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Taxation

Taxation. What is Tax Charge made by the Government to the public to meet its expenses for the nation It can be on an individual It can be on a corporation. Direct and Indirect Tax. Direct Taxes Tax paid by persons individually and the liability is ascertained

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Taxation

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  1. Taxation What is Tax • Charge made by the Government to the public to meet its expenses for the nation • It can be on an individual • It can be on a corporation

  2. Direct and Indirect Tax • Direct Taxes Tax paid by persons individually and the liability is ascertained Example : Income Tax,Wealth Tax,Corporate Tax • Indirect Taxes - Paid on the total income for an year. The basis is income and not person.Ex.Excise Duty,Sales Tax,Service Tax

  3. Principles Principles of Taxation • Equity • Progressive • Adequacy • Transparency • Simplicity

  4. Income Tax • Income Tax a) Salary b) Income from property c) Income from Business d) Capital gains e) Income from other Sources

  5. Simple Terms • Terminology - Assessor – A person who assess the income of another - Assessee – A person whose income is assessed - Financial Year- The financial year for which income tax is computed

  6. Simple Terms • Assessment year- It is the period in which the assessment is made. The Year succeeding the Financial Year • Taxable Income- It is the income for which tax is calculated • Allowances – The amount which can be deducted from the Income as mentioned in the Income Tax Act before the calculation of tax is made • Rebates- The amount which can be deducted from the tax before payment

  7. Tax Slabs Income Tax Rates (Males) 0-150000 - Nil 150000-300000 – 10% 300000-500000 - 20% Above 500000 - 30% * Education Cess @ 3%

  8. Tax table for women Tax rates for Females 0-180000 - Nil 180000-300000 – 10% 300000-500000 - 20% Above 5 lacs - 30% Education Cess@3%

  9. Tax table for senior citizens • Income Tax Rates for Senior Citizens (Age65 and above) • Upto 225000 - Nil 225000 – 300000 10% 300000 - 500000 20% Above 5 lacs 30% Education Cess @ 3%

  10. Salary Tax components Salary includes • Wages • Annuity • Gratuity • Leave Encashment Amount • Perquisites

  11. Allowances • Common Allowances from Income (Sec 10) • Leave Travel Allowance • House Rent Allowance • Conveyance Allowance • Special Allowance – Hill Uniform • Education Allowance

  12. Deductions Deductions from Income • Allowances under Sec 10 • Profession Tax ( Sec 16) • Entertainment Allowance • Interest on Housing Loan (Loss under Sec 24 of House property)

  13. Deductions • Deductions under Chapter VI A • Mediclaim Insurance Premium (80D) • Education Loan ( Sec 80E) • Donations (Sec 80G) • Premiums for physically Handicapped Dependants Scheme ( 80 DDA,80DDB) • Physically Handicapped Person (80U)

  14. Deductions • Different form of Savings under Sec 80 C • LIC Premium, • LIC Pension Premium • Contribution to ULIP • NSC, Post Office Time Deposit, Senior Citizen Deposit Scheme • Infrastructure bonds

  15. Deductions • Principal on Housing Loan • Tution Fees paid for Children • Contributions to PF • Contribution to Superannuation Funds,Gratutity Funds • PPF Scheme • Bank Deposits (specified)

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