Presented By Mr P.

K Das

Three-Tier Federal Structure

The Union Government The State Governments The Urban/ Rural Local Bodies

The power to levy taxes and duties is distributed among the three tiers of Governments, in accordance with the provisions of the Indian Constitution

Contd.

Taxes Levied by Central Government

1. Direct Taxes
Tax on Corporate Income Wealth Tax Personal Income Tax Tax Incentives Double Taxation Avoidance Treaty

2. Indirect Taxes
Excise Duty Customs Duty Service Tax

Taxes Levied by State Government

Sales Tax Stamp Duty

State Excise Duty

Land Revenue Duty on Entertainment Tax on Professions & Callings.

Taxes Levied by Local Bodies

Tax on properties

Octroi

Tax on Markets and Tax/User Charges for utilities like water supply, drainage, etc.

PERSONAL TAXATION
No additional exemption limit for Female Taxpayer New category of Very senior citizen introduced eligible for higher exemption limits of Rs 5,00,000

Age criterion for senior citizens to be relaxed from 65 years to 60 years.

Basic exemption limit for senior citizens to be increased from Rs.2,40,000 to Rs.2,50,000

Income Slab

Rates as per Budget

Upto Rs1,80,000
Rs1,80,000 5,00,000 Rs5,00,000 8,00,000

Exempt
10 Percent 20 percent

Rs Above 8,00,000

30 Percent

Deduction under Chapter VI

Deduction under Section 80C
The total limit under this section is Rs 1 lakh.
Qualifying Investments
Provident Fund (PF) & Voluntary Provident Fund (VPF) Public Provident Fund (PPF) Life Insurance Premiums

Equity Linked Savings Scheme (ELSS)

Home Loan Principal Repayment Stamp Duty and Registration Charges for a home National Savings Certificate (NSC)

Pension Funds
5-Yr bank fixed deposits (FDs) 5-Yr post office time deposit (POTD) scheme Unit linked Insurance Plan

Deduction under Section 80CCF

Deduction in respect of Infrastructure Bond is allowed subject to ceiling of Rs 20000

Deduction under Section 80D

Any Premium which is paid for medical insurance that has been taken on the health of the assessee, his spouse, dependent parents or dependent children, is allowed as a deduction, subject to a ceiling of Rs 15,000.

Where any premium is paid for medical insurance for a senior citizen, an enhanced

deduction of Rs 20,000 is allowed. The deduction is available only if the premium is paid
by cheque

Deduction under Section 80E

The deduction under section 80E is available to an individual if following conditions are satisfied: 1. Deduction available only to Individual not to HUF or other type of Assessee. 2.Deduction amount: The amount of interest paid is eligible for deduction and moreover there is no cap on the amount to be deducted. You can deduct the entire

interest amount from your taxable income. However there is no benefit available on the
repayment of principal amount of the loan.

Deduction under Section 80DDB

An individual, resident in India spending any amount for the medical treatment of specified diseases affecting him or his spouse, children, parents, brothers and sisters and who are dependant on him, will be eligible for a deduction of the amount actually

spent or Rs 40,000, whichever is less

For any amount spent on the treatment of a dependent senior citizen an individual is
eligible for a deduction of the amount spent or Rs 60,000, whichever is less is available.

Deduction under Section 80U

It is deduction in the case of a person with a disability. An individual who is suffering from a permanent disability or mental retardation as specified in the persons with disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 or the

National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation
and Multiple Disabilities Act, 1999, shall be allowed a deduction of Rs 50,000. In case of severe disability it is Rs. 75,000

Deduction under Section 24

Whenever you take a housing loan to build or buy a new home, the interest payable on this home loan is eligible for income tax deduction. Maximum deductible amount, i.e under section 24 is Rs. 1,50,000.

CORPORATE TAX
Tax Rate
Category Income Tax Surcharge MAT Existing Rates 30 percent 7.5 Percent Levied at 18 Percent of Book Profit New Rates 30 percent 5 Percent Levied at 18.5 Percent of Book Profit

Dividend Distribution Tax

15 percent

15 percent

CorparateTax on Foreign Companies are levied @ 40 Percent Plus Surcharge of 2 Percent

Tax Deduction At Source

Section Nature of Payment Existing Limit 5,000 2,500 20,000 50,000 5,000 2,500 1,20,000 20,000 Proposed Limit 10,000 5,000 30,000 75,000 20,000 5,000 1,80,000 30,000 Rate

194B 194BB 194C 194C 194D 194H 194I 194J

Winning from Lottery or Cross word puzzle Winning from Horse Race Payment to Contractors [per Transaction] Payment to Contractors [Annual Limit] Insurance Commission Commission or Brokerage Rent Fees for Professional and Technical Services

30 30 2,1 2,1 10 10 10 10

Wealth Tax
Wealth tax is charged for every assessment year in respect of net wealth of corresponding valuation date at the rate of one per cent of the amount by which net wealth exceeds Rs. 30 lakhs

The following assets are subjected to wealth tax:

Guesthouse, farm-house, commercial complex, shopping mall and residential complex are subjected to the wealth tax. Valuable items like jewelry and any items made up of precious metals like gold, silver, platinum or any other precious metals. Aircrafts, yachts, boats that is used for non-commercial purpose Cash in hand that is more than 50,000, for individual and Hindu undivided families. Any cash that is not recorded on the account log book is subjected to the wealth tax. Motor car that is owned by an individual. Any urban land situated in the jurisdiction where there is a total population of ten thousand as per last census is subjected to the wealth tax.

Excise Duty

Manufacture of goods in India attracts Excise Duty under the Central Excise act 1944
and the Central Excise Tariff Act 1985. Herein, the term Manufacture means bringing into existence a new article having a distinct name, character, use and marketability and includes packing, labeling etc. Most of the products attract excise duties at the rate of 10%. Excise duty is levied on advalorem basis or based on the maximum retail price in some cases

Small Scale Sector is exempted from payment of excise duty from annual production up to Rs.1.5Crore

Impact Of The Recent Changes In Our Case

Sl 1

Item Coal

Chapter Heading 27

Existing Duty Nil

New Rate 5

condition With Cenvat credit

Coke

27

Nil

With Cenvat credit

Fly Ash

26

Nil

With Cenvat credit

Option to pay Excise duty @ 1percent is also available without utilization of Cenvat Credit

Customs Duty

The levy and the rate of customs duty in India are governed by the Customs Act 1962 and the Customs Tariff Act 1975. Imported goods in India attract basic customs duty,

additional customs duty and education cess. The rates of basic customs duty are
specified under the Tariff Act. The peak rate of basic customs duty has been is 7.5% for industrial goods. Additional customs duty is equivalent to the excise duty payable on similar goods manufactured in India

EXPORT DUTY The export duty on iron ore lumps and fines has been enhanced from 15% and 5% respectively to a uniform rate of 20%. Full exemption from export duty has been provided to iron ore pellets.

Service Tax

Service tax is levied at the rate of 10% (plus 3% education cess) on certain identified taxable services provided in India by specified service providers. The Cenvat Credit Rules allow a service provider to avail and utilize the credit of additional duty of customs/excise duty for payment of service tax. Credit is also provided on payment of service tax on input services for the discharge of output service Tax liability

Service Tax on Which Credit is Not Allowed

Goods used for construction have been excluded from inputs while construction services, work contract service, and other specified services in so far as they are used for construction have been kept out of the purview of input services

Services relating to , motor vehicles and personal use or consumption of employee will not be eligible for Cenvat credit

Central Sales Tax

CST is 2% on manufactured goods against statutory declaration forms otherwise at the rate prevailing under VAT

Value Added Tax

VAT is a multi-point destination based system of taxation, with tax being levied on value addition at each stage of transaction in the production/ distribution chain. The term 'value addition' implies the increase in value of goods and services at each stage of production

or transfer of goods and services. VAT is a tax on the final consumption of goods or
services and is ultimately borne by the consumer

There are four slabs of VAT

0% for essential commodities
1% on bullion and precious stones 4% on industrial inputs and capital goods and items of mass consumption All other items 13.5%

Petroleum products, tobacco, liquor etc, attract higher VAT rates that vary from State to State. This is normally up to 20%

Entry Tax
The levy and the rate of Entry Tax in Orissa are governed by the Orissa Entry Tax Act 1999. There shall be levied and collected a tax on entry of the scheduled goods into a

local area for consumption, use or sale therein at such rate of the purchase value of
such goods from such date as may be specified by the State Government and different dates and different rates may be specified for different goods and local areas subject to such conditions as may be prescribed. The tax leviable under this Act shall be paid by every dealer in scheduled goods or any other person who brings or causes to be brought into a local area such scheduled goods whether on his own account or on account of his principal or customer or takes delivery or is entitled to take delivery of

such goods on such entry

Emerging New Tax Regime

Proposed Changes in DTC

Definition of Residential Status has been amended to cover only 2 category Resident and Non Resident

Increase in medical reimbursement limit from ` 15,000 to 50,000

No additional exemption limit for Female Taxpayer Income Slab Upto Rs 2,00,000 Rs 2,00,000 5,00,000 Rs 5,00,000-10,00,000 Rates as per DTC Exempt 10 Percent 20 percent

Rs Above 10,00,000

30 Percent

Aggregate deductions for long term eligible savings along with tuition fees paid proposed to be increased from Rs1lakh to Rs 3lakhs including interest on house loan

What Is GST

GST (Goods & Services Tax) is a domestic consumption tax applicable alike

on all goods and services. It will eliminate the differential treatment of the
manufacturing and service sector. It shall be a multi-stage tax where the ultimate burden shall lie on the consumer.

The dealer shall charge GST on output and pay GST on inputs. Difference of Output GST and input GST shall be payable as tax. Thus tax is payable only on Value addition with no cascading effects.

There will be Dual GST Model

1. Central GST (CGST) 2. State GST(SGST)

Various laws that get subsumed in GST State Level Taxes

VAT on sale of goods and deemed sales Lotteries / Betting/ Gambling Stamp Duty Vehicle Tax / Road Tax / Passenger Tax / Toll Tax Electricity Tax Property Tax Entry Tax / Purchase Tax, Octroi Luxury Tax on services in Hotel and Restaurants. Entertainment Tax Cess and Surcharge

Various laws that get subsumed in GST

Central Taxes
Customs Duty on Imports

Central Excise Duty and Additional Excise Duty

Additional Customs Duty (CVD) Service Tax on rendering of services

Central Sales Tax on Interstate sales

Cess and Surcharges