceptions.
UPI “MDR tax” — the one you asked to roast
MDR is not a government tax. It is a Merchant Discount Rate: a fee the merchant’s bank/ecosystem charges for accepting a card or UPI payment. NPCI/RBI set the rules; GST then taxes the fee.
From 15 October 2026, the UPI P2M (you-pay-a-shop) story is roughly:SituationChargeFriend-to-friend (P2P)Free. Love is still subsidised.Pay a shop ≤ ₹2,000Free. Samosa diplomacy continues.Small QR merchant up to ~₹1 lakh/month UPIStill free in the designed pocket.Normal shop payment > ₹2,0000.40%, cap ₹300 from ₹75,000 upwardRail / telecom / insurance / fuel / agri inputs / many utilities > ₹2,000Flat ₹5Mutual funds / securities / brokers0.02%, cap ₹300Can merchant add it to your bill?No. Rules say merchant eats it.GST on the MDR itself18% on the fee; registered merchants can often claim ITC.
Humorous translation: for years UPI was the national sport of “scan and vanish.” Banks and apps funded a free highway. From mid-October 2026, the highway introduces a toll only for bigger shop bills, paid by the shop, not by you scanning ₹87 for cutting chai. Your ₹10,000 furniture UPI costs the seller about ₹40 + GST on that ₹40. Your ₹1,000 grocery UPI still costs them nothing. If a cashier says “UPI extra 2%,” that is not MDR policy — that is entrepreneurship of the illegal kind.
So: MDR ≠ income tax ≠ GST on goods. It is a payment-rail service charge that attracts GST, the way parking attracts both a fee and a lecture.
One-line moral
Income tax takes a slice of what you earn. GST takes a slice of what you spend. Cess takes a slice of the slice. STT/stamp take a slice when you trade. Property/stamp take a slice when you settle down. Excise takes a slice when you drive or drink. And UPI MDR, from October 2026, takes a polite slice from the merchant when you spend more than two thousand rupees without touching cash — then GST takes a slice of that slice. India does not tax you once. It taxes you in seasons.
Not tax advice. A CA plus the latest Finance Act / GST notification will beat this essay in any assessment year.
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