TAXATIONBy- Durgesh Vaishya

Praveen KumarAalok Rai

Darshana BurmanRoopesh Kumar

Varsha Yadav

Taxation .Taxation refers to the act of a taxing

authority actually levying tax. Taxation as a term applies to all types of taxes from income to gift to a estate taxes. It is usually refer to as an act any revenue collected is usually called Taxation.

History of Taxation It is a matter of general belief that taxation

are of recent origin but in ancient time also taxes were levied in some form on sale and purchase of merchandise or livestock. It was all over world. In India Kautilya’s Arthshastra, which deals with he system of Taxation in a real elaborate & planned manner.

Tax It was only for the good of his subjects that

he collected taxes from them, just as Sun draws moisture from the Earth to give it back a thousands fold. - Kalidas in Raghuvansh eulogizing King Dalip

Modern Definition

Tax is imposition of financial charge or other levying

upon a taxpayer by Government or other functional equivalent of the state.

Government PolicyThe organisational history of Income-tax

Department starts in the year 1922.In 1961 Direct Tax Advisory Committee set up- Direct Taxes Administrative Enquiry Committee constituted & Income Tax Act , 1961 came into existence which extends to whole india & became effective from 1st april 1962.

Every year a Budget is presented before Parliament by Finance Minister. Most important component of Budget is Finance Bill, which contains amendments which are sought to be made in the area of Direct tax levied by Central Government.

Types of taxes-i. Direct Taxii. Indirect Tax

Direct TaxThe taxes whose burden falls directly on

taxpayers are Direct Tax. e.g.-Income tax, Wealth tax, Property tax etc.

Indirect TaxIndirect taxes are the taxes in which the

burden of paying tax is shifted through a change in price.

e.g.-Custom Duty, Excise Duty, Sales tax, Service tax etc.

Income TaxIt is a tax on the income of an Individual or

Entity levied by Government. It was introduce in 1860, discontinued in 1873 & reintroduced in 1880.

Income Tax

PERSONAL TAX

It is levied on the income of individual, undivided family & other association of people.

CORPORATE TAX

It is levied on income of Registered Companies & Corporations.

INCOME TAX

Personal Tax

Corporate Tax

Personal Income TaxIncome from all the sources are considered.Certain rebates, Deductions, Expenditures,

Insurances are not consider for levy tax.It is progressive i.e. if income increases tax

rate also increases.It is levied on the basis of slabs.

Slab For Personal Income Tax

Corporate Income TaxRationale for Corporate Tax is that a Joint

Stock Company has a separate Entity so taxed separately.

A Corporation Pays taxes on behalf of income of Shareholders on Dividends paid to them, & each Shareholder get a Credit till 1960-61. Now Share holders don’t get credit because Entity treat as separate Entity.

Corporation pays on flat tax rates & it is different for Indian companies &Foreign companies.

Corporate Income TaxType of Company Total Income More

than INR 10 million

Total Income Less than INR 10 million

Domestic Company 30% ⁺ surcharge ⁺ Education cess

30% ⁺ Education cess

Foreign Company 40% ⁺ surcharge ⁺ Education cess

40% ⁺ Education cess

Custom Duty & OctroiCustom Duty is levied on Import & Export.

From revenue’s point of view, importance of Export Duty is limited.

Since 1991 Custom Duty structure was pruned & now maximum rate of Custom Duty is 10%.

Octroi is a tax on goods entering in to Municipality or any other jurisdiction for use, consumption or sale.

Excise DutyExcise Duty is a tax charged on goods

produced within the country. This is opposite to Custom Duty . Its another name is CENVAT(Central Value Added Tax).

Anti Dumping DutyDumping is said to occur when the goods are

exported by a country to another at a price lower than its normal value. This is an unfair trade practice which can have a distortive effect on international trade. In order to rectify this situation Central Government imposes it.

Sales TaxThis is the tax imposed on the sales of

movable goods. Sale tax on inter state sale is levied by Union Government & on intra state sale by state government.

Service TaxThe tax on paid services you take is Service

Tax. Over past few years, it is expanded to cover new services. Few of the major service which comes under vicinity of service tax are telephone, tour operator, architect, advertising, health center, banking & financial services etc.

Value Added TaxThe part of Sales Tax imposed by State

government is called Value Added Tax. It covers more than 220 items. VAT rates vary based on nature of item &state.

Advantage of TaxesIt helps to the Government in its revenue

which is used to facilitate people of a country.It helps to control inflation.It restrict Government to take loan from

World Bank.It utilizes public money in social walefare.

Disadvantage of TaxesIt restrict common people to get extra

happiness at some extent.If Government misuse tax we don’t have any

control on it.