tax system and reformation
DESCRIPTION
TAX system For tax reformation visit http://www.youtube.com/watch?v=GVfmUmB0bpMTRANSCRIPT
WHAT IS TAX???
Income tax is today an important source of revenue for government in all the countries.
More than 3,000 years ago, the inhabitants of ancient Egypt and Greece used to pay income tax.
Income-tax was first introduced in India in 1860 by James Wilson.
TAX
WHY THEYREQURIED TAX IN ANCIENT TIME
?
TAXATION
Why do Government impose Taxes???? •Raising money for Government spending•Redistributing Income•Social devlopment•Demand Management•Correcting Market Failure
PRINCIPLE OF TAXATIONSIMPLICITYCERTAINTYCOSTEQUITYNEUTRALITYBROAD BASINGRESTRICTED EXEMPTIONS
Taxes can be classified on the basis of form, nature, aim and method of taxation. the most common is to classify into direct and indirect taxes.
TYPES OF TAXES
TYPES OF TAXES
INDIRECT TAX
DIRECT TAX
Direct taxes...
• A direct tax is a kind of charge,which is imposed directly on the taxpayer and paid directly to the goverment by the person on whom it is imposed
• Depending upon his income• a direct tax in one that cannot be shifted by the
taxpayer to someone else• directly paid to government• compulsory• it is progressive in nature
Indirect TAX...
• An indirect tax is tax collected by an intermeditory from the person who bears the ultimate co economic burden of the tax .Can be shifted by taxpayer to someone else.
• Increase the price of a good
• Imposed tax on service used by consumer and collected by service provider
• You have a choice as you dont buy dont pay tax
• Regressive
DIRECT TAX
Corporation Tax
The companies and business organizations in India are taxed on the income from their worldwide transactions under the provision of Income Tax Act, 1961
Property Tax:Property tax or 'house tax' is a local tax on buildings, along with appurtenant land, and imposed
on owners
GIFT TAX
As per the Gift Act 1958, all gifts in excess of Rs. 25,000, in the form of cash, draft, check or others, received from one who doesn't have blood relations with
the recipient, were taxable
INDIREC TAXES
Service TaxService Tax is levied on the gross or aggregate amount charged by the service provider on the receiver
Value Added Tax (VAT)
The practice of VAT executed by State Governments is applied on each stage of sale, with a particular apparatus of credit for the input VAT paid.
Sales Tax
Sales Tax in India is a form of tax that is imposed by the Government on the sale or purchase of a particular commodity within the country
OTHER INDIRECT TAXES
Central excise duty is tax which is charged on such excisable goods that are manufactured in India and are meant for domestic consumption
Customs Duty: The Customs Act was formulated in 1962 to prevent illegal imports and exports of goods.
INCOME TAX
Income tax is one of the direct tax and it is levied on the incomes of individuals, HUF, unregistered firms and other associations of peoples.
Income tax act was passed in Sep 1961 and came into force in 1st April 1962.
Gross Total Income 5,24,900
Less: Deductions under Chapter VI A (a) Deduction under section 80C Tuition fee paid to university for education 1,00,000 (b) Deduction under section 80D Medical insurance premium (maximum allowable upto Rs.15,000) 15,000 (c) Deduction under section 80E loan taken for any purpoes is deductible 55000 170000
Total income 3,54,900
So the total income is RS.3,54,900
COMPUTATION OF TAX LIABILITY
PARTICULARS (%) AMOUNT (RS)
Total income =RS. 3,54,900
Upto RS.200000 NIL NIL
NEXT RS 200001-500000 10 15,490(200001-354900)=RS.154900
Add: Education cess @ 2% 309.8 Add: Secondary and higher education cess @ 1% 154.9
TAX PAYABLE (17618.8)ROUNDED OFF 17,620
NIKHIL HAVING TWO OPTION
1. WITHDRAW MONEY FROM ACCOUNT
2. TAKE LOAN
ADVANTAGE OF TAKING LOAN=CAR+INTREST ON 10 LAKH+ TAX SAVING NEAR 50K
Representing current tax system