WHAT IS IT???? Taxes Classified broadly as - Direct Tax
Taxes Directly paid by a Person or Corporate directly to the Government Like Income Tax ,Wealth Taxes, Corporate Tax, Capital Gain Tax, Petroleum Profit Tax.
- Indirect Tax
Undoubtedly its all about tax paid indirectly like Taxes on goods and Services, Excise Duties, Export & Import Duties, VAT etc
India And Tax Regime India an Middle income Country have an oriental Tax Regime Since Before DTC bill 2010. Being an 3rd Largest Economy in Asia and Emergent Global Economy . Tax GDP ratio increased from 2.97 at the beginning of this decade to 6.45 percent in 2009-2010.(Kudos to IT revolution)
Current Position & What we Expect Income tax Payers Slab 95.75 % of Tax Payers are in 1- 5 Lacs income group 2% -Tax payers are in 5-8lacs income group 2.2% - Tax Payers are in >8 lacs Income New Tax Code aimed at benefiting 1-5 Lacs Slab Significantly Let us c How…….
Proposed Tax Regime- As Per DTC • Tax for income between Rs. 2 lakh – Rs. 5 lakh: 10%• Tax for income between Rs. 5 lakh – Rs. 10 lakh: 20%• Tax for income over Rs. 10 lakh: 30%The limit for exemptions for salaried people is Rs. 2 lakh, while that for senior citizens is Rs. 2.5 lakh. Corporate Tax -30% Minimum Alternate Tax on book Profits -20%
Reforms Under DTC bill(For Common Person) Positive Effects:
New Tax Regime ,Attractive Income TAX Slab for Middle Income Group
Tax Exemption May Increased From 1lacs to 3Lacs (Plan more to Get Exemption Effectively)
Securities Transaction Tax may be Abolished.
……..R u an Share Market Savvy you may Benefited with a small Pie
Minor Adverse Effect to Common Man Maturity Amount Received by - Provident Funds, Mutual Tax are Taxable. Currently no taxes are Levied (A better future planner will increase his investment to avoid cut on returns)
Interest Paid on Home Loans are Not Exempted
Perks from Employer is taxable. Perks in Form of Interest free Loans, Free Lunch etc… Nobody can gain without a loss
An Example – DTC & Common Man Name : Ajay PatelSalary : 8 lacs per yearInvestments : Investment of 30k in Mutual funds, 30k in EPF , 20k in PPF and 20k in Insurance Policy .Home Loan : Taken a Home loan and pays 80k as Principle and 1.4 lacs as Interest .
How it works Tax as per Current System Amount Exempted = 1.4 lacs as home loan interest + 1 lac in 80C = 2.4 Lacs Taxable Income = 5.6 lacs Tax = 14k (10% from 1.6 to 3 lacs) + 40k (20% from 3 – 5 lacs) + 18k (30% on 5 – 5.6 lacs) = Rs 72,000 Tax as per New Tax Code Amount Exempted = 1 lac from (mutual funds , PPF , EPF , Insurance) + 80k as Home loan principle = 1.8 lacsTaxable Income = 6.2 lacsTax = Rs 44,000 (10% on 1.6 lacs – 6.2 lacs)
It’s a time to think Are you Coming under Middle Income Group Plan Efficiently on Basic Investment Plan Increase your Efficiency on Personal Finance Prepare yourself to utilize Government Reforms
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