TAX-DIRECT AND INDIRECT TAX

1. GROUP MEMBER
• MOHMD SALIM 05
• ANIL SHARMA 10
• AJAY YADAV 12
• NIKHIL BISHT 13

2. TAXES
DIRECT AND INDIRECT TAX

3. TAXES
A direct tax is generally a tax paid directly to the government by the person
on whom it is imposed.
For example:
A taxpayer pays a direct tax to a government for different purposes,
including real property tax, personal property tax, income tax or taxes on
assets.
.
A Indirect tax are those tax which are levied on goods and services
rather than on income or profits.
For example:
(such as sales tax, per unit tax, value added tax (VAT), or goods and services
tax (GST) is a tax collected by an intermediary (such as a retail store) from
the person who bears the ultimate economic burden of the tax (such as the
consumer).

4. WHO ALL ARE LIABLE FOR TAX?
• Individuals
• Hindu undivided families
• Companies
• Partnership firms

5. IMPORTANCE OF TAX
• Economic growth
• Government revenue
• Private saving
• Restraining consumer demand

6. STRUCTURE OF INDIAN TAX SYSTEM
CENTRAL GOVERNMENT:
Income tax, service tax, custom duties, central excise & sales tax
STATE GOVERNMENT:
Sales tax, stamp duty, state excise, land revenue, duty on entertainment
LOCAL BODIES:
Tax on properties, octroi, users charges on utilities like water supply drainage etc

7. Income Tax Rate
Upto 200,000 Nil
200,000 to 500,000 10% of the amount exceeding
200,000
500,000 to 1,000,000 Rs.30,000 + 20% of the amount
exceeding 500,000
1,000,000 & above Rs.130,000 + 30% of the amount
exceeding 1,000,000
FOR INDIVIDUALS BELOW 60 YEARS AGE
(INCLUDING WOMAN ):
LATEST RATE OF INCOME TAX
FOR ASSESSMENT YEAR 2014-15

8. FOR INDIVIDUALS AGED 80 YEARS AND ABOVE (VERY SENIOR CITIZEN):
Income Tax Rate
Upto 500,000 Nil
500,000 to 1,000,000 20% of the amount exceeding 500,000
1,000,000 & above Rs.100,000 + 30% of the amount
exceeding 1,000,000
Income Tax Rate
Upto 250,000 Nil
250,000 to 500,000 10% of the amount exceeding 250,000
500,000 to 1,000,000 Rs.25,000 + 20% of the amount
exceeding 500,000
1,000,000 & above Rs.125,000 + 30% of the amount
exceeding 1,000,000
FOR INDIVIDUALS AGED 60 YEARS AND ABOVE BUT BELOW 80 YEARS
(SENIOR CITIZEN):

9. TYPES OF DIRECT TAXES
INCOME TAX - This is most important type of direct tax and
almost everyone is familiar with it. TDS is its famous
example and whosoever is earning above a minimum amount
(tax exemption limit) has to pay income tax.
WEALTH TAX - This is in addition to the income tax and is levied
if your net wealth exceeds Rs 30 Lakh at the rate of 1% on the
amount exceeding Rs 30 Lakh.
PROPERTY TAX/CAPITAL GAINS TAX - This is levied on the
capital gains arrived by selling property and stocks. Tax rates
are different for long term and short term capital gains.

10. GIFT TAX/ INHERITANCE OR ESTATE TAX - Amount exceeding Rs. 50000
received without consideration by an individual/HUF from any person is
subjected to gift tax as income under "other sources". There are
exemptions like money received from relatives is not taxable. Marriage
gifts and money received through inheritance are also exempt from gift
tax. Inheritance tax was earlier in practice but has been repealed by the
government.
CORPORATE TAX - Companies operating in India are taxed as per the
corporate tax rate on their income. This tax is one of the major sources of
revenue for government.
STAMP DUTY:
• Stamp duty is a form of tax that is levied on documents relating to
immovable property, stocks and shares. Apart from transfers of shares and
securities, stamp duties are also charged on the issue of bearer
instruments and certain transactions involving partnerships.

11. TYPES OF INDIRECT TAXES
A)SERVICE TAX:
Service providers in India are subject to service tax, which is charged on the
aggregate amount received by the service provider. Services like leasing,
internet/voice, transport, etc are subject to service tax.
B) CUSTOM DUTY:
Custom duties are indirect taxes which are levied on goods imported to/exported
from India. There are different rules for different types of goods and sectors.
Government keeps on changing these rates so as to promote import/export of
specific goods.
C) EXCISE DUTY:
Excise duties are indirect taxes which are levied on goods manufactured in India for
domestic consumption. Like custom duty, there are a number of rules which keep
on changing as per government discretion.
D) SALES TAX AND VAT:
Sales tax is levied by the government on sale and purchase of products in Indian
market. As customers, whatever you buy from the market, you pay sales tax on it.
Now, sales tax is supplemented with new Value Added Tax so as to make it
uniform across country.

12. SERVICE TAX
• Service tax was introduced in India for the first time in 1994.
• Service Tax is a tax imposed by Government Of India on services provided
in India
WHAT IS SERVICE TAX ?
• Tax on Services.
• Not an profession
• It is an Indirect tax
• Service tax is a tax levied by the government on service providers on certain
service transactions, but is actually borne by the customers. It is categorized under
Indirect Tax and came into existence under the Finance Act, 1994.

13. LIST OF SERVICES COVERED UNDER SERVICE TAX
There are some detailed list of taxable services viz.
Rail Travel Agents, Tour Operator, Stock Exchange Services,
Internet Telecommunication Services, Telephone,
Transportation of Air and so on.
APPLICABILITY
• Section 64 (1)Applicable to the whole of India except Jammu
& Kashmir.
• Thus any services provided within the territorial limits of the
state of Jammu & Kashmir are excluded from the of levy of
tax i.e. it will not attract service tax.

14. PARTICULAR
Basic Salary ....
Bonus ….
Commission ….
Allowances ….
Perquisites ….
Gross Salary XXX
Less:- Specific deduction ….
Taxable income from salary XXXX
Statement showing taxable income from
Salary

15. PARTICULAR LOP DLOP SOP
Gross Annual Value …. …. 0
Less:- Local Tax, Mu. Tax 0
Net Annual Value XXX XXX 0
Less:- Specific deduction
1.Std. dedu. (30% of NAV) …. …. 0
2. Interest on borrowed capt. …. …. ….
Taxable Income/Loss of
House Property.
XXXX XXXX XXXX
Statement showing taxable income from
House Property

16. PARTICULAR
Net Profit (P&L A/c) ….
Less: Other Heads of Income (P&L A/c) ….
Less: Other Income (Cr. P&L A/c not taxable) ….
Add: Inadmissible Exp. (Dr. to P&L A/c) ….
Less: Inadmissible Exp. (not claimed) ….
Add: Taxable Business Income Not recorded ….
Taxable Business Income XXX
Statement showing taxable income from
Business or Profession.

17. PARTICULAR
Salary Income ….
Add: House Property ….
Add: Business or Profession ....
Add: Capital Gains ….
Add: Income from other source ….
Gross Total Income XX
Less: General Deduction ….
Taxable Income XXX
Statement showing Taxable Income