Presentation on Taxation

Presented By: Jaspinder Kaur Sharee

TAX may be defined as a "pecuniary burden laid

upon individuals or property owners to support the government, a payment exacted by legislative authority

According

to Income Tax Act 1961, every person, who is an assessee and whose total income exceeds the maximum exemption limit, shall be chargeable to the income tax at the rate or rates prescribed in the finance act. Such income tax shall be paid on the total income of the previous year in the relevant assessment year.

Taxes in India are of two types, Direct Tax and Indirect Tax. Direct Tax, like income tax, wealth tax, etc. are those whose burden falls directly on the taxpayer.

The burden of indirect taxes, like service tax, VAT, etc. can be passed on to a third party.

The Customs Act was formulated in 1962 to prevent illegal imports and exports of goods of customs are levied on goods imported or exported from India at the rate specified under the customs Tariff Act, 1975

Duties

 Central

Excise Duty: The Central Government

levies excise duty under the Central Excise Act, 1944 and the Central Excise Tariff Act, 1985.

Central

excise duty is tax which is charged on such excisable goods that are manufactured in India and are meant for domestic consumption

Service tax is a tax on services provided . Applicability of Service Tax: The Act extends to whole of India except the state of Jammu and Kashmir. Service tax not applicable on Export of services, subject to Conditions given in Export of service rules, 2005.

Rate of Service Tax : At present, the effective rate of Service tax is 10.30 %. The above rate comprises of Service tax @ 10 % on Gross Value of taxable service. Education cess [EC] @ 2 % on service tax amount. Secondary and Higher Education cess [SHE] @ 1 % on service tax amount.

 Tax

levied on value added at each stage of product

being produced and sold & not on gross value. It is a multi point sales tax Eliminates cascading effect at creating uniform tax structure throughout

Aimed

VAT is calculated by deducting tax credit from tax collected during the payment period. Example: (Rate of tax assumed at 10%). Purchase Price Rs.100. Tax paid on purchase Sale Price 150. Tax payable on sale price
tax).

Rs. 10(input tax). Rs. Rs. 15(output

Input tax credit

VAT payable Rs. 10. Rs. 5.
--------

Total tax collection by govt.

On the sale price of Rs. 100 paid on the purchase by the dealer Net VAT paid by the dealer on value addition after resale Total tax at 10% on the last sale price of RS. 150 Rs. 10. Rs. 5. Rs. 15.

Four rates have been prescribed Schedule: I - 0% for exempted goods. Schedule: II - 4%: for manufacturing inputs & IT Products & GSM. Schedule: III -1%: for gold and precious stone. Schedule: IV 20% to 32.5% for Petrol, Diesel oil, Furnace Oil. Schedule: V RNR - 12.5%: for goods not specified under any schedule.