TAX• A fee charged (“levied”) by a government on a product, income,or activity.• The purpose of taxation is to finance government expenditure. TYPES OF TAXES DIRECT TAX INDIRECT TAX EXAMPLES: EXAMPLES: 1. INCOME TAX 1.EXCISE DUTY 2.WEALTH TAX 2. CUSTOMS DUTY 3.CORPORARE TAX 3.SALES TAX 4.GIFT TAX
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.
INCOME TAX RELATED TERMS• ASSESSEE.• PREVIOUS YEAR.• ASSESSMENT YEAR.• PERSON.• GROSS TOTAL INCOME.• TOTAL INCOME.
INCOME TAX SLAB RATES (APPLICABLE FOR ASSESSMENT YEAR 2013 – 2014). The new and revised income tax slabs and rates applicable for the financial year (FY) 2012-13 and assessment year (AY) 2013-14 are mentioned below: FOR INDIVIDUAL MALE,AGE LESS THAN 60 YEARS• Up to 200000 : Nil• 200001-500000 : 10%• 500001-1000000 : 20%• 1000001 & above : 30%FOR INDIVIDUAL FEMALE,AGE LESS 60 YEARS• Up to 200000 : Nil• 200001-500000 : 10%• 500001-1000000 : 20%• 1000001 & above : 30%FOR INDIVIDUAL, AGE MORE THAN 60 YEARS ( SENIOR CITIZEN)• Up to 250000 : Nil• 250001-500000 : 10%• 500001-1000000 : 20%• 1000001 & above : 30%
HEADS OF INCOME1. Income from Salary.2. Income from House property.3. Income from Business / Profession.4. Income from Capital Gains.5. Income from Other Sources.
COMPUTATION OF TOTAL INCOME OF M. NIRANJAN FOR A.Y. 2013-14 PARTICULARS AMOUNT AMOUNTI. Income from Salary (RS) (RS) Basic Salary (Rs.7,500 x 12) 90,000II. Income from house property Gross Annual Value (GAV) 27,000 Less : Municipal taxes paid 2,000 Net Annual Value (NAV) 25,000 Less : Deduction under section 24 (@ 30% of Rs. 7500 17500 25,000)III. Income from profession Net profit 366950IV. Income from other sources Interest on income-tax refund 450 Winnings from the game show on T.V. 50000 50450 Gross Total Income 5,24,900
Gross Total Income 5,24,900Less: 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 Interest on loan taken for higher education is deductible 55,000 170000 Total income 3,54,900So the total income of DR. NIRNJAN isRS.3,54,900
COMPUTATION OF TAX LIABILITY OF DR.NIRANJANPARTICULARS (%) AMOUNT (RS) Total income =RS. 3,54,900 Upto RS.200000 NIL NIL NEXT RS 200001-500000 10 15,490(200001-354900)=RS.154900Add: Education cess @ 2% 309.8Add: Secondary and higher education cess @ 1% 154.9TAX PAYABLE (17618.8)ROUNDED OFF 17,620Thus ,The Total TAX LIABILITY of M.NIRANJANfor A.Y 2013-2014 is RS.17620