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Tax system and reformation

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TAX system

For tax reformation visit http://www.youtube.com/watch?v=GVfmUmB0bpM

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Tax system and reformation

  1. 1. WHAT IS TAX???
  2. 2.  Income tax is today an important source of revenue for government in all the countries.  More than 3,000 years ago, the inhabitants of ancient Egypt and Greece used to pay income tax.  Income-tax was first introduced in India in 1860 by James Wilson. TAX
  3. 3. WHY THEYREQURIED TAXIN ANCIENT TIME ?
  4. 4. TAXATION Why do Government impose Taxes???? •Raising money for Government spending •Redistributing Income •Social devlopment •Demand Management •Correcting Market Failure
  5. 5. PRINCIPLE OF TAXATION SIMPLICITY CERTAINTY COST EQUITY NEUTRALITY BROAD BASING RESTRICTED EXEMPTIONS
  6. 6. Taxes can be classified on the basis of form, nature, aim and method of taxation. the most common is to classify into direct and indirect taxes. TYPES OF TAXES TYPES OF TAXES INDIRECT TAX DIRECT TAX
  7. 7. Direct taxes... • A direct tax is a kind of charge,which is imposed directly on the taxpayer and paid directly to the goverment by the person on whom it is imposed • Depending upon his income • a direct tax in one that cannot be shifted by the taxpayer to someone else • directly paid to government • compulsory • it is progressive in nature
  8. 8. Indirect TAX... • An indirect tax is tax collected by an intermeditory from the person who bears the ultimate co economic burden of the tax .Can be shifted by taxpayer to someone else. • Increase the price of a good • Imposed tax on service used by consumer and collected by service provider • You have a choice as you dont buy dont pay tax • Regressive
  9. 9. DIRECT TAX
  10. 10. Corporation Tax The companies and business organizations in India are taxed on the income from their worldwide transactions under the provision of Income Tax Act, 1961
  11. 11. Property Tax: Property tax or 'house tax' is a local tax on buildings, along with appurtenant land, and imposed on owners
  12. 12. GIFT TAX As per the Gift Act 1958, all gifts in excess of Rs. 25,000, in the form of cash, draft, check or others, received from one who doesn't have blood relations with the recipient, were taxable
  13. 13. INDIREC TAXES
  14. 14. Service Tax Service Tax is levied on the gross or aggregate amount charged by the service provider on the receiver
  15. 15. Value Added Tax (VAT) The practice of VAT executed by State Governments is applied on each stage of sale, with a particular apparatus of credit for the input VAT paid.
  16. 16. Sales Tax Sales Tax in India is a form of tax that is imposed by the Government on the sale or purchase of a particular commodity within the country
  17. 17. OTHER INDIRECT TAXES  Central excise duty is tax which is charged on such excisable goods that are manufactured in India and are meant for domestic consumption  Customs Duty: The Customs Act was formulated in 1962 to prevent illegal imports and exports of goods.
  18. 18. 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.
  19. 19. Gross Total Income 5,24,900 Less: 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 loan taken for any purpoes is deductible 55000 170000 Total income 3,54,900 So the total income is RS.3,54,900
  20. 20. COMPUTATION OF TAX LIABILITY PARTICULARS (%) AMOUNT (RS) Total income =RS. 3,54,900 Upto RS.200000 NIL NIL NEXT RS 200001-500000 10 15,490 (200001-354900)=RS.154900 Add: Education cess @ 2% 309.8 Add: Secondary and higher education cess @ 1% 154.9 TAX PAYABLE (17618.8) ROUNDED OFF 17,620
  21. 21. NIKHIL HAVING TWO OPTION 1. WITHDRAW MONEY FROM ACCOUNT 2. TAKE LOAN ADVANTAGE OF TAKING LOAN=CAR+INTREST ON 10 LAKH+ TAX SAVING NEAR 50K
  22. 22. Representing current tax system

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