ROLE OF TAX IN

BUDGET

Presented By:Venkatesh

TAX

Tax is the income which is paid by an individual to the Government.

An individual may be An assessee ,a company, a firm, A Hindu undivided family.

The Provisions of Indian income tax came into existence from 1st April 1962.

Every year budget is presented by our finance minister on 28th march.

Tax

Direct

Wealth tax

Professional tax

Indirect

Customs duty

Excise

duty

Service tax

WEALTH TAX ACT 1957

INTRODUCTION Wealth is a tax on “ASSETS” Wealth Tax is paid by “INDIVIDUALS/HUF/COMPANIES” Wealth Tax is charged on “Net Wealth” Net Wealth = Total Assets - Total Debts.Taxable Income:

There is no surcharge & education cess on Wealth Tax.

Wealth Tax is paid on the Assets owned by the Assessee on a Particular Date.

o This date is 31st March of the Year Preceding the Assessment Year..This date is known as “Valuation Date” .

NET WEALTH TAX %

Up to 30,00,000/-

0%

Balance 1%

APPLICABILITY OF WEALTH TAX Persons covered under Wealth Tax

An individual and Hindu Undivided Family (HUF) and a company

Persons not covered under Wealth tax Co-operative Society, Companies register u/s 25 of companies Act Social club Political parties , RBI, Mutual Fund registered under section 10(23D) of

Income Tax Act.

WHAT IS AN ASSET ? Any building or land there to whether used

for residential or commercial purpose.

Motor cars (other than used by assessee’s in business).

Jewellery Bullion Furniture Utensils or any other article made wholly and

partly of gold, silver, platinum or any other precious metal.

Yachts, boats & aircraft. (Note :- Helicopter is not covered under aircraft)

Urban land.

• Cash in hand in excess of Rs.50,000.

• Incidence Of Wealth Tax:

The liability of wealth tax depends upon the citizenship & residential status.

For HUF, it depends totally upon residential status.

VALUATION DATE It is the last day of the previous year for income

tax assessment. Valuation date will be always on March 31st.Net Wealth: According to sec(2) Net wealth means the amount by which the aggregate value of all assets wherever located belonging to the assesse on the valuation date, is in excess of the aggregate value of all the

debts owed by the assessee on the valuation date.

ROLE OF WEALTH TAX IN BUDGET Surcharge of 10 percent on persons

(other than companies) whose taxable income exceed 1 crore to augment revenues.

Increase surcharge from 5 to 10 percent on domestic companies whose taxable income exceed 10 crore.

In case of foreign companies, surcharge to increase from 2 to 5 percent, if the taxable income exceeds 10 crore.

CONCLUSION The revenue from wealth tax is

negligible as compared to the revenue from income tax. The expenses incurred in collection the wealth tax is very high compared to the revenue earned.

An important point to note is that the wealth tax is unable to keep a check on the affluent people of the society as it fails to bridge the gap between the rich and the poor, as the tax rate is extremely low.

PROFESSIONAL TAX

INTRODUCTION

Professional Tax is like any tax, is a source of revenue for the government. The tax charged by the state governments in India.. Like other taxes professional tax have different rate and method of collection for different states..

Professional tax is a tax paid by all professionals and working individuals of companies falling under certain categories. The amount paid towards professional tax is exempt from income tax.

As per Article 276, Constitution of India, maximum amount payable towards professional tax cannot exceed Rs.2500/-. This tax is payable to any one municipality, local board, district board, or any other legislative agency in the state for the Professions, Trades, Callings and Employments carried out in that particular state.

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RULES GOVERNING PROFESSIONAL TAX PAYMENT:There are certain rules governing the payment of professional tax Some salient points to note:Companies engaged in hiring people for its trade have to apply for

certificate of enrolment.This certificate has to be obtained within 30 days from the date of

tax paying eligibility.Foreigners employed in these companies are not liable to pay

professional tax.For every place of work, separate application needs to be

submitted as per the requirement of the particular state where the place of work is situated.

For individuals employed by any of the diplomatic offices or office of consulate, the professional tax has to be paid by the individuals as these offices need not get a certificate of registration.

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WHO ALL SHOULD PAY PROFESSIONAL TAX??

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WHO ALL EXEMPTED FROM PROFESSIONAL TAX??There are a few categories and people who get

benefit of tax exemption:Senior citizens,Parent of a mentally challenged child, Persons or parents of children suffering from

physical disability. Agriculturalist, temple priest, pastor, goldsmith,

blacksmith, pot maker, washer men, people who perform community based default duties, bookbinder, plumber & electrician.

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TAX PENALTY RULES:

Delay in payment of professional tax attracts penalty.. late payment attracts 10% of additional tax

In fact a delay in obtaining enrolment is also penalised at the rate of Rs.2 per day. If the information that you provided at the time of enrolment is found to be incorrect or false, you have to pay a tax that is three times higher.

If you file your returns late you can be penalised Rs.300/- per every late return filed.

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CONCLUSION• As we all know, tax is a source of revenue for

the government, we have to pay the tax in time & edify the people to pay the tax.

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CUSTOMS DUTY

Introduction: Customs duty is levied under the Customs Act, 1962 as per the rates specified in the First Schedule to the Customs Tariff Act, 1975 known as “Tariff rates”. The Customs Tariff Act, 1975 also provides for levy of (I) Additional duty of customs (commonly referred to as counter vailing duty or CV duty), which is levied at a rate equal to the excise duty leviable on a like article if produced (Or) manufactured in India and which is levied at a rate of 4%.

The Central Government has been delegated powers of exemption under Section 25(1) of the Customs Act,1962 to issue notifications in public interest so as to prescribe duty rates lower than the tariff rates prescribed in the Schedule to the Customs Tariff Act.

• The estimate of revenue foregone under various exemption notifications is based on the data generated from the Bills of Entry filed in the Indian Customs Electronic Data Interchange System (ICES).

•For the year 2011-12, gross customs revenue captured by EDI data was 1,26,504 crore as against the actual gross customs revenue collection of 1,49,300 crore. Thus, the EDI captured nearly 85% of the actual reported gross customs revenue collectionfor the year 2011-12.

•The gross customs revenue for the year 2011-12 was 1,49,300 crore.

•Period of concession available for specified part of electric and hybrid vehicles extended up to 31 March 2015.

•Duty on specified machinery for manufacture of leather and leather goods including footwear reduced from 7.5 to 5 percent.

•Duty on pre-forms precious and semi-precious stones reduced from 10 to 2 percent.

•Duty of 10 percent on export of unprocessed ilmenite and 5 percent on export on ungraded ilmenite.•Concessions to air craft maintenaince, repair and overhaul (MRO) industry.

• Duty on Set Top Boxes increased from 5 to10 percent.

•Duty on raw silk increased from 5 to 15 percent.

•Duties on Steam Coal and Bituminous Coal equalised and 2 percent custom duty and 2 percent CVD levied on both kinds coal.

•Duty on imported luxury goods such as high end motor vehicles, motor cycles, yachts and similar vessels increased.

• Duty free gold limit increased to 50,000 in case of male passenger and `1,00,000 in case of a female passenger subject to conditions.

Excise Duties

• Excise duty is levied as per the rates specified in the First and Second Schedules to the Central Excise Tariff

Act, 1985.• The rates specified in various enactments are known

as the “Tariff rates” of Excise duty.

• Central Government has been granted powers under Section 5A(1) of the Central Excise Act, 1944.

• The rates prescribed by exemption notifications are known as the “effective rates”.

•As for area-based exemptions, there are two types of schemes currently in operation - [i] based on refunds (North East and J & K) and [ii] exempted states (Himachal Pradesh and Uttarakhand).

•Automation of Central Excise & Service Tax (ACES) system has been launched in all the Central Excise formations across the country.

•Revenue was estimated at 2,06,167 crores. The estimates of 2,06,188 crore show an increase of 5.4% over last year’s revised figure of 1,95,590 crore.

•The revenue has increased compared to that registered in 2011-12, because collections have increased in the currentfinancial year by over 18% till December, 2012 compared to the corresponding period in 2011-12.

• Further, the central excise duty rates have been raised from 10% to 12%, 5% to 6%.

The following are the Various Reliefs And Burdens on Various Excise Duties:•Relief to readymade garment industry. In case of cotton, zero excise duty at fibre stage,Incase of spun yarn made of man made fibre, duty of 12 percent at the fibre stage.

•Handmade carpets and textile floor coverings of coir and jute totally exempted from excise duty.

•To provide relief to ship building industry, ships and vessels exempted from excise duty, No CVD on imported ships and vessels.

• Specific excise duty on cigarettes increased by about 18%.

•Excise duty on SUVs increased from 27 to 30 percent. Not applicable for SUVs registered as taxies.

•Excise duty on marble increased from 30 per square meter to 60 per square meter.

•Duty on mobile phones priced at more than 2000 raised to 6 percent.

•Proposals to levy 4 percent excise duty on silver manufactured from smelting zinc or lead.

•MRP based assessment in respect of branded medicaments of Ayurveda,Unani,Siddha, Homeopathy and bio-chemic systems of medicine to reduce valuation disputes.

Service Tax

Introduction:•The service tax act came into existence in

the year 1994.

•Income From Service Tax For The Year 2012-2013 Is 1,32,697 Crores.

The following are the Various Reliefs And Burdens of Service Tax:•Exemption of Service Tax on copyright on cinematography limited to films exhibited in cinema halls.

•Proposals to levy Service Tax on all Air conditioned restaurants.

• Vocational courses offered by institutes affiliated to the State Council of Vocational Training and testing activities in relation to agricultural produce also included in the negative list for service tax.

• For homes and flats with a carpet area of 2,000 sq.ft. or more or of a value of 1 crore or more Or high-end constructions component of services, rate of abatement reduced from

75 to 70 percent.

•Maintain stability in Tax Regime

• Out of 17 lakh registered assesses under Service Tax only 7 lakhs file returns regularly. Need to motivate them to file returns and pay tax dues.

•Work on draft GST Constitutional amendment bill and GST law expected to be taken forward