By :- kunal S. lakhotia Class:- B.com 1st year [non-grant] College :- G.

S college of commerce & economics

What is TAX ?From were does it comes ? & what are its types ? source of revenue to the government . Compulsory contribution from a person to the expenses incurred by the state in common interest to all without reference to specific benefit conferred on any individual . types of tax :direct tax & indirect tax Direct Tax- Income Tax & Wealth Tax . Indirect Tax- Sales Tax , custom duty , excise duty , etc .

Tax structure in india !

Direct taxes in india :-

Direct taxes in india includes icome tax , wealth tax & gift tax . Income tax income tax is a tax entitled on the income of individual or entity . it was introduced in india at 1860 but discontinue in 1873 then again reintroduced in 1886 . Direct tax is always taken at the end of the year . Direct taxes are progressive in nature .

PROPOSED INCOME TAX SLABS

income Rate %

1.[general tax payers] Up to Rs. 1,60,000 Rs.1,60,001 - Rs.5,00,000 Rs.5,00,001 Rs.8,00,000 Rs.8,00,000 & above 2.[For women] Up to 1,90,000 Rs.1,90,001-Rs.5,00,000 Rs.5,00,001-Rs.8,00,000 Rs.800000 & above 3.[fro senior citizens of 65 years & above ] Up to Rs.2,40,000 Rs.2,40,001-Rs.5,00,000 Rs.5,00,000-Rs.8,00,000 Rs.8,00,000 & above

Nil 10% 20% 30% Nil 10% 20% 30%

Nil 10% 20% 30%

Surcharge and Cess

Surcharge A 10% surcharge (tax on tax) is applicable if the taxable income (taking into consideration all the deductions) is above Rs. 10 lakh. The limit of 10 lacs was increased to Rs. 1 crore (Rs. 10 million) with effect from 1st June 2007 for corporate assessees. Education Cess All taxes in India are subject to an education cess, which is 3% of the total tax payable.

Indirect Tax !

The indirect tax are those tax which are received by public [customers]

It

gets received by the consumption of commodity or services by the public [consumer] The tax burden can be transffered It is aggressive in nature . It mainly filed to Social consciousness . Its types are custom duties , excise

Rates of indirect taxes !

Custom duties - the highest rate of custom duties in 2003-04 was 20% . And it decried to 10% at 2007-08 in the impact of global financial meltdown since sep 2008 & due to this there in 2008-10 there has been taken an certain custom duties cut & exceptions also given. Excise duties It is charged as per the production of the commodity by the industry . It is received in a form of Modified value added tax [MODVAT] & Central value added tax [CENVAT] . The CENVAT was introduced in year 2000

Sales tax sales tax has been paid in two ways tax incurred by state and central government . The rate of tax by central government is 2% at present and state government rate of tax is different as per different state government it had been replaced by Value Added Tax [VAT] . VAT was introduced in 1999 and was implemented in April 2005 in some states . Service tax - it is an type of indirect tax imposed on services called taxable services . It was introduced in the year 1994-95 .and it was implemented from October 2005 . it covers more than 120 services in a year . The rate of sales tax was 5% in the year 2002-3

Use of taxes by government !

This taxes paid by us is used to pay the salary and expenses of government sector towards country . Salary i.e paying salary to government employees working in defense , law , government colleges , etc . Expenses i.e constructing roads , dams railway lines ,etc. Also it helps much in improvement in agriculture sector , health sector

Tax Penalties
Section 142 (1) and section 143 (2) of the Indian Income Tax act 1961 lays down certain regulations regarding tax penalties. The commissioner decides on the defaulters .