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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. References
Student guide to Income Tax (Dr. Vinod K. Singhania)
Incometax.gov.in
Monthly guide to the CA News
