Taxation in India funds government expenditure, resource redistribution, behavioral incentives. Direct taxes: Income tax (individuals, corporate), Wealth tax (largely abolished), Securities transaction tax, TDS (Tax Deducted at Source). Indirect taxes: Goods and Services Tax (GST, unified 2017), Excise taxes, Customs duties, Stamp duty. GST structure: Multiple rates (0%, 5%, 12%, 18%, 28%), Consumption-based (collected at each stage), Input tax credit (reduces cascading), Central and state shares. Income tax: Progressive structure (higher incomes pay higher rates), Exemptions (agriculture income, retirement funds), Deductions (investments, donations). Corporate tax: Flat rate (recently reduced to 25.17%), Incentives for R&D, Manufacturing, Green energy. Tax base: Limited by informal economy, Low compliance, Tax evasion, Avoidance schemes. Tax buoyancy: Relationship between growth and tax revenue; improved post-GST. Collection: Central Board of Direct Taxes (CBDT), Central Board of Indirect Taxes (CBIT), State revenue departments. Challenges: Informal economy evasion, High compliance costs, Tax disputes, Regional disparities. Recent reforms: Reduced corporate rates, GST simplification, Faceless assessment, Digital payments tracking. ICAI focus: Tax classification, progressivity, recent reforms. Exam tip: GST unified indirect taxation; remember it's consumption-based with input credits allowing chain of relief.