|
Taxation in India
The tax on incomes, customs duties, central excise and service tax are levied by the Central Government. The state Government levies agricultural income tax (income from plantations only), Value Added Tax (VAT)/ Sales Tax, Stamp Duty, State Excise, Land Revenue, Luxury Tax and Tax On Professions. The local bodies have the authority to levy tax on properties, octroi/entry tax and tax for utilities like water supply, drainage etc.
What is Tax ?
Taxation is when the government takes a certain amount of its citizens' money in order to provide services, raise an army, or other such thing. Taxes consist of direct tax or indirect tax, and may be paid in money or as its labour equivalent.
Direct Taxes
The levy of Tax is governed by the Indian Income Tax Act, 1961. The Indian Income Tax Department is governed by the Central Board for Direct Taxes (CBDT) and is part of the Department of Revenue under the Ministry of Finance, Govt. of India. There are close to 35 million income tax payers in India.
The DTC consolidates the provisions for Direct Tax namely the income tax and wealth tax. When it comes into effect, probably April 2012, it is likely to have significant impact on the tax payers especially the business community.
In the case of individual tax incomes from salary, house and property, business & profession, capital gains and other sources are subject to tax. Women and Senior citizens are extended some special privileges. Individuals’ incomes are subjected to a progressive rate system. Tax treatment differs depending on the residence status.
Indirect Tax
The central government levies excise duty under the Central Excise act of 1944 and the Central Excise Tariff Act of 1985. Central Excise duty is an indirect tax levied on goods manufactured in India and meant for domestic consumption. The Central Board of Excise and Customs under the Ministry of Finance, administers the excise duty.
Central Excise Duty arises as soon as the goods are manufactured. It is paid by a manufacturer, who passes on its incidence to the customers. Excisable goods have been defined as those, which have been specified in the Central Excise Tariff Act as being subjected to the duty of excise.
There are three main types of excise duty -
- Basic Excise Duty is charged on all excisable goods other than salt at the rates mentioned in the said schedule.
- Additional Duties of Excise is charged on goods of special importance, in lieu of sales Tax and shared between Central and State Governments.
- Special Excise Duty is charged on all excisable goods on which there is a levy of Basic excise Duty. Every year the annual Budget specifies if Special Excise Duty shall be or shall not be levied and collected during the relevant financial year.
Taxation In India 2012
|
Taxation India 2012 |
| | 2012 |
EARLIER |
| RATES OF TAX FOR MALE INDIVIDUAL NOT SENIOR CITIZEN |
0-1,80,000
1,80,001-5,00,000
5,00,001-8,00,000
MORE THAN 8,00,000 |
NIL
10%
20%
30% |
|
0-1,50,000
1,50,001-3,00,000
3,00,001-5,00,000
MORE THAN 5,00,000 |
NIL
10%
15,000+20%
55,000+30% |
|
| RATES OF TAX FOR FEMALE INDIVIDUAL NOT SENIOR CITIZEN |
0-1,90,000
1,90,01-5,00,000
5,00,001-8,00,000
MORE THAN 8,00,00 |
NIL
10%
20%
30% |
|
0-1,80,000
1,80,001-3,00,000
3,00,001-5,00,000
MORE THAN 5,00,000 |
NIL
10%
12,000+20%
52,000+30% |
|
| RATES OF TAX FOR SENIOR CITIZEN (65 YEARS OR MORE) |
Upto Rs. 2,40,000
2,40,000-5,00,000
5,00,000-8,00,000
MORE THAN 8,00,000 |
NIL
10%
26,000 + 20%
86,000 + 30% |
|
0-2,25,000
2,25,001-3,00,000
3,00,001-5,00,000
MORE THAN 5,00,000 |
NIL
10%
7,500+20%
47,500+30% |
|
| SECURITIES TRANSACTION TAX / COMMODITIES TRANSACTION TAX |
ALLOWED TO BE DEDUCTED
PROVIDED INCOME ARISING FROM SUCH TRANSACTIONS IS INCLUDED IN INCOME UNDER THE HEAD 'PROFIT AND GAINS OF BUSINESS OR
PROFESSION'
|
SECURITIES TRANSACTION TAX NOT ALLOWED TO BE DUDUCTED
COMMODITIES TRANSACTION TAX NOT AVAILABLE
|
PAYMENT IN EXCESS OF RS 20,000/- IN A DAY OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE/BANK DRAFT
|
NOT TO BE ALLOWED
IF INDIVIDUAL PAYMENT IN CASH IS LESS THAN 20,000/- BUT TOTAL COMES TO MORE THAN 20,000/- IN A DAY
|
ALLOWED
TOTAL OF ALL PAYMENTS IN CASH COMES TO MORE THAN
20,000/- IN A DAY BUT INDIVIDUAL PAYMENT IN CASH IS LESS THAN 20,000/-
|
INVESTMENTS IN POST OFFICE
|
PAYMENT MADE IN AN ACCOUNT UNDER 'SENIOR CITIZENS SAVINGS SCHEME RULES, 2004' OR 5 YEAR TIME DEPOSIT IN AN ACCOUNT POST OFFICE TIME DEPOSIT RULES, 1981 ARE ALSO ELIGIBLE
|
NOT ELIGIBLE
|
MEDICLAIM
|
ADDITIONAL RS 15,000/- SHALL BE ALLOWED IF MEDICLAIM TAKEN FOR PARENTS EVEN THOUGH THEY ARE NOT DEPENDANTS AND RS 20,000/- IF INSURED PARENTS ARE SENIOR CITIZENS
|
NOT AVAILABLE
|
TAX HOLIDAY FOR HOSPITALS
|
5 YEARS TAX HOLIDAY FOR HOSPITALS OTHER THAN IN AHMEDABAD INCLUDING GANDHINAGAR, MUMBAI, DELHI INCLUDING FARIDABAD, GURGAON, GHAZIABAD, GAUTAM BUDH NAGAR,, KOLKATA, CHENNAI, HYDERABAD INCLUDING SECUNDARABAD AND BANGALORE
HOSPITAL SHOULD HAVE BEEN MADE AND STARTED FUNCTIONING BETWEEN
1/4/2008
AND
31/3/2013
|
NOT AVAILABLE
|
TAX HOLIDAY FOR HOTELS
|
5 YEARS TAX HOLIDAY FOR 2,3,4 STAR HOTELS AND CONVENTION CENTRES IN NATIONAL CAPITAL TERRITORY OF DELHI, FARIDABAD, GURGAON, GAUTAM BUDH NAGAR & GHAZIABAD AND
WORLD HERITAGE SITES INCLUDING
AGRA, JALGOAN, AURANGABAD, KANCHEEPURAM, PURI, BHARATPUR, CHHATARPUR, THANJAVUR, BELLARY, SOUTH 24 PARGANAS, CHAMOLI,
RAISEN, GAYA, BHOPAL, PANCHMAHAL, KAMRUN, GOALPARA, NAGAON, NORTH GOA, SOUTH GOA, DARJEELING AND NILGIRI.
HOTELS AND CONVENTION CENTRE SHOULD HAVE BEEN CONSTRUCTED AND START FANCTIONING BETWEEN
1/4/2008
AND
31/3/2013
|
NOT AVAILABLE
|
SHORT TERM CAPITAL GAIN
|
15% IN CASE OF SHORT TERM CAPITAL GAIN ARISING FROM TRANSFER OF EQUITY SHARES IN A COMPANY OR UNIT OF AN EQUITY ORIENTED FUND
|
10% IN CASE OF SHORT TERM CAPITAL GAIN ARISING FROM TRANSFER OF EQUITY SHARES IN A COMPANY OR UNIT OF AN EQUITY ORIENTED FUND
|
MAT
|
ITEMS TO BE ADDED TO BOOK PROFIT
DEFERRED TAX, TAX ON DISTRIBUTED PROFITS U/S 115O OR 115R, INTEREST CHARGED, SURCHARGE, EDUCATION CESS AND SECONDARY & HIGHER EDUCATION CESS
|
EFFECT IS TO BE GIVEN RETROSPECTIVELY FROM ASSESSMENT YEAR 2001-02
|
TAX ON DISTRIBUTED INCOME
|
AMOUNT OF DIVIDEND TO BE REDUCED BY AMOUNT OF DIVIDEND RECEIVED FROM SUBSIDIARY COMPANY
PROVIDED THAT DOMESTIC COMPANY ITSELF SHOULD NOT BE SUBSIDIARY COMPANY
|
NOT AVAILABLE
|
FBT
|
EXCLUSION FROM EMPLOYEES' WELFARE
CRECHE FACILITY FOR CHILDREN OF EMPLOYEE, SPNSOR A SPORTSMAN BEINGAN EMPLOYEE, ORGANISE SPORTS EVENTS FOR EMPLOYEES, EXPENDITURE ON MAINTENANCE OF ANY ACCOMMODATION IN THE NATURE OF GUEST HOUSE OTHER THAN USED FOR TRAINING PURPOSES
|
NOT AVAILABLE
|
RETURN OF FBT
|
DUE DATE 30TH SEPTEMBER FOR THE AUDIT ASSESSEES
|
DUE DATE 31ST OCTOBER FOR THE AUDIT ASSESSEES
|
INCOME TAX RETURN
|
DUE DATE 30TH SEPTEMBER FOR THE AUDIT ASSESSEES
|
DUE DATE 31ST OCTOBER FOR THE AUDIT ASSESSEES
|
ASSESSEMENT
|
U/S 142(2)(ii) NO NOTICE AFTER THE EXPIRY OF 6 MONTHS FROM THE END OF THE FINANCIAL YEAR IN WHICH RETURN IN FURNISHED
|
U/S 142(2)(ii) NO NOTICE AFTER THE EXPIRY OF 12 MONTHS FROM THE END OF THE FINANCIAL YEAR IN WHICH RETURN IN FURNISHED
|
TDS CERTIFICATE
|
DATE OF NO REQUIREMENT OF FURNISHING CERTIFICATE OF TDS EXTENDED TO
1/4/2010
|
DATE WAS
1/4/2008
|
ST |
THRESHOLD LIMIT
|
NO SERVICE TAX ON SERVICE PROVIDERS WHOSE ANNUAL TAXABLE SERVICES ARE LESS THAN RS 10 LACS
|
NO SERVICE TAX ON SERVICE PROVIDERS WHOSE ANNUAL TAXABLE SERVICES ARE LESS THAN RS 8 LACS
|
CTT |
COMMODITIES TRANSACTION TAX
|
0.017% PAYABLE BY THE SELLER
|
NOT AVAILABLE
|
BCTT |
BANKING CASH TRANSACTION TAX
|
REMOVED
|
PAYABLE ON CASH WITHDRAWALS
|
|
|
|
|