Taxation system(rims)

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Taxation system(rims)

  1. 1. Presented by: Bikash ch. Behera(25) Prasanta ku. Sethi(23) Anchor faculty: Prof. Trilochan Jena
  2. 2. Plan of Presentation  Introduction  Direct tax  Indirect tax  Treatment of agricultural income  Advance payment of tax  Tax Deducted at Source(TDS)  Return of income  VAT  Service tax  Tax planning  Tax proposals in the union budget 2013-14
  3. 3. Introduction The term ‘Tax’ means a compulsory contribution by people to the state revenue levied by the government on personal income and business profits. It is a sum of money demanded by the government for its support or for specific facilities or services. Income tax Act.1961 Generally there are two types of tax: 1. Direct tax 2. Indirect tax
  4. 4. Direct tax It is an amount of obligation, which is levied by the government directly from an “Assessee’s” total income or wealth. ‘Direct tax’ is divided in to two types: I. Income tax II. Wealth tax
  5. 5. computation of Taxable Income  Income from Salary ***  Income from House property ***  Income from PGBP ***  Income from capital gain ***  Income from Other sources *** Gross total income **** Less Deduction u/s 80C to 80U (**) Net total income *** Tax on net total income ** Add surcharge * Add Education cess(2%) * Add Higher education cess(1%) * Less TDS or TCS (**) Tax liability **
  6. 6. Income tax Rates of income tax in assessment year 2013-14 Applicability- Individual ,HUF ,AOP ,BOI Taxable income slab(Rs.) Up to 2,00,000 2,00,000 - 5,00,000 5,00,000 – 10,00,000 10,00,000 & above (up to 1 crore) 1 crore & above is applicable for a surcharge of 10% Rates Nil 10 20 30
  7. 7. Income tax Rates of income tax in assessment year 2013-14 Applicability-Senior Citizen(Who have at least 60 years of age) Taxable income slab(Rs.) Up to 2,50,000 2,50,000 - 5,00,000 5,00,000 – 10,00,000 10,00,000 & above (up to 1 crore) Rates Nil 10 20 30
  8. 8. Income tax Applicability Other-  Super Senior Citizen- Exempt Upto 500,000 (And After that Slab as usual for Individual)  Firm-A Partnership Firm is taxable at the rate 30% ( No Exemption Limit)  Domestic Company- Taxable at the rate 30% or Minimum Alternative Tax at the rate 8.5% or 8%  Non-Domestic Company- Taxable at the rate 40% or Minimum Alternative Tax at the rate 8.5% .
  9. 9. Indirect Tax It is the tax which is collected from assesses at one point and Deposit it with the state Exchequer at another point. It includes the following: VAT  Service tax  Excise duty  Custom duty  Sales tax
  10. 10. Agricultural Income According to income tax Act.1961 sec 10(1) Agricultural income is Exempt from tax. Agricultural income include sec-2 (IA) Rent or Revenue derived from land Income derived from agricultural land by agricultural operation Income from farm building There are some product which is treated as partly :  Tea 40%(Non Agri) 60% (Agricultural)  Coffee 25% 75%
  11. 11. Advance payment of Tax Every person is liable to pay advance tax if If tax liability is more than Rs.10,000 after Deduction of TDS When it is paid: On or before sept-15 of the previous year 30% On or before Dec-15 of the previous year 30% On or before mar-15 of the previous year 40%
  12. 12. Tax Deducted at Source(TDS) It is the Deduction of tax by the provider of income before it reach to the recipient of income and Deposit the same to the govt.’s Treasury with in the stipulated time. Followings are the payments covered by TDS scheme • Salary • Interest on savings, FD • Deemed Dividend • Commission • Lottery winnings • Winning from Race horses • Winning from Realty Shows (KBC, Big Boss)
  13. 13. Cntd… Rates of TDS Salary (If it exceed the exemption limit Rs.200,000) 10% Interest (If exceed RS.10,000) 10% Deemed Dividend (foreign company) 10% Lottery winning 30% Winning from Race horses 30% Winning from Realty Shows 30% Commission (If exceed Rs.5,000) 10%
  14. 14. Return of Income All Person have to submit his return of income whether it is Individual ,Firm, Company ,AOP (manually or Electronically) But the followings are the conditions where it is not mandatory : If his taxable income does ’t exceed Rs. 200,000 The Individual who has no claim of refund of TDS Any Income from agriculture In case of the persons having Income more than Rs.500,000 E-filling is mandatory www.incometaxindiaefilling.gov.in
  15. 15. Cntd… These are the forms given bellow: ITR-1 Individual having income from salary ITR-2 Individual and HUF not having Business & professional income ITR-3 Individual & HUF being partner in firms ITR-4 Individual & HUF having income from proprietary business ITR-5 For firms, AOPs, BOIs ITR-7 For companies ITR-V For those having no Digital Signature Certificate For companies Sept-30 For assesses are required to be Audited under any law Sept-30 For whose A/Cs are not Audited or Any other cases July-31
  16. 16. VAULE ADDED TAX (VAT) Imposed on the value of goods or commodities at Each stage of Sale i.e from raw-materials to finish product. Introduced in the year 1999 Applied in some states from 2005 At present VAT is 13.5% and 5% depend on the nature of commodities.
  17. 17. Benefits of VAT  Prevent Cascading effect by providing input rebate  Prices will be generally fall  Tax Evasion will be reduced  More Transparency  Higher Revenue Growth  Set-off will be given for input tax  Other taxes i.e. Turnover Tax, Surcharges etc. will be abolished
  18. 18. Demerits of VAT  Ultimately it rises the burden of the Final Consumers  Increases the Administration cost of the State Govt  General rate 13.5% is too high  It doesn’t cover goods as well as services  It Differ State to State
  19. 19. Service Tax (1st July 1994) There are two Approaches to taxation of Service: Selective Approach Comprehensive approach Features of Service tax: Uniform rate(12.36%) Not applicable in Jammu & Kashmir Indirect tax No separate Act No TDS Administered by CBEC Small service provider excluded
  20. 20. Negative List of Service Tax Services provided by Government/Local Authority Services provided by RBI Agriculture or Agricultural Produce Trading of Goods Any process amounting to manufacture or production of goods Advertisement(Other than Advertisement in Radio or T.V. Way of access to a Road or a Bridge on payment of toll charges
  21. 21. Cntd….. Betting ,Gambling or Lottery Admission to Entertainment events or access to Amusement Facility Transmission or Distribution of Electricity Services relating to Education Renting of Residential Dwellings for use as residence Financial Sector Transportation of Passengers Transportation of Goods
  22. 22. Tax Planning A. Deduction u/s-80c (max. Rs.100,000)  Amount deposited in respect of life insurance premium  Payment in notified plan of LIC (jeevan dhara)  Principal amount on Housing Loan  Subscription towards notified scheme of Mutual Fund  Any sum paid as tuition fees (at the time of admsn.) to any college/university/Educational university  Subscription to any notified scheme of NABARD  Amount deposited in 5 yr. Time deposit in post office  Amount deposited in Approved Debentures & Equity shares
  23. 23. Cntd… B. Deduction u/s-80D (upto Rs.15,000 p.a) Contribution in respect of Medical Insurance Premium C. Deduction u/s-80E Payment of interest on loan taken for Higher education D. Deduction u/s-80GG (Upto Rs.24,000 p.a) Rent paid for any Residential Accommodation
  24. 24. Tax proposal in the union budget 2013-14  Individual having income of upto Rs.500,000 entitled to a rebate of upto Rs.2,000  Surcharge @ 10% to be attracted if total income exceeds Rs.1 crore  Commodities Transaction tax(CTT) to be levied on non-agricultural commodities  All restaurants with air-conditioning or central air heating ( including restaurants not serving liquor as well)at any time during the year liable to pay service tax
  25. 25. Conclusion Tax structure in India plays a vital role in development of the country. Govt. uses that amount for the welfare of the country So the taxation system of India should be designed in such a way that all the liable tax payers shouldn’t avoid it rather than they must pay it Voluntarily
  26. 26. References  Student guide to Income Tax (Dr. Vinod K. Singhania)  Incometax.gov.in  Monthly guide to the CA News
  27. 27. Your queries please…..

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