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Prins.

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TAX

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Tax

Direct Tax

Indirect

Tax

Wealth Tax

Custom Duty

Excise Duty

Sales Tax

Service Tax

Income Tax

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Income Tax is a Tax on the Income of an Individual

or an Entity.

Introduced in India in the year 1860.

Discontinued in the year 1873.

Reintroduced in the year 1886.

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Income from all the Sources are added.

Certain Rebates, Deductions, Expenditure, etc., on

account of Life Insurance , Medical Insurance,Saving in PPF, etc. are allowed.

Whole Income is divided into Different Slabs and

Taxed on the bases of Slabs into which it Falls. Progressive Income Taxation i.e. as Income

Increases, the Rate of Tax also Increases.

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General (Both for Men & Women) Tax SlabsIncome Tax Slab (in Rs.) Tax

0 to 2,00,000 Nil

2,00,000 to 5,00,000 10%

5,00,000 to 10,00,000 20%

Above 10,00,000 30%

Tax slabs are different for Men, Women, Senior

Citizen & very Senior Citizen.

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Senior Citizens (Aged 60 years but less than 80 years)

Income Tax Slab (in Rs.) Tax

Up to Rs. 2,50,000 Nil

Rs. 2,50,000 to Rs. 5,00,000 10%

Rs. 5,00,000 to Rs. 10,00,000 20%

Above Rs. 10,00,000 30%

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Income Tax Slab (in Rs.)

Tax

Up to Rs. 5,00,000 Nil

Rs. 5,00,000 to Rs. 10,00,000 20%

Above Rs. 10,00,000 30%

Very Senior Citizen (Above 80 years)

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Rationale for the Corporation Tax is that a Joint

Stock Company has a Separate Entity & thus should

be Taxed separately.

Until 1960-61, Corporations were Taxed in a Partial

Sense.

A Corporation was required to Pay Income Tax onbehalf of Shareholders on Dividends paid to them, &

such Shareholder got a Credit to this effect.

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Since 1960-61, Corporations are being treated as

Independent Entities & Shareholders are not given

any Credit.

Corporations are Taxed at a Flat Rate, but certain

Rebates & Exemptions are also provided.

Tax Rates are different for Indian Companies &Foreign Companies.

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Annual Tax on Wealth was introduced in 1957.

Annual Tax was levied on the Wealth such as Land,

Bonds, Shares, etc. of the people. Certain Types of Properties such as Agricultural

Land & funds in Provident Account were exempt.

Wealth Tax was abolished in 1993 on all assetsexcept certain specified assets such as Resident

House, Farm House, Urban Land, Jewellery,

Bullion, Motor Car, etc.

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Custom Duties are levied on Exports & Imports.

From the point of view of Revenue, Importance of

Export Duty is Limited. Import Duties are levied on the basis of ad valorem.

In Pre-Tax Reform Period, India had become a

country with one of the highest levels of CustomTariffs in the World.

Since 1991, the Custom Duty Structure was pruned.

Maximum Rate of Custom Duty is 10% now.

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Sales Tax is a Tax on Business Transactions.

In India, many commodities are not covered by

Sales Tax. Sales Tax is more in case of Luxury Items & Less or

almost nil in case of necessities.

Registered Trading Concerns are required to pay theSales Tax to the Government who shift the Burden

to the Customers.

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VAT is a multistage Sales Tax with credit for Taxes

paid on Business purchases.

VAT is non-cascading. Tax is levied on Value Addition at each stage of

Transaction in the Production/Distribution Chain.

VAT was introduced in 1999 & was Implemented inApril, 2005 in some States.

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Service Tax is a form of Indirect Tax imposed on

Specified Services called Taxable Services.

It was introduced in the year 1994-95. Service Tax Network has expanded to cover many

Services over the years.

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Thank you

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