A tax (also known as a "duty") is a financial charge or other levy imposed on an individual or a legal entity by a state

or a functional equivalent of a state (e.g. tribes, secessionist movements or revolutionary movements). Taxes could also
be imposed by a subnational entity.

Taxes consist of direct tax or indirect tax, and may be paid in money or as corvée labor. In modern, capitalist taxation
systems, taxes are levied in money, but in-kind and corvée taxation are characteristic of traditional or pre-capitalist
states and their functional equivalents.

Taxes are usually collected by a governmental agency such as the Internal Revenue Service in the United States or HM
Revenue and Customs (HMRC) in the UK. When taxes are not paid to a government's satisfaction, civil penalties such
as fines or forfeiture are carried out against the non-paying entity or individual. These penalties could also have
criminal penalties such as imprisonment enforced by governmental investigators, such as the Federal Bureau of
Investigation and the Department of Justice in the US. In most modern industrialized countries, when an individual
fails to pay his government the taxes, it will ultimately result in the loss of money and maybe even imprisonment if
fraud is a serious factor.

The means of taxation, and the uses to which the funds raised through taxation should be put, are a matter of hot
dispute in politics and economics, so discussions of taxation are frequently tendentious.

Public finance is the field of political science / economics that deals with taxation.

Purposes and effects of taxation

Funds provided by taxation have been used by states and their functional equivalents throughout history to carry out the
functions such as:

• enforcement of law and public order,

• protection of property,
• economic infrastructure — roads, legal tender, enforcement of contracts, etc.,
• public works,
• social engineering,
• the operation of government itself.

Most modern governments also use taxes to fund welfare and public services, such as:

• education systems,
• health care systems,
• pensions for the elderly,
• unemployment benefits
• energy, water and waste management systems,
• public transportation.

Colonial states and moderning states have also used cash taxes to draw or force reluctant subsistence producers into
cash economies.

Governments use different kinds of taxes and vary the tax rates:

• to distribute the tax burden between individuals or classes of the population involved in taxable activities, such
as business,
• to redistribute resources between individuals or classes in the population. Historically, the nobility were
supported by taxes on the poor; modern social security systems are intended to support the poor, the disabled or
the retired by taxes on those who are still working,
• to fund foreign aid and military aid,
 • to influence the macroeconomic performance of the economy (the government's strategy for doing this is called
its fiscal policy) (see also tax exemption),
• to modify patterns of consumption or employment within an economy, by making some classes of transaction
more or less attractive.

The resource taken from the public through taxation is always somewhat greater than the amount which can be used by
the government. The difference is called compliance cost, and includes for example the labour cost and other expenses
incurred in complying with tax laws and rules.

The collection of a tax in order to spend it on a specified purpose, for example collecting a tax on alcohol to pay
directly for alcoholism rehabilitation centres, is called hypothecation. This practice is often disliked by finance
ministers, since it reduces their freedom of action. Some economic theorists consider the concept to be intellectually
dishonest since in reality money is fungible. Furthermore, it often happens that taxes or excises initially levied to fund
some specific government programs are then later diverted to the government general fund. In some cases, such taxes
are collected in fundamentally inefficient ways, for example highway tolls.

Some economists, especially neo-classical economists argue that all taxation creates market distortion and results in
economic inefficiency. They have therefore sought to identify the kind of tax system that would minimise this
distortion. Economists have known for centuries that the most economically neutral tax is a tax on land because land is
in fixed supply: taxes on personal income, retail sales, etc. will reduce the amount of those activities, but a tax on land
cannot reduce the amount of land. Also, one of every government's most fundamental duties is to administer possession
and use of land in the geographic area over which it is sovereign, and it is considered economically efficient for
government to recover for public purposes the additional value it creates by providing this unique service.

Since governments also resolve commercial disputes, especially in countries with common law, similar arguments are
sometimes used to justify a sales tax or value added tax. Others (e.g. libertarians) argue that most or all forms of taxes
are immoral due to their involuntary (and therefore eventually coercive/violent) nature. The most extreme anti-tax view
is anarcho-capitalism, in which the provision of all social services should be a matter of voluntary private contracts.

[edit] Tax rates

Taxes are most often levied as a percentage, called the tax rate, of a certain value, the tax base (how much income and
assets one has, earns, spends, inherits, etcetera). An ad valorem tax is one where the tax base is the value of a good,
service, or property. Sales taxes, tariffs, property taxes, inheritance taxes, and value added taxes are different types of
ad valorem tax. An ad valorem tax is typically imposed at the time of a transaction (sales tax or value added tax (VAT))
but it may be imposed on an annual basis (property tax) or in connection with another significant event (inheritance tax
or tariffs). An alternative to ad valorem taxation is an excise tax, where the tax base is the quantity of something,
regardless of its price: for example, in the United Kingdom, a tax is collected on the sale of alcoholic drinks that is
calculated by volume and beverage type rather than the price of the drink.

An important distinction when talking about tax rates is to distinguish between the marginal rate and the average rate.
The average rate is the total tax paid divided by the total amount the tax is paid on, while the marginal rate is the rate
paid on the next dollar of income earned. In a “progressive” tax system, these can be very different. For example, if
income is taxed on a formula of 5% from $0 up to $49,999, 10% from $50,000 to $99,999, and 15% over $100,000, a
taxpayer with income of $175,000 would pay a total of $18,750:

((0.05*50,000) + (0.10*50,000) + (0.15*75,000))

=18,750

His average rate would be 10.7%:

(18,750/175,000)
= 0.107
However, his marginal rate would be 15%.

[edit] Income Tax

Income tax is a tax on earnings – money that individuals, corporations, trusts or other legal entities receive in different
ways and from different sources.

The 'tax net' refers to what types of money payments are charged the tax. Generally, tax will be charged on personal
earnings (wages), capital gains, and business income. The rates for different types of income may vary and some may
not be taxed at all. Capital gains may be taxed when realised (e.g. when shares are sold) or when incurred (e.g. when
shares appreciate in value). Business income may only be taxed if it is ‘significant’ or based on the manner in which it
is paid. Some types of income, such as interest on bank savings, may be considered as personal earnings (similar to
wages) or as a realised property gain (similar to selling shares). In some tax systems ‘personal earnings’ may be strictly
defined to require that labour, skill, or investment was required (e.g. wages); in others they may be defined broadly to
include windfalls (e.g. gambling wins).

Tax rates may be progressive or flat. A progressive tax taxes differentially based on how much has been earned. For
example, the first $10,000 in earnings may be taxed at 5%, the next $10,000 at 10%, and any more income at 20%.
Alternatively, a flat tax taxes all earnings at the same rate. A tax system may use both progressive and flat taxes for
different types of income.

Often income tax systems will have deductions available. Deductions lessen the total tax liability by reducing total
taxable income. Income tax systems may allow losses from one type of income to be counted against another. For
example, a loss on the stock market may be deducted against taxable wages. Other tax systems may isolate the loss,
such that business losses can only be deducted against business tax, by carrying forward the loss to later tax years.

Income tax is often collected on a pay-as-you-earn basis, with small corrections made soon after the end of the tax year.
These corrections take one of two forms: payments to the government, for taxpayers who have not paid enough during
the tax year; and tax refunds from the government for those who have overpaid

Sales tax
Main article: Sales tax

Sales taxes are a form of excise levied when a commodity is sold to its final consumer. Retail organizations contend
that such taxes discourage retail sales. The question of whether they are generally progressive or regressive is a subject
of much current debate. People with higher incomes spend a lower proportion of them, so a flat-rate sales tax will tend
to be regressive. It is therefore common to exempt food, utilities and other necessities from sales taxes, since poor
people spend a higher proportion of their incomes on these commodities, so such exemptions would make the tax more
progressive. This is the classic "You pay for what you spend" tax, as only those who spend money on non-exempt (i.e.
luxury) items pay the tax.

A small number of US states rely entirely on sales taxes for state revenue, as those states do not levy a state income tax.
Such states tend to have a moderate to large amount of tourism or inter-state travel that occurs within their borders,
allowing the state to benefit from taxes from people the state would otherwise not tax. In this way, the state is able to
reduce the tax burden on its citizens.

The US states that do not levy a state income tax are Alaska, Florida, Nevada, South Dakota, Texas, Washington state,
and Wyoming. Additionally, New Hampshire and Tennessee only levy state income taxes on dividends and interest
income. Of the above states, only Alaska and New Hampshire do not levy a state sales tax. Additional information can
be obtained at the Federation of Tax Administrators website.

In the United States, there is a growing movement for the replacement of all federal payroll and income taxes (both
corporate and personal) with a national retail sales tax and monthly tax rebate to households of citizens and legal
resident aliens. The tax proposal is named FairTax. In Canada the federal sales tax is called the Goods and Services tax
(GST) and now stands at 6%. All provinces except Alberta also have a provincial sales tax. Most businesses can claim
back the taxes they pay and so effectively it is the final consumer who pays the tax.

• 6 Types of taxes
o 6.1 OECD classification of taxes
o 6.2 Income Tax
o 6.3 Retirement tax
o 6.4 Capital gains tax
o 6.5 Corporation tax
o 6.6 Poll tax
o 6.7 Excises
 6.7.1 Purposes and effects of excises
o 6.8 Sales tax
o 6.9 Tariffs
o 6.10 Toll Tax
o 6.11 Use taxes
o 6.12 Value added tax
 6.12.1 Input versus Output Tax
o 6.13 Property taxes
o 6.14 Transfer taxes
o 6.15 Inheritance tax
o 6.16 Wealth (net worth) tax
o 6.17 Personal property tax

Principal Taxes in India

The principal taxes are as follows.
1. Taxes on income:
a. Income tax:
b. Agricultural income tax (levied only by states);
c. Interest tax (applicable to banking and financial companies).
2. Taxes on transactions:
a. Local sales tax (levied only by states);
b. Central sales tax;
c. Excise duty;
d. Customs duty;
e. Stamp duty;
f. Gift tax;
g. Expenditure tax.
3. Taxes on property:
Wealth tax;
Property tax.
Direct and indirect taxation
Main articles: Direct tax and Indirect tax

Taxes are sometimes referred to as direct tax or indirect tax. The meaning of these terms can vary in different contexts,
which can sometimes lead to confusion. In economics, direct taxes refer to those taxes that are collected from the
people or organizations on whom they are ostensibly imposed. For example, income taxes are collected from the person
who earns the income. By contrast, indirect taxes are collected from someone other than the person ostensibly
responsible for paying the taxes.

The person or other entity from whom a tax is collected (i.e., the nominal "taxpayer") is a matter of law. However, who
"pays" the tax (in the sense of who bears the ultimate economic burden of the tax) is determined by the market place
and is found by comparing the price of the good (including tax) after the tax is imposed to the price of the good before
the tax was imposed. For example, suppose the price of gas in the U.S., without taxes, were $2.00 per gallon. Suppose
the U.S. government imposes a tax of $0.50 per gallon on the gas. Forces of demand and supply will determine how
that $0.50 tax burden is distributed among the buyers and sellers. For example, it is possible that the price of gas, after
the tax, might be $2.40. In such a case, buyers would be paying $0.40 of the tax while the sellers would be paying
$0.10 of the tax.

In law, the terms may have different meanings. In US constitutional law, for instance, direct taxes refer to poll taxes
and property taxes, which are based on simple existence or ownership. Indirect taxes are imposed on rights, privileges,
and activities. Thus, a tax on the sale of property would be considered an indirect tax, whereas the tax on simply
owning the property itself would be a direct tax.

The distinction can be subtle, but it is important under US law. Until 1913 the United States Constitution required that
all direct taxes be apportioned according to population. That is, if one state had twice the population of another state,
then the direct tax revenue from that state had to be exactly twice that from the other state. In 1895, the US Supreme
Court interpreted the income tax as a direct tax when applied to income from property, and struck down the tax as a
result. (The ruling did not affect the status of income taxes on income from personal services, which continued to be
classified as an excise, or indirect tax, not required to be apportioned. However, the Court ruled the entire income tax
law invalid, including the tax on income from personal services, reasoning that Congress had not anticipated that only
part of that particular law would be deemed enforceable.)

The federal government then had no income tax until the Sixteenth Amendment was ratified in 1913. The Sixteenth
Amendment removed the apportionment requirement for income taxes (whether considered direct or indirect).

The apportionment requirement under the U.S. Constitution remains for other direct taxes, such as taxes on property by
reason of ownership. Because there is no such national property tax under U.S. law, however, this legal restriction is
not fiscally or politically significant

A surcharge may mean:

• an extra fee added onto another fee or

charge
• an overprint that affects the value of a
postage stamp
Salary

A salary is a form of periodic payment from an employer to an employee, which is specified in an employment
contract.

From the point of view of running a business, salary can also be viewed as the cost of acquiring human resources for
running operations, and is then termed personnel expense or salary expense. In accounting, salaries are recorded in
payroll accounts.

Gross income is commonly defined as the amount of a company's or a person's income before all deductions or any
taxpayer’s income, except that which is specifically excluded by the Internal Revenue Code, before taking deductions
or taxes into account. For a business, this amount is pre-tax net sales less cost of sales

TAX RULES
• The tax in India on an individual's income is progressive. For the financial year 2005-2006, an individual's
income is taxed progressively at 10% - 30%. A 10% surcharge is imposed on the tax, subject to legally
specified limits and an education tax (CESS) of 2%.
• A limited company in India is liable for tax in the financial year 2005-2006 at the rate of 30% for a local
company and 40% for a foreign company with the addition of a 10% surcharge as well as an education tax
(CESS) of 2%. The effective tax rate in India is 33.66% for a local company and 41.82% for a foreign
company.
• Companies in India that are liable for tax of 7.5% on book profits as defined in Indian law, pay a 7.5% tax
on the "book profits" with a surcharge of 10%, and cess of 2%.
• In the Indian budjet for 2006, tax rates remain unchanged.

Capital Gains
Capital gains in India are divided into 2 groups, long term capital gains and short term capital gain.

• Long term capital gains relate to the sale of an asset that has been held for 3 years or longer (on the sale
of negotiable securities on the Indian Stock Exchange, shares that have been held for over a year).
When the asset has been held for a shorter period than that defined as long term, the capital gain is
deemed to be a short term gain.
• The long term tax rate is 20%, and, for purposes of calculation, the cost is adjusted to the increase in the
Index and deducted from the proceeds.
• Capital gains from the sale of long term negotiable securities on the Indian Stock Exchange are tax exemt.
• A short term capital gain is added to regular income. At the same time a capital gains on the sale of
negotiable securities on the Stock Exchange is taxed at 10%.

Table of Income Tax Rates in India for an Individual in (financial year 2005-2006)

Tax % Income (INR)

0% 1 - 100,000
10% 100,001 - 150,000
20% 150,001-250,000
30% 250,001 and above
 • A 10% "surcharge" is applicable to income in excess of INR 1,000,000 for 2005-2006.
• There is an "education tax" (CESS) of 2% so that the maximum effective tax is 33.66%.

Overseas Income

• An individual and company who are Indian residents are also taxed on their income outside India and
receive a credit for overseas taxes
• Qualification for residence for an individual:
residence in India of at least 182 days in the tax year,
or: residence in India at least 60 days in the tax year and at least 365 days in the 4 previous years.
• An Indian resident is also taxed on his income overseas.

Reporting Dates and Payment

• The tax year in India begins on April 1 and ends on March 31.
• An individual whose income is from a business must submit an annual return by October 31. There is a fine
of 10% of the tax payable for each month's delay.
• An individual whose income is from a wage or whose income is subject to a deduction of tax at source, is
exempt from submitting an annual return.
• An advance payment must be made on 3 dates - September 15, December 15 and March 15.
• There is an official body in India that deals with the subject of pre-ruling in connection with tax problems
that are presented for discussion.

DEDUCTION OF TAX AT SOURCE

Taxation of Employees

• An employer is obligated to deduct tax at source on a monthly basis from a salaried employee and to
make additional contributions to a provident fund and insurance.
• The employer's contribution to national insurance in India for an insurance plan is 4.75% of the salary. The
employee's contribution is 1.75% of his salary.
• The Indian employer's contribution to provident fund is 10-12%.

Other deductions
The following payments are subject, in India, to a deduction of tax at source:

• Dividend - 0%.
• Interest - 20%.
• Royalties - 10%.
PAN
1. What Is PAN?

Permanent Account Number (PAN) is a ten-digit alphanumeric number, issued in the form of a laminated card, by the
Income Tax Department.

A typical PAN is AABPS1205E.

{Section 139A(7) Expln (b) and (c)}

2. Why Is It Necessary To Have PAN?

It is mandatory to quote PAN on return of income, all correspondence with any income tax authority. From 1 January
2005 it will be mandatory to quote PAN on challans for any payments due to Income Tax Department.

{Section 139A (5) (a) and (b)}

It is also compulsory to quote PAN in all documents pertaining to financial transactions notified from time-to-time by
the Central Board of Direct Taxes. Some such transactions are sale and purchase of immovable property or motor
vehicle or payments in cash, of amounts exceeding Rs. 25,000/-to hotels and restaurants or in connection with travel to
any foreign country. It is also mandatory to mention PAN for obtaining a telephone or cellular telephone connection.
Likewise, PAN has to be mentioned for making a time deposit exceeding Rs. 50,000/- with a Bank or Post Office or
depositing cash of Rs. 50,000/- or more in a Bank.

{Section 139A (5) (c) read with Rule 114B}

3. How does Income Tax Department ensure that PAN is quoted on transactions mentioned above?

It is statutory responsibility of a person receiving document relating to economic or financial transactions notified by
the CBDT to ensure that PAN has been duly quoted in the document.

{Section139A (6)}

4. Is it compulsory to quote PAN on return of income?

Yes, it is compulsory to quote PAN on return of income.

5. How will these authorities verify PAN?

A facility for verifying PAN is available on the website of the Income Tax department.

6. Who must have a PAN?

i. All existing assesses or taxpayers or persons who are required to furnish a return of income, even on behalf of others,
must obtain PAN.

{Section 139A (1) and (1A)}

ii. Any person, who intends to enter into financial transaction where quoting PAN is mandatory, must also obtain PAN.

{ Section 139A (5) (c) read with Rule 114B}

iii. The Assessing Officer may allot PAN to any person either on his own or on a specific request from such person.

{Section 139A (2) and (3)}

7. Can a person obtain or use more than one PAN?

Obtaining or possessing more than one PAN is against the law.

{Section 139A (7)}

8. Where to apply for PAN?

In order to improve PAN related services, the Income Tax department has authorized UTI Investor Services Ltd
(UTIISL) to set up and manage IT PAN Service Centers in all cities or towns where there is an Income Tax office and
National Securities Depository Limited (NSDL) to dispense PAN services from TIN Facilitation Centers. For
convenience of PAN applicants in big cities, UTIISL has set up more than one IT PAN Service Center and likewise
there are more than one TIN Facilitation Centers.

9. How to apply for a PAN? Can an application for PAN be made on plain paper?

PAN application should be made only on Form 49A. A PAN application (Form 49A) can be downloaded from the
website of Income Tax department or UTIISL or NSDL (www.incometaxindia.gov.in,www.utiisl.co.in or tin.nsdl.com)
or printed by local printers or photocopied (on A4 size 70 GSM paper) or obtained from any other source. The form is
also available at IT PAN Service centers and TIN Facilitation centers.

10. Can an application for PAN be made in Form 49A obtained from anywhere?

Yes, PAN application may be made on Form 49A obtained from any source other than IT PAN Service Centers or TIN
Facilitation Centers. For instance, a PAN application may be made on form downloaded from the website of Income
Tax department or UTIISL or NSDL; or on form printed by local printers or a photocopy of downloaded or printed
form.

11. Can an application for PAN be made through Internet?

Yes, application for fresh allotment of PAN can be made through Internet. Further, requests for changes or correction
in PAN data or request for new PAN card (for an existing PAN) may also be made through Internet. For more details
visit (www.tin-nsdl.com)

12. How do I get a PAN allotted quickly (TATKAL)?

If an application for allotment of PAN is submitted through Internet and payment made through a 'nominated' credit
card, the PAN is allotted on priority and communicated through email.

13. How to find an IT PAN Service Center or TIN Facilitation Center?

Location of IT PAN Service Centers or TIN Facilitation Centers in any city may be obtained from local Income Tax
Office or any office of UTI/UTIISL or NSDL in that city or from websites of the Income Tax department
(www.incometaxindia.gov.in or UTIISL(www.utiisl.co.in) or NSDL (http://tin.nsdl.com)
14. What services are provided by these IT PAN Service Centers or TIN Facilitation Centers?

IT PAN Service Centers or TIN Facilitation Centers will supply PAN application forms (Form 49A) and forms for
'Request For New PAN Card Or/ And Changes In PAN Data', assist the applicant in filling up the form, collect filled
form and issue acknowledgement slip. After obtaining PAN from the Income Tax department, UTIISL or NSDL as the
case may be, will print the PAN card and deliver it to the applicant.

15. What if I submit incomplete Form 49A?

IT PAN Service Centers or TIN Facilitation Centers shall not receive any incomplete and deficient PAN application.
However, these centers will assist applicants to correctly fill up form 49A or 'Request For New PAN Card Or/ And
Changes In PAN Data', as the case may be.

16. What documents and information have to be submitted along with the application for Form
49A?

a. Individual applicants will have to affix one recent, coloured photograph (Stamp Size: 3.5 cms x 2.5 cms) on Form
49A;

b. Any one document listed in Rule 114 must be supplied as proof of 'Identity' and 'Address'; and

c. Designation and code of the concerned Assessing Officer of Income Tax department will have to be mentioned in
Form 49A.

17. Which documents will serve as proof of 'Identity' in case of Individual applicants, including
minors and HUF applicants?

Copy of school leaving certificate or matriculation certificate or degree of a recognized educational institution or
depository account or credit card or bank account or water bill or ration card or property tax assessment order or
passport or voter identity card or driving license or certificate of identity signed by a MP or an MLA or a Municipal
Councilor or a Gazetted Officer;

In case the PAN applicant is a minor, any of above documents of any of the parents or guardian of such minor shall
serve as proof of Identity;

In case PAN application is made on behalf of a HUF, any of above documents in respect of Karta of the HUF will serve
as proof of Identity.

18. What is proof of 'Address' for Individual applicants, including minors and HUF applicants?

Copy of electricity bill or telephone bill or depository account or credit card or bank account or ration card or employer
certificate or passport or voter identity card or property tax assessment order or driving license or rent receipt or
certificate of address signed by a MP/ MLA/Municipal Councilor / a Gazetted Officer;

In case the PAN applicant is a minor, any of above documents of any of the parents or guardian of such minor shall
serve as proof of Address;

In case PAN application is made on behalf of a HUF, any of above documents in respect of Karta of the HUF will serve
as proof of Address.

19. What documents will serve as proof of Identity and Address for other applicants?

Copy of Certificate of Registration issued by the Registrar of Companies or Copy of Certificate of Registration issued
by the Registrar of Firms or Copy of Partnership Deed or Copy of Trust deed or Copy of Certificate of Registration
Number issued by Charity Commissioner or Copy of Agreement or Copy of Certificate of Registration Number issued
by Charity Commissioner or Registrar of Co-operative Society or any other Competent Authority or any other
document originating from any Central or State Government Department establishing Identity and Address of such
person.

20. How to find 'Assessing Officer code'?

Assessing Officer code may be obtained from Income Tax Office where you submit your return of income. Applicants
who have never filed return of income may find out Assessing Officer code with the help of IT PAN Service Center or
TIN Facilitation Center or jurisdictional Income Tax Office.

21. Is a photograph compulsory for making an application for PAN?

A photograph is compulsory only in case of 'Individual' applicants.

22. What is the procedure for applicants who cannot sign?

In such cases, Left Hand Thumb impression of the applicant should be affixed on Form 49A or 'Request For New PAN
Card Or/ And Changes In PAN Data' at the place meant for signatures and got attested by a Magistrate or a Notary
Public or a Gazetted Officer, under official seal and stamp.

23. Is father's name compulsory for female (including married/divorced/widow) applicants?

Only father's name is required to be filled in the PAN application (Form 49A). Female applicants, irrespective of
marital status, should write only father's name in the PAN application

24. Is it compulsory to mention telephone numbers on Form 49A?

Telephone number is not compulsory, but if provided it may help in faster communication.

25. Who can apply on behalf of non-resident, minor, lunatic, idiot, and court of wards?

Section 160 of IT Act, 1961 provides that a non-resident, a minor, lunatic, idiot, and court of wards and such other
persons may be represented through a Representative Assessee. In such cases, application for PAN will be made by the
Representative Assessee.

26. I had applied to the department but I do not know my PAN?

Please contact the Aaykar Sampark Kendra (ASK) at 0124-2438000 (or 95124-2438000 from NCR) or visit the
www.incometaxindia.gov.in and go to 'know your PAN'.

27. Are there any charges to be paid at IT PAN Service Centers or TIN Facilitation Centers?

UTIISL and NSDL have been authorized to collect Rs.60 + Service Tax as applicable, per PAN application and this
includes cost of a tamper proof PAN card. This amount will have to be paid in cash at IT PAN Service Center or the
TIN Facilitation Center.

28. Do you need to apply for a PAN when you move or transfer from one city to another?

Permanent Account Number (PAN), as the name suggests, is a permanent number and does not change during lifetime
of PAN holder. Changing the address or city, though, may change the Assessing Officer. Such changes must, therefore,
be intimated to nearest IT PAN Service Center or TIN Facilitation Center for required correction in PAN databases of
the Income Tax department. These requests will have to be made in a form for 'Request For New PAN Card Or/ And
Changes In PAN Data'

29. I had applied to UTITSL/ NSDL a month ago but I have not received my PAN card and I have to
file my return of income.

Please contact Aaykar Sampark Kendra (0124-2438000 or 95124-2438000 from NCR) or www.incometaxindia.gov.in
or send an email to pan@incometaxindia.gov.in.

30. Will the existing PAN cards issued by the Department remain valid?

All PAN allotted and PAN card issued by the Department will remain valid. All persons who have been allotted a PAN
need not apply again.

31. Income Tax Department has issued me a PAN card; can I obtain a new tamper proof PAN card?

For obtaining the tamper proof PAN card an application will have to be made in the form for 'Request For New PAN
Card Or/ And Changes In PAN Data' to IT PAN Service Center or TIN Facilitation Center, in which existing PAN will
have to be indicated and old PAN card surrendered. The payment of Rs.60 + Service Tax as applicable, will also have
to be made.

32. I had applied for PAN and received PAN number but have not received the PAN Card?

Apply in the form for 'Request For New PAN Card Or/ And Changes In PAN Data' at any IT PAN Service Center or
TIN Facilitation Center quoting the PAN allotted to you.

33. How will the new PAN card be delivered to me?

The UTIISL or NSDL, as the case may be, will ensure delivery of new PAN card at the address indicated by you in the
PAN application form or form for 'Request For New PAN Card Or/ And Changes In PAN Data'

34. I want to pay taxes today but I do not have a PAN?

It takes about 15 days to get a new PAN allotted. However, PAN can be obtained in around 5 days if application is
made through Internet and processing fee paid through credit card. It is advisable to initiate action for obtaining PAN
will in time

ASSESSMENT
Basically assessment is an estimation for an amount assessed while paying Income Tax. It is a compulsory contribution that is
required for the support of a government. It is generally of the following types.

Self assessment
The assessee is required to make a self assessment and pay the tax on the basis of the returns furnished. Any tax paid by the
assessee under self assessment is deemed to have been paid towards regular assessment.

Regular assessment
On the basis of thereturn of income chargeable to tax furnished by the assessee an intimation shall be sent to the assessee
informing him about the tax or interest payable or refundable to him.

Best judgement assessment

In a best judgement assessment the assessing officer should really base the assessment on his best judgement i.e. he must not
act dishonestly or vindictively or capriciously. There are two types of judgement assessment :
 1. Compulsory best judgement assessment made by the assessing officer in cases of non-co-operation on the part of the
assessee or when the assessee is in default as regards supplying informations.

2. Discretionary best judgement assessment is doen even in cases where the assessing officer is not satisfied about the
correctness or the completeness of the accounts of the assessee or where no method of accounting has been regularly
and consistently employed by the assessee

Income escaping assessment or re-assessment

If the assessing officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment
year assess or reassess such income and also nay other income chargeable to tax which has escaped assessment and which
comes to his notice in course of the proceedings or any other allowance, as the case may be.

Precautionary assessment
Where it is not clear as to who has received the income, the assessing officer can commence proceedings against the persons to
determine the question as to who is responsible to pay the tax

Roles and Duties

India has a well developed tax structure. The Constitution of India empowers the
legislature to enact and enforce tax laws. The taxes so collected are required to be divided
between the Central Government and the State Governments. The Central government
levies direct taxes such as personal income tax and corporate tax, and also indirect taxes
like customs duties, excise duties and central sales tax. The states in turn are empowered
to levy state sales tax, entertainment tax etc. apart from various other local taxes like
entry tax, octroi, etc.

In the wake of economic reforms, the tax system of our country has underwent significant
changes over the past six years. The tax rates have been rationalised and now compare
favourably with most other countries. Further, the tax laws have been simplified to ensure
better compliance.

At present, the Income Tax Department under the Department of Revenue in the Ministry
of Finance administers the following Tax Laws. (The Gift Tax Act and the Estate Duty Act
which were also administered by the Income Tax Department in earlier years have now
been repealed).

Nature of Tax Statute

Income tax Income-Tax Act, 1961
Wealth tax Wealth-Tax Act, 1957
Interest tax Interest-`Tax Act, 1974
Expenditure tax Expenditure-Tax Act, 1987

DUTIES OF THE DEPARTMENT

The role of Income Tax Deptt. is manifold. The Indian Revenue Service Officers are
responsible for administering fiscal laws like the Income Tax Act, Wealth Tax Act, Interest
Tax Act, Expenditure Tax Act, etc. The immediate object is to collect tax and to detect and
deter tax evasion. They also have a duty towards the tax paying public. They advise the
public of their rights and duties as part of creating an environment of mutual trust
between the deptartment and the public. The second role of the department is to help
achieve the socio-economic objectives of the government through planned tax legislation
and thus contribute to the implementation of the government's wider policies. The
department also negotiates and implements wide ranging Double Taxation Avoidance
Agreements
Poverty in India

In New Delhi, a woman wields a pickaxe on a footpath maintenance project while her husband rests and her baby
sleeps
Although recent positive economic developments have helped the Indian middle-class a lot, India still suffers from
substantial poverty. The National sample survey organisation (NSSO) estimated that 22.15% of the population was
living below the poverty line in 2004–2005, down from 51.3% in 1977–1978, and 25% in 2002[1]. The criterion used
was monthly consumption of goods below Rs. 211.30 for rural areas and Rs. 454.11 for urban areas. 75% of the poor
are in rural areas with most of them comprising daily wagers, self-employed households and landless labourers.

As of 2006, India's Human Development Index is 0.611, higher than that of nearby countries line Bangladesh (0.530)
and Pakistan (0.539), but lower than Vietnam (0.709) or China (0.768).

[edit] Causes of poverty in India

The major causes for poverty have been:

• high population growth rate,[citation needed]

• high Illiteracy (about 35% of population) [2]

• unemployment and under-employment,

[citation needed]

• protectionist policies pursued till 1991 that

prevented high foreign investment [3][4], and

• corruption in government and bureaucracy.

[citation needed]

After 1991: This post-economic reform period evidenced both progress and setbacks. Rural income poverty increased
from 34 per cent in 1989-90 to 43 per cent in 1992 and then fell to 37 per cent in 1993-94. Urban income poverty went
up from 33.4 per cent in 1989-90 to 33.7 per cent in 1992 and declined to 31 per cent in 1993-94 [5].

In summary, the NSS recorded poverty rates are:

Year Round Poverty Rate

1977-78 32 51.3

1983 38 45.65

1987-88 43 39.09
1993-94 50 37.27

1999-
55 26.09
2000

2004-
61 22.15
2005

[edit] History of attempts to alleviate poverty

Since the early 1950s, government has initiated, sustained, and refined various planning schemes to help the poor attain
self sufficiency in food production. Probably the most important initiative has been the supply of basic commodities,
particularly food at controlled prices, available throughout the country as poor spend about 80 percent of their income
on food.

Programmes like Food for work and National Rural Employment Programme have attempted to use the unemployed to
generate productive assets and build rural infrastructure.[4] Other anti poverty programs include Rural Landless
Employment Guarantee Programme.

The Rural Landless Employment Guarantee Programme was instituted in FY 1983 to address the plight of the hard-
core rural poor by expanding employment opportunities and building the rural infrastructure as a means of encouraging
rapid economic growth. There were many problems with the implementation of these and otherschemes, but observers
credit them with helping reduce poverty. To improve the effectiveness of the National Rural Employment Programme,
in 1989 it was combined with the Rural Landless Employment Guarantee Programme and renamed Jawahar Rozgar
Yojana, or Jawahar Employment Plan (see Development Programs, ch. 7).

In August 2005, the Indian Parliament passed the Rural Employment Guarantee Bill, the largest programme of this type
in terms of cost and coverage, which promises 100 days of minimum wage employment to every rural household, in
200 of India's 600 districts. The question of whether economic reforms have reduced poverty or not has fueled debates
without generating any clearcut answers, and has also put political pressure on further economic reforms, especially
those involving downsizing of labour and reduction of agricultural subsidies.[3][6]

[edit] Outlook for poverty alleviation

Eradication of poverty in India can only be a long-term goal. Poverty alleviation is expected to make better progress in
the next 50 years than in the past, as a trickle-down effect of the growing middle class. Increasing stress on education,
reservation of seats in government jobs and the increasing empowerment of women and the economically weaker
sections of society, are also expected to contribute to the alleviation of poverty. It is incorrect to say that all poverty
reduction programmes have failed. The growth of the middle class (which was virtually non-existent when India
became a free nation in August 1947) indicates that economic prosperity has indeed been very impressive in India, but
the distribution of wealth has been uneven.

[edit] Controversy over extent of poverty reduction

While overall poverty in India has declined, the extent of poverty reduction is often debated[7]. The Indian debate has
run parallel to, and is itself a large part of, the wider debate about globalization and poverty. The economic reforms of
the early 1990s were followed by rates of high economic growth. The effects on poverty remain controversial, and the
official numbers published by the Government of India, showing a reduction of poverty from 36% (1993–94) to 26%
(1999 – 00), to 22% (2004 - 05), have been challenged both for allegedly showing too little and too much poverty
reduction[8].

While there is a consensus on the fact that liberalization has led to a reduction of income poverty, the picture is not so
clear if one considers other non-pecuniary dimensions (such as health, education, crime and access to infrastructure).
With the rapid economic growth that India is experiencing, it is likely that a significant fraction of the rural population
will continue to migrate toward cities, making the issue of urban poverty more significant in the long run [9].

Economist Pravin Visaria has defended the validity of many of the statistics that demonstrated the reduction in overall
poverty in India, as well as the declaration made by India's Finance Minister Yashwant Sinha that poverty in India has
reduced significantly. He insisted that the 1999-2000 survey was well designed and supervised and felt that just
because they did not appear to fit preconceived notions about poverty in India, they should not be dismissed outright[10].
Nicholas Stern, vice president of the World Bank, has published defenses of the poverty reduction statistics. He argues
that increasing globalization and investment opportunities have contributed significantly to the reduction of poverty in
the country. India, together with China, have shown the clearest trends of globalization with the accelerated rise in per-
capita income[11]