Budget Decoded | Must-read explainers before you hear FM Sitharaman's speech

It is a direct tax on the net income or profit of a company based on its global earnings, in case of companies who have operations in India, and is levied on the income received in India or that accrues in India in case of non-residing companies.

. Customs duty is the tax that is levied on imports and exports of goods. This is used by the government to raise revenues, regulate movement of goods and safeguard domestic industries.

. Cess is not a long-term source of revenue for the government, and it is phased out after the goal for which it was imposed is met. It can be applied to indirect as well as direct taxes.

. The government borrows through the issue of government securities called G-secs and Treasury Bills. It is a loan taken by the government that falls under capital receipts in the Budget document. Whenever the tax and non-tax revenue falls short to finance the government's spending, the government announces an annual borrowing programme in the Budget every year.

. Fiscal policy is an estimate of taxes that are to be levied and also the expenditure that the government will make to run the economy of the country. Fiscal policy can be either expansionary or contractionary.

. Surcharge is an additional charge levied on tax. It is levied on the tax payable and not on the income generated. For example, if your income is Rs 300, to which the tax is 20 per cent, and the surcharge is 15 per cent then the total tax burden of an individual would be 35 per cent. Read more

. Disinvestment or divestment is defined as the government's action of selling or liquidating its stake in a public sector unit asset or subsidiary.

This is done when PSUs start turning into liabilities and start showing a negative rate of return, in turn pressuring government resources. In such cases, disinvestment helps bring down the financial burden being imposed by inefficient PSUs on the public finances, raise money and put the proceeds to better use.

. Indirect taxes are imposed on goods and services. They are paid by consumers indirectly at the time of buying goods and services. Tax levied on the seller of goods and service providers but often gets passed on to the end consumer and hence the consumer bears the tax. An indirect tax is levied at the same rate for everyone irrespective of their income. Service tax, excise duty, entertainment tax, customs duty, securities transactions tax, stamp duty are some of the widely applied indirect taxes.

. Direct taxes are the one that falls directly on individuals and corporations. For example, income tax, corporation tax, wealth tax. Unlike indirect tax, it has the same incidence and impact.

. The Narendra Modi government is set to present the Union Budget for FY23 amid a raging third wave of Covid-19. All eyes will be on Finance Minister Nirmala Sitharaman as she presents the country's fiscal plan for the coming year amid a shaky recovery from the pandemic, further threatened by a fresh surge in infections.

Budget Decoded | Must-read explainers before you hear FM Sitharaman's speech

Budget 2022 | What is Corporate Tax?

Budget 2022 | What is Customs Duty?

Budget 2022 | What is Cess?

Budget 2022 | From whom does the government borrow?

Budget 2022 | What is Fiscal Policy?

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