Académique Documents
Professionnel Documents
Culture Documents
Introduction
Before the introduction of e-taxation, have to know about the taxation. What is taxation? The most important source of revenue of the government is taxes. The act of levying taxes is called taxation. A tax is a compulsory charge or payment imposed by government on individuals or corporations. The persons who are taxed have to pay the taxes irrespective of any corresponding return from the goods or services by the government. The taxes may be imposed on the income and wealth of persons or corporations and the rate of taxes may vary. Taxes in India are levied by the Central Government and the state governments. Some minor taxes are also levied by the local authorities such the Municipality or the Local Council. The authority to levy a tax is derived from the Constitution of India which allocates the power to levy various taxes between the Centre and the State. An important restriction on this power is Article 265 of the Constitution which states that "No tax shall be levied or collected except by the authority of law. Therefore each tax levied or collected has to be backed by an accompanying law, passed either by the Parliament or the State Legislature. In 2010-11, the gross tax collection amounted to 7.92 trillion, with direct tax and indirect tax contributing 56% and 44% respectively.
List - I entailing the areas on which only the parliament is competent to make laws, List - II entailing the areas on which only the state legislature can make laws, and List - III listing the areas on which both the Parliament and the State Legislature can make laws upon concurrently.
Separate heads of taxation are is no head of taxation in the Concurrent List (Union and the States have no concurrent power of taxation). The list of thirteen Union heads of taxation and the list of nineteen State heads are given below:
Duties of customs including export duties (List I, Entry 83) Duties of excise on tobacco and other goods manufactured or produced in India except (i) alcoholic liquor for human consumption, and (ii) opium, Indian hemp and other narcotic drugs and narcotics, but including medicinal and toilet preparations containing alcohol or any substance included in (ii). (List I, Entry 84) Corporation Tax (List I, Entry 85) Taxes on capital value of assets, exclusive of agricultural land, of individuals and companies, taxes on capital of companies (List I, Entry 86) Estate duty in respect of property other than agricultural land (List I, Entry 87)
Duties in respect of succession to property other than agricultural land (List I, Entry 88) Terminal taxes on goods or passengers, carried by railway, sea or air; taxes on railway fares and freight (List I, Entry 89) Taxes other than stamp duties on transactions in stock exchanges and futures markets (List I, Entry 90) Taxes on the sale or purchase of newspapers and on advertisements published therein (List I, Entry 92) Taxes on sale or purchase of goods other than newspapers, where such sale or purchase takes place in the course of inter-State trade or commerce (List I, Entry 92A) Taxes on the consignment of goods in the course of inter-State trade or commerce (List I, Entry 93A) All residuary types of taxes not listed in any of the three lists (List I, Entry 97)
10
11
12
13
Land revenue, including the assessment and collection of revenue, the maintenance of land records, survey for revenue purposes and records of rights, and alienation of revenues (List II, Entry 45)
Duties of excise for following goods manufactured or produced within the State (i) alcoholic liquors for human consumption, and (ii) opium, Indian hemp and other narcotic drugs and narcotics (List II, Entry 51)
Taxes on entry of goods into a local area for consumption, use or sale therein (List II, Entry 52)
10
Taxes on the sale or purchase of goods other than newspapers (List II, Entry 54)
11
Taxes on advertisements other than advertisements published in newspapers and advertisements broadcast by radio or television (List II, Entry 55)
12
Taxes on goods and passengers carried by roads or on inland waterways (List II, Entry 56)
13
Taxes on vehicles suitable for use on roads (List II, Entry 57)
14
15
16
Taxes on profession, trades, callings and employments (List II, Entry 60)
17
18
Taxes on luxuries, including taxes on entertainments, amusements, betting and gambling (List II, Entry 62)
19
Any tax levied by the government which is not backed by law or is beyond the powers of the legislating authority may be struck down as unconstitutional.
Income Tax Act Wealth Tax Act Gift Tax Act Expenditure Tax Act Interest Tax Act Various Finance Acts (Passed Every Year in Budget Session)
Income Tax Department is also responsible for enforcing Double Taxation Avoidance Agreements and deals with various aspects of international taxation such as Transfer Pricing.
Finance Bill 2012 seeks to grant Income Tax Department powers to combat aggressive Tax avoidance by enforcing General Anti Avoidance Rules.
Central Board of Direct Taxes The Central Board of Direct Taxes (CBDT) is a part of the Department of Revenue in the Ministry of Finance, Government of India. The CBDT provides essential inputs for policy and planning of direct taxes in India and is also responsible for administration of the direct tax laws through Income Tax Department. The CBDT is a statutory authority functioning under the Central Board of Revenue Act; 1963.It is Indias official FATF unit. The Central Board of Revenue as the Department apex body charged with the administration of taxes came into existence as a result of the Central Board of Revenue Act, 1924. Initially the Board was in charge of both direct and indirect taxes. However, when the administration of taxes became too unwieldy for one Board to handle, the Board was split up into two, namely the Central Board of Direct Taxes and Central Board of Excise and Customs with effect from 1.1.1964. This bifurcation was brought about by constitution of the two Boards u/s 3 of the Central Boards of Revenue Act, 1963. Organisational Structure of the Central Board of Direct Taxes: The CBDT is headed by Chairman and also comprises six members, all of whom are Special Secretary to Government of India.
Member (Income Tax) Member (Legislation and Computerisation) Member (Revenue) Member (Personnel & Vigilance) Member (Investigation) Member (Audit & Judicial)
The Chairman and Members of CBDT are selected from Indian Revenue Service (IRS), a premier civil service of India, whose members constitute the top management of Income Tax Department.
*Up to 2,50,000 (for resident individual of 60 years or above)= 0. * Up to 2,35,000 (for individual female )= 0, *Up to 5,00,000 (for very senior citizen of 80 years or above)= 0. *Education Cess 2% +Secondary and Higher Secondary Education Cess 1% Education cess is applicable (2%+1%)@ 3% on income tax
Service tax
Service tax is a part of Central Excise in India. It is a tax levied on services provided in India, except the State of Jammu and Kashmir. The responsibility of collecting the tax lies with the Central Board of Excise and Customs(CBEC). The ex-Finance Minister of India, Pranab Mukherjee in his Budget speech has indicated the government's intent of merging all taxes like Service Tax, Excise and VAT into a common Goods and Service Tax by the year 2011. To achieve this objective, the rate of Central Excise and Service Tax will be progressively altered and brought to a common rate. In budget presented for 2008-2009 It was announced that all Small service providers whose turnover does not exceed 1,000,000 need not pay service tax.
1. Wealth Tax Act, which has a regular history of being passed and repealed; 2. Service Tax, imposed under Finance Act, 1994, which taxes the provision of services provided by service providers within India or services imported by Indian from outside India; 3. Central Excise Act, 1944, which imposes a duty of excise on goods manufactured or produced in India; 4. Customs Act, 1962, which imposes duties of customs, countervailing duties and antidumping duties on goods imported in India; 5. Central Sales Tax, 1956, which imposes sales tax on goods sold in inter-state trade or commerce in Indi sale of property situated within the State; 6. Entertainment taxes
Now, Service Tax and Excise will be inclusive part of GST in due course of time.
Types of taxes
Direct Tax:- Income tax, corporation tax on companys profits, property tax, capital gains tax, wealth tax etc are examples of direct taxes. Indirect Tax:- It is levied on the expenditure of a person. Excise duty, sales tax, custom duties etc are examples of indirect taxes.
Some conditions
Residential Status
The three residential status, viz.,
Under this category, person must be living in India at least 182 days during previous year or must have been in India 365 days during 4 years preceding previous year and 60 days in previous year. Ordinary residents are always taxable on their income earned both in India and Abroad.
Must have been a non-resident in India 9 out of 10 years preceding previous year or have been in India in total 729 or less days out of last 7 years preceding the previous year. Not residents are taxable in relation to income received in India or income accrued or deemed to be accrued or arise in India and income from business or profession controlled from India.
Non Residents are exempt from tax if accrue or arise or deemed to be accrued or arise outside India. Taxable if income is earned from business or profession setting in India or having their head office in India.
HEADS OF INCOME
The total income of a person is divided into five heads: Income from salaries, Income from house and property, Income from business and profession, Income in the form of Capital gains, and Income from other sources
Meaning of salary Commission Any Any other Taxable Bonus particulars Basic DA salary If terms of at fixed % other commission allowances employment of turnover DA provide & achieved by forming part of employee superannuation benefits Exemption /Deduction in respect of: Compensation Yes No under VRS House rent allowance Employers contribution of RPF Gratuity: Employee not covered by payment of gratuity Gratuity: Yes Yes No Yes No
Yes
Employee covered by payment of gratuity Act Entertainment Yes No allowance :to a government employee Valuation of perquisites Accommodation: Yes No Yes Yes Yes Yes Determining Income under the head salary is exclusive of all benefits or amenities not provided salary limit of by way of monetary payment. specified employee
30% of Net value as repair cost (This is a mandatory deduction) No other deduction available Interest paid or payable on a housing loan against this house
In the case of a self occupied house interest paid or payable is subject to a maximum limit of Rs,1,50,000 (if loan is taken on or after 1 April 1999 and construction is completed within 3 years) and Rs.30,000 (if the loan is taken before 1 April 1999). For l non self-occupied homes, all interest is deductible, with no upper limits. The balance is added to taxable income. Gross annual value (GLV) Rs. Rs.
(a) Annual letting Xxx value(ALV) (a) Actual annual Xxx rent received /receivable Whichever is higher, is GAV Less: municipal taxes paid by the owner Net annual value
The computation of income under the head "Profits and Gains of Business or Profession" depends on the particulars and information available.[6] If regular books of accounts are not maintained, then the computation would be as under: Income (including Deemed Incomes) chargeable as income under this head xxx Less: Expenses deductible (net of disallowances) under this head xxx Profits and Gains of Business or Profession xxx However, if regular books of accounts have been maintained and Profit and Loss Account has been prepared, then the computation would be as under: -
Under section 111A, for shares or mutual funds where STT is paid, tax rate is 10% From Asst Yr 2005-06 as per Finance Act 2004. For Asst Yr 2009-10 the tax rate is 15%. In all other cases, it is part of gross total income and normal tax rate is applicable.
For companies abroad, the tax liability is 20% of such gains suitably indexed (since STT is not paid).
Particulars
Short term capital assets Sale of Sale of bonus Sales of land original shares shares
Sale price, being full value of consideration LESS: permissible deduction 1. Expenses in connection with transfer 2. Cost of acquisitions Short term capitals gain
Cost of acquisitions includes = purchase price +Breakage /legal exp./registration +exp. In connection with purchase+ interest loan advance forfeited.
Particulars
Winning from lottery, horse Winning from owning and race, crossword, puzzle, card maintaining race horses games or gambolling or betting participating in races any other games of any sort. Rs. Xxx Not deductible Rs. Xxx Xxx (revenue expenditure incurred is allowed) Xxx
Taxable income
Xxx
Gross up winning: it is always gross winning which is taxable. Where amount of winning is paid after deduction of tax at source, it is to be grossed up because the amount of tax deducted at sources is a part of income of the assesses. Amount of winning is grossed up in the following manner.
Deduction
While exemptions is on income some deduction in calculation of taxable income is allowed for certain payments.
Contribution to Provident Fund or Public Provident Fund. PPF provides 8.8% return compounded annually. Maximum limit to contribute in it is 100,000 for each year. It is a long term investment with complete withdrawal not possible till 15 years though partial withdrawal is possible after 5 years. The interest earned on PPF investments is not taxable.
Besides, there is employee provident fund which is deducted from the salary of the person. This is about 10% to 12% of the BASIC salary component. Recent changes are being discussed regarding reducing the instances of withdrawal from EPF especially when one changes the job. EPF has the option of full settlement on leaving the job, taking VRS,
retirement after 58. It also has options of withdrawal for certain expenses related to home, marriage or medical. EPF contribution includes 12% of basic salary from employee and employer. It is distributed in ratio of 8.33:3.67 in Pension fund and Providend fund
Payment of life insurance premium. It is allowed on premium paid on self, spouse and children even if they are not dependent on father or mother. Investment in pension Plans. National Pension Scheme is meant to save money for the post retirement which invests money in different combination of equity and debt. depending upon age up to 50% can go in equity. Annuity payable after retirement is dependent upon age. NPS has six fund managers. Individual can make minimum contribution of Rs6000/- . It has 22 point of purchase (banks). Investment in Equity Linked Savings schemes (ELSS) of mutual funds. Among other investment opportunities, ELSS has the least lock-in period of 3 years. However, one should note that after the Direct Tax Code is in place, ELSS will no longer be an investment for 80C deduction. Investment in National Savings Certificates (interest of past NSCs is reinvested every year and can be added to the Section 80 limit) Tax saving Fixed Deposits provided by banks for a tenure of 5 years. Interest is also taxable. Payments towards principal repayment of housing loans. Also any registration fee or stamp duty paid. Payments towards tuition fees for children to any school or college or university or similar institution (Only for 2 children) Post office investments
The investment can be from any source and not necessarily from income chargeable to tax.
Refund Status
State Bank of India (SBI) is the refund banker to the Indian Income Tax Department (ITD). Your tax refund details are sent to SBI, by the Income tax department. Then SBI will process the refund, and send you the refund intimation. While filing your return you can choose any one of the two Refund modes ECS or Paper(cheque). The refund status can be checked online at the NSDL site
3. Then select your e-tax type either state government tax or direct tax or indirect tax.
If you are paying the excise and service tax under indirect tax then, just follow that
CBEC has changed the process for payment of Excise & Service Tax. Login to https://cbec.nsdl.com and select E-Payment (Excise & Service Tax). Key in your Assessee Code, select the type of payment, accounting codes and select State Bank of India from the list of banks for payment.
If you are paying the customs under indirect tax then just follow that
1. In a new browser window enter the URL, https://epay.icegate.gov.in (You can also click the Indirect Taxes (Customs) hyperlink in the OnlineSBI eTax banner in the Home Page). You are displayed Customs e-payment Gateway. 2. Select e-payment under services. 3. Provide your Import-Export code or the login credentials given by ICEGATE. 4. Select e-Payment. You are displayed the list of your unpaid challans. 5. Click on Pay against the challan you wish to make a payment for. 6. Select State Bank of India from the list of Banks. You will be redirected to the OnlineSBI login page. 7. Enter your Internet Banking user ID and password to login. 8. Proceed to select the account from which you wish to pay tax. 9. On successful processing of your transaction, you are provided a link to print the ereceipt for the payment. 10. Once your transaction is complete, you are redirected to ICEGATE website. If the payment was successfully made for the challan, it will not appear in the list of pending challans in the ICEGATE site.
If you find the challan in the list of pending challans even after making the payment, please click on Verify link appearing against the challan. System will update the status and challan will disappear from the list of pending challans. You can safely repeat this step, if the issue is not resolved. If you are a retail customer you can also generate an e-receipt subsequently in OnlineSBI using the 'Status Enquiry' link in the 'Enquiries' tab. The same is available for corporates in the 'Query by Echeque/Account' link in the 'Reports' tab.
4. Select State Bank of India from the list of banks. You will be redirected to Online SBI login page. 5. Enter your Internet Banking User ID and password. If your credentials are valid, you can proceed to select the account from which you wish to pay tax. 6. On successful processing of your transaction, you are provided a link to print the e-receipt for this payment.
If you are a retail customer you can also generate an e-receipt subsequently in Online SBI using the 'Status Enquiry' link in the 'Enquiries' tab. The same is available for corporate in the 'Query by E-cheque/Account' link in the 'Reports' tab.
Now available 24x 7 tax paying convenience from anywhere through ATMs. eg. Like HDFC Bank, Union Bank, BOB, Axis Bank, Canara Bank, BOM, PNB, Central Bank of India etc.
Disadvantages and barrier of e-taxation: Internet is the main barrier for the e-taxation. In many places, there are not proper advices of bank for the e-taxation. Lack of understanding of Indian civilian but new generation is accepting. They have feared to wrong happened by the online taxation. It creates the generation gap between new and old men. In many places, people dont know about the e-taxation. Only those people can pay e-tax, who carries the online banking.