PRESENTATION ON TAX

Submitted to: Submitted by:

CHANCHAL SIR  POONAM MANTRI

 KAPIL LODHI

 DR. DEEPALI SONI

 NILESH GOYAL

 VIVEK SHRIVASTAV

 SUBHASH SENI
TAX
 Tax is to impose a financial charge or other levy
upon a tax payer by a state or the functional
equivalent of a state such that failure to pay is
punishable by law.
 Tax is impose either by central govt. or state govt.
HISTORY OF TAX
 The first known system of taxation was in
Ancient Egypt around 3000 BC - 2800 BC.
 In India, Islamic rulers imposed jizya starting in
the 11th century. It was abolished by Akbar.
IN ACCORDANCE WITH THE CONSTITUTION
OF INDIAN GOVERNMENT
THE MAIN TAXES/DUTIES THAT THE UNION
GOVERNMENT IS EMPOWERED TO LEVY
 INCOME TAX (except tax on agricultural income, which
the State Governments can levy),

 VAT (value added taxes)

 Central Excise and Sales Tax (CST)

 Service Tax (tax levied on service provided )

PRINCIPAL TAX LEVIED BY THE
STATE GOVERNMENT
 Sales Tax

 Stamp Duty

 State Excise

 Land Revenue

 Octroi
TYPES OF TAXES IN INDIA

DIRECT TAXES
Income tax
Wealth tax
Property tax etc.

INDIRECT TAXES
Sales tax
Vat
Excise duty
Custom duty etc.
 WHAT IS EXCISE
DUTY

-Excise duty is an
indirect tax levied
and collected on
goods
manufactures in
india .
CHARACTERISTICS OF EXCISE DUTY.
 Central tax
 Indirect tax
 On the basis of taxation
 Classification of goods
 Registration
 CENVAT discount
IMPORTANCE OF EXCISE DUTY
 Central excise revenue is the biggest single source of revenue
for the Government of India.

 The scheme of Central Excise levy is suitably adapted and

modified to serve different purposes of price control, sufficient
supply of essential commodities, industrial growth, promotion of
small scale industries and like Authority for collecting the
Central Excise duty.

 Article 265 of the Constitution of India has laid down that both
levy and collection of taxes shall be under the authority of law
TYPES OF EXCISE DUTY
 Basic Excise Duty In India

 Additional Duty of Excise

 Special Excise Duty

 National calamity contingent

 CENVAT
 The general rate of CENVAT has been brought down from 16 per
cent to 14 per cent.

 The CENVAT on many goods like cars, writing paper, printing

paper and packing paper, drugs and pharmaceuticals, water
filtration and purification devices, pan masala not containing
tobacco etc have been decreased.
.
 For packaged software the duty has been increased from 8 per
cent to 12 per cent.

 The duty of 1 per cent on National Calamity and Contingent Duty

has been imposed on mobile phones.
WHAT IS SALES TAX?

 Sales tax is a tax on

the supply of goods
and certain services ,it
is charged at the time
of sale and then
deposited in the
Government treasury.
WHAT TYPES OF BUSINESS ARE
NOT LIABLE FOR SALES TAX?
 Agricultural Products
 Most Of Pharmaceutical Products
 Educational & Scientific Materials
 Equipment For Fighting AIDS & CANCER
OBJECTS OF SALES TAX
 To formulate principles for determining

 To provide for levy, collection and distribution

of taxes

 To declare certain goods

WHAT IS INTERSTATE SALE
According To S3, A Sale Or Purchase Shall Be Deemed
To Take Place In The Course Of Interstate Trade Or
Commerce In The Following Cases:

 When The Sale Or Purchase Occasions The

Movement Of Goods From One State To
Another
 When The Sale Is Effected By A Transfer Of
Documents Of Title To The Goods During Their
Movement From One State To Another
MAIN PRINCIPLES IN STATES SALES TAX LAWS

 Existing Goods Or Future Goods

 In Most Of The Cases Related To The Sales
Tax
 Under The Provisions Of Same State Laws
 A Quarter Return Of Sales Or Purchases
 Concerned Sales Tax/Commercial Tax Officer
 Apply For Registration And Obtain A
Registration
WHAT IS VAT?
 Vat Means Value
Added Tax
 Vat Paid By Dealers
On Their Purchases
Is Usually Available
For Set-off Against
The Vat Collected
On Sales.
BASIC SCHEME OF THE CST ACT
 Sales Tax Revenue To States
 Tax Collected In The Sated Where Movement Of
Goods Commences
 Tax On Inter State Sale Of Goods
 State Sales Tax Law Applicable In Many Aspects
 CST Act Defines Some Concepts
 Declared Goods
WHAT TYPES OF BUSINESS ARE LIABLE FOR VAT?

VAT APPLIES TO ALL TYPES OF BUSINESS

INCLUDING:
 Importers
 Manufacturers
 Distributors
 Wholesalers
 Retailers
 Works Contractors
 Lessors
WHAT IS RATE OF VAT?

Under The Vat, The Tax Rates Have Been

Simplified:
 4% For Items Consisting Mainly Of Raw

Materials Used In The Manufacturing Process

 12.5% For All Goods Unless They Are Listed

Under The Other Rates.

 Foodgrains Including Pulses, Milk, Vegetables

Books are Not Subject To Vat.

Raw Material Sale Price Rs. 1,000
Producer Vat Rs. 100 Manufacturer

Sales Price Rs.1,500 Total Vat Rs.150

Vat Payable
150-100=50

Consumer
Wholesaler

Sales Price Rs.2000 Sales Price Rs. 1800

Total Vat Rs.200 Total Vat Rs.180
Vat Payable Retailer Vat Payable
200-180=20 200-150=50
WHAT ARE THE BENEFIT OF VAT
 It Is Simple, Transparent And Progressive
 Business Friendly System Of Taxation
 Reduction In The Number Of Tax Rates To
Only Two Main Rates – 4% And 12.5%
 Reduction In The Effective Tax Rate For
Many Goods
 Elimination Of “Tax On Tax” Existing In The
Sales Tax System
 Simplification Of Tax Forms And Procedures
 Custom Duty Is A Tax Which A State Collects
On Goods Imported Or Exported Out Of The
Boundaries Of The Country

 In India, Custom Duties Are Levied On The

Goods And At The Rates Specified In The
Schedules To The Custom Tariff Act, 1975
CUSTOM DUTY IS LEVIED ON
 IMPORT OF GOODS

 EXPORT OF GOODS
RULES
 Custom Valuation Rules,1988 For Valuation
Of Imported Goods That Calculates The
Custom Duty Payable

 Custom And Central Excise Duties Drawback

Rule,1971 For Calculating Rates Of Duties As
Drawbacks On Exports
REGULATIONS
 The Central Board Of Excise And Customs
Has Been Empowered To Make Regulations
To Carry Out The Provisions Of The Act

 In Order To Maintain The Rules Of The Act

Several Regulations Like Customs House
Agnents Licensing Regulations, 1984 Have
Been Framed.
OBJECTIVES OF CUSTOM DUTIES
 Restricting Imports For Conserving Foreign
Exchange
 Protecting Indian Industry From Undue
Competition
 Regulating Exports
 Prohibiting Imports And Exports Of Goods
For Achieving The Policy Objectives Of The
Government
 Co-ordinating Legal Provisions With Other
Laws Dealing With Foreign Exchange
TYPES OF CUSTOM DUTIES
 Basic duty

 Addition duty

 Anti-dumping duty

 Export duty

 Protective duty
DEFINITION OF INCOME TAX
 “An income tax is tax
levied on financial
income of person co-
operation or other
legal entity.”
PRINCIPLES
 Personal Earnings
 Capital Gains
 Business Income
 Rates For Different Types Of Income May Vary
And Some May Not Be Taxed At All.
 Capital Gains May Be Taxed When Realized
 Business Income May Only Be Taxed If It Is
Significant
 Personal Earnings May Be Strictly Defined
 Tax Rates May Be Progressive, Regressive,or Flat
 A Progressive Tax Taxes Differentially Based On
How Much Has Been Earned
 Personal Income Tax Is Often Collected On A Pay-
as-you-earn Basis
COMPUTATION OF INCOME AND TAX
Determine Scope Of Total Income
Residence
Year
Place
Exclude Exempt Income
Classify Income Under Different Heads
Compute Income Under Each Head
Determine Gross Total Income
Deduct Claims For Deductions
Compute Net Taxable Income NIT= GTI-DA

Compute Net Tax INCOME TAX =NET (IT)*(Rate of tax)

INCOME TAX SLABS FOR YEAR 2010-2011

 India Income tax slabs 2010-2011 for General tax payers

 Income tax slab (in Rs.) Tax
0 to 1,60,000 No tax
1,60,001 to 5,00,000 10%
5,00,001 to 8,00,000 20%
Above 8,00,000 30%
India Income tax slabs 2010-2011 for Women
 Income tax slab (in Rs.) Tax
0 to 1,90,000 No tax
1,90,001 to 5,00,000 10%
5,00,001 to 8,00,000 20%
Above 8,00,000 30%
India Income tax slabs 2010-2011 for Senior citizen
 Income tax slab (in Rs.) Tax
0 to 2,40,000 No tax
2,40,001 to 5,00,000 10%
5,00,001 to 8,00,000 20%
Above 8,00,000 30%
WEALTH TAX
 A wealth tax is generally conceived of as a levy based on
the aggregate value of all household holdings actually
accumulated as purchasing power stock (rather than
flow), including owner-occupied housing; cash, bank
deposits, money funds, and savings in insurance and
pension plans; investment in real estate and
unincorporated businesses; and corporate stock,
financial securities, and personal trusts

 India: Wealth tax is 1% on wealth exceeding Rs 30,00,000.

However, non-residents returning to India are given
exemption for seven years
 .
PROPERTY TAX
 A property tax (or millage tax) levy on the value
of property, an ad valorem tax that the owner is
required to pay. Property tax can be defined as a
"tax imposed by municipalities upon owners of
real property within their jurisdiction based on
the value of such property.