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Agricultural Income.
Section 80-IB- Tax Holiday for setup of business in
backward areas.
Section 80G- Donations are tax exempted.
TAX EVASION
To reduce tax liability when accounts are interpreted
then it is Tax Evasion.
It is not only illegal but also immoral and antinational.
Under tax laws, tax evaders are penalized by heavy
duty.
MEANS OF TAX
EVASION
Falsification of Accounts.
Inflation of expenses.
Cautious violation of rules.
Excessive payment of salary.
Non-disclose of capital gain.
Assessment Year-:
The period of time in which the tax
liability is assessed and the payment of
Tax is made upon the income earned in
previous year is known as Assessment
Year
Previous Year-:
It is the year in which income is earned.
Financial Year-:
It is the year in which new tax laws are
prepared in the Finance Act are implemented.
ASSESSEE
A person whose tax liability is
assessed according to the
provision of law.
TYPES OF ASSESSEE
Sole proprietor
Hindu Undivided Family.
Partnership Firm
Company
SOLE
MERITS PROPRIETOR
Pay tax as per slab defined by Finance Act.
Deductions that can be claimed by individual.
Sec 80 CCC-: Contribution to Pension Fund.
Sec 80 D-: Medical health insurance for family members.
Sec 80 DD-: Expenditure on Medical Treatment for disable
dependant.
Sec 80 E-: Interest paid on loan of higher studies.
Sec 80 G-: Donation to approve funds.
Sec 80 GGA-: Payments for scientific research.
Sec 80-: Income of a disable person.
Sec 80JJA-: Profit from business collecting and processing
biodegradable waistes.
DEMERITS
Unlimited liability.
Don’t get deduction against payment of salaries.
Cannot raise additional capital by way of shares and
debentures issue.
No money received as interest on capital.
May have to liquidate assets for discharging liability
of companies.
HINDU UNDIVIDED
TAXFAMILY
LIABILITY
Similar to individual or sole proprietor.
Allowed as many deductions as allowed to Sole
Proprietor
Salary of KARTA is fully tax deductible.
Interest on capital is not allowed.
PARTNERSHIP
FIRMunder Partnership Act.
Firm registered
Limited to 20 person only.
If limit of person exceed then firm adopt company form
of business organization.
TAX LIABILITY
Pay tax @30% + 10% surcharge + 3% Education cess.
Tax deducted under Sec 80G, 80GGA and 80JJA.
Allowed deduction similar to individuals and HUF.
Interest o capital is allowed as deduction.
Probability of raising additional capital can be solved by
admitting a new partner.
Remuneration paid is allowed as deduction.
DEMEITS
Tax liability is similar to company form of
organization but cannot raise capital by issue
of share.
Liability of partners is limited to the extent
capital contributed.
If Provident Fund wont comply with 184
Section of Income Tax it is treated as AOP
(Association of Persons).
It comes to closure if lunacy of partners is
found.
COMPAN
As per Indian’s Y
Company’s Act 1956.
An artificial person or entity.
TAX LIABILITY
Pay tax @30% + 10% surcharge + 3% Education
cess.
Maximum amount of tax as no tax slab is available.
To pay FBT and DDT and Wealth Tax.
Indirect taxes like custom duty, excise duty, service
tax, VAT.
Deduction on interest paid on debentures and
borrowings.
Salary paid is fully deductible.
Depreciation on assets is fully deductible.
INCOME TAX EXCEMPTION LIMIT- 2009-10
Basic Slabs for Individuals :-
Excemption limit raised from Rs. 1,50,000 to Rs. 1,60,000
Up to Rs.1,60,000 NIL
Rs. 1,60,000 to Rs.3, 00,000 10 %
Rs. 3,00,001 to Rs. 5,00,000 20 %
Above Rs. 5,00,000 30 %