The concept of taxing income is a modern innovation and presupposes several things: a

money economy, reasonably accurate accounts, a common understanding of receipts,

expenses and profits, and an orderly society with reliable records. For most of the history
of civilization, these preconditions did not exist, and taxes were based on other factors.
Taxes on wealth, social position, and ownership of the means of production (typically
land and slaves) were all common. Practices such as tithing, or an offering of firstfruits,
existed from ancient times, and can be regarded as a precursor of the income tax, but they
lacked precision and certainly were not based on a concept of net increase.

[edit] Han Dynasty (ancient China)

In the year 10, Emperor Wang Mang of the Xin Dynasty instituted an unprecedented tax
-- the income tax -- at the rate of 10 percent of profits, for professionals and skilled labor.
(Previously, all taxes were either head tax or property tax.) He was overthrown 13 years
later in 23 CE and earlier laissez-faire policies were restored during the Later Han.

Kingdom of Great Britain

Another income tax was implemented in Britain by William Pitt the Younger in his
budget of December 1798 to pay for weapons and equipment in preparation for the
Napoleonic wars. Pitt's new graduated income tax began at a levy of 2d in the pound
(0.8333%) on incomes over £60 and increased up to a maximum of 2s in the pound
(10%) on incomes of over £200 (£170,542 in 2007). Pitt hoped that the new income tax
would raise £10 million (£8,527,100,000 in 2007) but actual receipts for 1799 totalled
just over £6 million (see UK income tax history for more information).[3]

United States

Main article: Income tax in the United States

The first United States income tax was imposed in July 1861, at 3% of all incomes over
800 dollars in order to help pay for the war effort in the American Civil War.[4][5] This tax
was repealed and replaced by another income tax in 1862. [6]

India Income tax slabs 2010-2011 for General tax

payers
Income tax slab (in Rs.) Tax
0 to 1,60,000 No tax
1,60,001 to 5,00,000 10%
5,00,001 to 8,00,000 20%
Above 8,00,000 30%
 India Income tax slabs 2010-2011 for Women
Income tax slab (in Rs.) Tax
0 to 1,90,000 No tax
1,90,001 to 5,00,000 10%
5,00,001 to 8,00,000 20%
Above 8,00,000 30%

India Income tax slabs 2010-2011 for Senior citizen

Income tax slab (in Rs.) Tax
0 to 2,40,000 No tax
2,40,001 to 5,00,000 10%
5,00,001 to 8,00,000 20%
Above 8,00,000 30%

DIRECT TAX

A Direct tax is a kind of charge, which is imposed directly on the taxpayer. The
examples of direct tax include property tax and income tax. Alternatively, it can be said
that a direct tax is one that is taken away from one's salary or wages. When the tax is
imposed by the government upon the property, then it is called property tax, which is also
a direct tax.

In India, all the direct tax related matters are taken care by the Central Board of Direct
Taxes (CBDT), which is a significant division of the Department of Revenue, Ministry of
Finance, Government of India. CBDT is functioning under the Central Board of Revenue
Act 1963. CBDT is responsible for formulating and enforcing direct taxes in India. One
of the vital functions of CBDT is to administer direct taxes law followed by Income Tax
Department.

The tax system in India is primarily demarcated under the control of Central and State
Government. The Central Government is primarily responsible for imposing taxes on
income, custom duties, central excise and service tax. The State Government is
responsible for levying taxes like State Excise, stamp duty, VAT (Value Added Tax),
land revenue and professional tax. The local bodies are also authorized to impose tax on
properties, octroi and many more.

Indirect Tax or the tax that is levied on goods or services rather than on persons or
organizations are of different types in India like Excise Duty, Customs Duty, Service
Tax, and Securities Transaction Tax. In India, there are a series of Tax laws and
regulations in order to control the indirect taxation, which can be either law, made by the
central government or even can be state specific laws. As a result these taxes are an
important part of the total cost. It is thus essential to make appropriate planning for such
costs.

Nearly all of the activities that are subjected to indirect taxation range from
manufacturing to those required for final consumption. Activities related to trading,
imports, and services are also included in this list. As a result Indirect Tax has an impact
on all business lines. At present the Indirect Taxes in India are under a transformation due
to the changing fiscal reforms of the Indian government. Many new acts and laws are
being introduced replacing the old laws and all related issues, which have become
redundant. However, it should be remembered that such new laws while on one hand
would create new opportunities, but also at the same time would lead to a certain extent
of uncertainty and judicial proceedings.

Salaries, Defense, education, Social Security, social services, debt, transportation, energy,

TAX REBATES

After the income is computed as per the provisions of the Income Tax Act, a further
deduction is allowed of certain amount from the tax computed on the income earned by
the assessee under section 80C (External website that opens in a new window) of the act.
This deduction is termed as Tax Rebate.

Rebate is a reduction from income tax liability and not a deduction from income. One can
invest in various ways at the beginning of any financial year, so that the amount of net tax
to be paid is comparatively reduced at the time of filing your returns.

Some of the common tax-saving instruments include General Provident Fund (GPF),
NSC/NSS, Public Provident Fund (PPF), Life Insurance Premium, Employee's Provident
Fund Scheme, etc.

Education Cess Rs. 20.00

Secondary and Higher Education Cess Rs. 10.00
Wealth Tax

Wealth Tax In India

Wealth tax came into existence on 1st April 1957.
Wealth tax is derived from the property owned by the
proprietor. The proprietor needs to pay tax every year
on property owned by them. The residential property
 that does not yield any income to its owner is also
subjected to wealth tax.Wealth tax is termed as most
significant direct tax.
As per the wealth tax act, wealth tax is applicable to the
following:

• An individual person
• A group of people who own a property
• A company or organization
• A Hindu undivided family (HUF)
• Person belongs to 1-by -6 categories
• A representative or heir of a dead person
• Non corporative tax payer

The chargeability of a wealth tax in India for its

residence or foreign citizens are different. Any person
who is resident of India has to pay wealth tax under
his/her name. If owner of property is deceased, heir of
the property is bound to pay the wealth tax of the
property. If a person owns a citizenship of a foreign
country and he/she acquires a property in India as well
as in foreign country. Under those circumstancesthe
property owned by the owner in India is taxable where
as property located outside India is exempted from the
list. All assets and debts outside India are out of the
scope ofWealth Tax Act.

www.tax4india.com