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Presentation

on

Taxation

Presented By:

Jaspinder Kaur Sharee

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TAX may be defined as a "pecuniary burden laidupon individuals or property owners to supportthe government, a payment exacted by legislative

authority

According to Income Tax Act 1961, every person, who is an assessee and whose total

income exceeds the maximum exemptionlimit, shall be chargeable to the income tax atthe rate or rates prescribed in the finance act.Such income tax shall be paid on the total

income of the previous year in the relevantassessment year.

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Taxes in India are of two types, Direct Tax

and Indirect Tax.

Direct Tax, like income tax, wealth tax, etc. are those

whose burden falls directly on the taxpayer.

The burden of indirect taxes, like service tax, VAT,

etc. can be passed on to a third party.

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The Customs Act was

formulated in 1962 to prevent illegal imports and

exports of goods

Duties of customs are levied on goods imported or 

exported from India at the rate specified under the

customs Tariff Act, 1975

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Central Excise Duty: The Central Government

levies excise duty under the Central Excise Act, 1944

and the Central Excise Tariff Act, 1985.

Central excise duty is tax which is charged on such

excisable goods that are manufactured in India andare meant for domestic consumption

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Service tax is a tax on services provided .Applicability of Service Tax: The Act extends to whole of India except the state of 

Jammu and Kashmir. Service tax not applicable on Export of services, subject

to Conditions given in Export of service rules, 2005.

Rate of Service Tax :At present, the effective rate of Service tax is 10.30 %.The above rate comprises of Service tax @ 10 % on

“Gross Value of taxable service”. Education cess [EC] @2 % on service tax amount. Secondary and Higher Education cess [SHE] @ 1 % on service tax amount.

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Tax levied on value added at each stage of product

being produced and sold & not on gross value.

It is a multi point sales tax

Eliminates cascading effect

Aimed at creating uniform tax structure throughout

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VAT is calculated by deducting tax credit from tax collected during the payment period.

Example:

(Rate of tax assumed at 10%).

Purchase Price

Rs.100. 

Tax paid on purchase

Rs. 10(input tax). 

Sale Price Rs.150. 

Tax payable on sale price  Rs. 15(output

tax). 

Input tax credit 

Rs. 10.VAT payable Rs. 5. 

Total tax collection by govt. --------

On the sale price of Rs. 100 paid on the purchase by the dealer   Rs. 10.

Net VAT paid by the dealer on value addition after resale  Rs. 5.

Total tax at 10% on the last sale price of RS. 150 Rs. 15.

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Four rates have been prescribed

Schedule: I - 0% for exempted goods.

Schedule: II - 4%: for manufacturing inputs & IT

Products & GSM.Schedule: III -1%: for gold and precious stone.

Schedule: IV – 20% to 32.5% for Petrol, Diesel oil,

Furnace Oil.

Schedule: V RNR - 12.5%: for goods not specified

under any schedule.

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