Tax

2. Course Topics
Introduction to Key Legal and Taxation Aspects in Finance
Income Tax Act, 1961
Goods and Service Tax, 2017
Prevention of Money Laundering Act, 2002
Foreign Exchange Management Act
SEBI Act
Banking Regulation Act

3. Introduction to Taxation
In this world, nothing is certain except Death and Tax – Benjamin Franklin

4. Types of Taxes
Progressive
Tax
Regressive
Tax
Proportional
Tax

5. Progressive Tax
• Tax designed to take a larger percentage of income from
the wealthy than the poor.
Definition
• The wealthy can afford a higher tax and should pay more of
the tax burden.
Argument for:
• Why should the hardest working and most successful pay
more taxes? Wealthy are penalized for their success.
Argument
against:
• Income Tax with Tax Brackets
Example

6. Progressive Tax

7. Regressive Tax
• Tax which takes a higher percentage of
income from the poor than from the rich.
Definition
• Tax levied on what is bought. If you cannot
afford the tax, do not buy the item.
Argument for:
• Tax harms those who can least afford it.
Argument
against:
• Sales Tax, SIN Tax, etc
Example

8. Regressive Tax

9. Proportional Tax
• A tax that takes the same percentage of income from the
wealthy and poor.
Definition
• Everyone is equal- pay same % of income.
Argument for:
• The poor need their income more than the wealthy. They
need every penny and cannot afford as much of a tax as the
wealthy.
Argument
against:
• “Flat Tax” Income Tax (Greenland)
Example

10. Regressive Tax

11. History of Taxation in India
1860
1886 1918
1922 1961

12. Source of Revenue for Indian Government
Tax Revenues
• Direct Tax
• Indirect Tax
Non – Tax
Revenues
• Interest Receipts
• PSUs Profit
• General Services

13. Income Tax Act, 1961