By :

Paresh ]a!n
97269 24365
pareshjain1991@gmail.com

why govt. charges tax

Govt. of India provides many kind of services to its resident people or to

the non-residents such as infrastructure facility, security etc. and
moreover a place where people can earn and live.
In providing these facilities govt. incurs a huge amount of expenditure and
to meet those expenditures, Govt. needs funds and there is no specific
source from which govt. can generate revenue.
Therefore, we can say tax is a fees charged by the govt. against the
services provided.
Govt. major source of revenue is tax (Direct tax and Indirect tax)

CONSTITUTION
Constitution of India is the supreme law i.e. all other law in India has
to be consistent with the constitution and if it is not constitutionally
valid, it cant be said a legal law.
Article 246 and 248 and schedule vii of the constitution distributes the
power to impose and collect taxes between the central govt. and state
govt.
15th August 1948 Independence Day on day India Achive Independence.
26th January 1950 Republic Day on day Constitution of india comes
into force as governing document india.

Slab
(Individual/HUF/AOP/B
OI/AJP)
(Below 60 Year)

Tax
rate+
3%Educ
ation
Cess

Up to 2.5 Lakhs

0%

2,50,001 to 5 Lakhs

10%

5,00,000 to 10 Lakhs
Above 10 Lakhs

(A) Tax

(B) Tax
Slab
(Individual/HUF/AOP/B
OI/AJP)
(60 year and above
i.e. Senior Citizens)

Tax
rate+
3%Educ
ation
Cess

Up to 3.0 Lakhs

0%

3,00,001 to 5 Lakhs

10%

20%

5,00,001 to 10 Lakhs

20%

30%

Above 10 Lakhs

30%

(C) Tax Slab

(Individual/HUF/AOP/BOI/A
JP)
(80 year and above i.e.
Very Senior Citizens)

Tax
rate+
3%Educ
ation
Cess

(D) Tax Slab

Partnership/Local
Authority)

Tax
rate+
3%Educ
ation
Cess

On the whole of total income

30%

(Firm/Limited Liability

(E) Tax Slab

Tax
rate+
3%Educ
ation
Cess

Up to 5 Lakhs

0%

Co-operative Society

5,00,001 to 10 Lakhs

20%

Up to 10000

10%

10,001 to 20,000

20%

Above 20,000

30%

Above 10 Lakhs

30%

(F) Tax Slab

(Company)

Tax rate+ 3%Ed. Surchage

Cess

Domestic Company

30%

5 % if total income
exceeds to Rs. 1 crore

Foreign Company (other than

Domestic Company)

40%

2 % if total income
exceeds to Rs. 1 crore

 All revenue receipts are taxable unless specifically exempted and All capital
receipts are exempt unless specifically taxable.
Income tax act gives inclusive definition of Income and includes
(i) Profits and gains
(ii) Capital gains
(iii) Dividend income
(iv) Capital gains
(v) Winning from lotteries etc.
(vi) Allowances and perquisites etc.

 Generally, Income from transfer of the revenue generating asset (i.e. the
right which generates income) will be capital receipt and income from the
product arises out of that asset will be revenue receipt.
for Eg.
1. Income from sale of shares will be capital income and
dividend income arises out of it will be revenue income.
2. Income from transfer of house property will be capital income and rental
income arises out of it will be revenue income.
3. Income from transfer of machine will be capital income and sale of
product arises out of machine will be revenue income.
4. Compensation on voluntary retirement compensation is capital income
and salary income is revenue income.

As per golden rule of income tax we can conclude that all receipts are not assessable to
tax. All receipts by an assessee can not necessarily be deemed to be the income of the
assessee for the purpose of the income tax and the question whether any particular
receipt is income or not depends on the nature of the receipt and scope read with
residential status of person.
1. Income may be in cash or in kind.
2. Illegal incomes are also subject to tax.
3. Income must come from outside
4. Contingent income will not form part of income.
5. Method of accounting is only applicable for PGBP and IOS income. For other
heads of income act provides specific charging section.

A. Detrmination of Residential Statuts

B. Heads of Income
1.) Income from Salary
XXX
2.) Income from House Property
XXX
3.) Income from Business/Profession
XXX
4.) Income from Capital Gains
XXX
5.) Income from Other Sources
XXX
C. GROSS TOTAL INCOME (Sec. 14)
XXX
Less:Deductions u/s chap-VI-A (Sec.80C to 80U)
(XXX)
D. TOTAL INCOME [Sec.2(45)]
E.Tax Due (As Per Slab)
Less:Rebates and Reliefs u/s Chap-VIII
F. Tax Payable

XXX
XXX
(XXX)
XXX

India : includes(i) The territory of India (it means the land mass of India and
Territorial waters/EEZ means the sea area.)
(ii) Its territorial waters and an area of exclusive economic zone.
Income tax : The direct tax paid by the person whose income is
more than maximum exemption limit prescribed
Income Tax Return : Annual statement of income received and
taxes paid in Previous F.Y.
Assessee : person by whom tax, penalty, interest etc. payable
under Income Tax Act 1961.
Financial Year : 1st April to 31st March

 Asssessment year : Year following F.Y. in which assessment of

Income & tax is made
Previous year : the financial year immediately preceding the
assessment year.
Person : includes seven kinds of persons as below:1. Individual (Individual means a natural person i.e. a male,
female, minor, idiot or lunatic)
Analysis- However the income of a minor is generally included in
the income of parent. Assessment of Lunatic or idiot is done
through representative assessee.
2. Hindu undivided family (HUF) - HUF has not been defined
under the act however it means a family which consist of all
persons lineally descended from a common ancestor. (for ex- joint
family business)
3. Company - Company includes both Indian company as well as
foreign company.

4. Firm - Firm means partnership firm (including limited liability partnership

firm) but there must be a partnership deed to assess the income in the name of a
firm.
5. Association of persons(AOP) : If a group of persons Works together
voluntarily without any partnership deed then it will be called As AOP.
6.Body of individuals(BOI) : If a group of individuals works together By
operation of law without partner
7. Local authority - Local authority means a authority which is responsible for
the local maintenance of a place falls under his jurisdiction For eg.- Municipal
committee of Delhi (MCD), Panchayat, and cantonment board etc.
8. Artificial juridical person (AJP) -Artificial juridical person means a person
which is not natural but is a legal person in the eyes of law (ICSI, Delhi
University etc.)

PAN CARD : it is issued by the Indian Income Tax department for the purpose of
financial identification and Permanent Account Number (PAN), as the name suggests,
is a permanent number and does not change during lifetime of PAN holder.
Form 16 : This form carries details of Salary Income and Income tax deducted by
employer.
Form 16A : The certificate that mentions TDS on income from sources other than
salary.
Form 26AS : Annual Tax statement on Tax information network of Income tax
department.
Form 15G : Declaration under section 197A(1) and section 197A (1A) of the
Incometax Act, 1961 to be made by an individual or Person (not being a company or
firm) claiming certain receipts without deduction of tax.
Form 15H : Declaration under section 197A(1C) of the Income tax Act, 1961 to
be made by an individual who is of the age of sixty years or more claiming certain
receipts without deduction of tax.

FORM- 1,2A,2,3,4,4S
For Individuals, HUF
Select appropriate
Income Tax Return
(ITR) Preparation
Software

ITR-1

ITR-2A

ITR-2

ITR-3

ITR-4

ITR-4S

Individ
ual

Individual
& HUF

Individual
& HUF

Individual
& HUF

Individual
& HUF

Individual
& HUF

(Who is a
partner in
firm)
1 Income from

Salary/Pension

2 Income from Other

Sources (only
Interest income or
Family Pension)
3 Income/Loss from

Other Sources
4 Income/Loss from

House Property
5 Capital Gains/Loss

on sale of

FORM- 5,6,7
For Association of Persons (AoP), Body of Individuals (BoI), Local Authority, Companies, Trusts,
Fringe Benefit Tax (FBT) Return
Select appropriate Income Tax Return
(ITR) Preparation Software

1.

Any Income

ITR-5

ITR-6

ITR-7

Firms, AoP,
BoI, LA,AJP,
Co operative
Bank & society.

Companies (Except u/s

25Companies).

Trusts

E-ffilling process

Advance tax
Tax is Paid in Advance when Tax Liability is More than 10,000.
Advance Tax is Paid in the Previous Year Itself, Thus the Tax is Paid in the year
of Earning Income Itself
The Tax is Paid as income is earned
This Scheme of Advance Payment of Tax is also Called as Pay as you earn
income
PAYMENT OF ADVANCE TAX
Due Date for Payment

Advance tax amount to be paid till date

(Other than Company)

(Company)

15/06/2015.

NIL

15% of assessed tax

15/09/2015.

30% of assessed tax

45% of assessed tax

15/12/2015.

60% of assessed tax

75% of assessed tax

15/03/2016.

100% of assessed tax

100% of assessed tax

Tax deduct at Sources (tds)

TDS is one of the modes of collection of taxes, by which a certain percentage of amounts
are deducted by a person at the time of making/crediting certain specific nature of payment to
the other person and deducted amount is remitted to the Government account.
The concept of TDS envisages the principle of "pay as you earn".
It facilitates sharing of responsibility of tax collection between the deductor and the tax
administration.
Every person responsible for making payment of nature covered by TDS provisions of
Income Tax Act shall be responsible to deduct tax.
Every deductor is required to obtain a unique identification number called TAN (Tax
Deduction Account Number) which is a ten digit alpha numeric number e.g.DELH90468K.
Use correct form to file TDS/TCS Returns They are:
Form 24Q :- For salaries
Form 26Q :- For non salaries
Form 27EQ :- For TCS
Form 27A/27B :- Control sheet for electronic TDS/TCS

Use challan no. 281 for depositing TDS amount.

The process of filing of e-TDS /e-TCS returns is available in detail at
following websites www.incometaxindia.gov.in or http://tin-nsdl.com.

TAX DEDUCTED AT SOURCE (TDS)

Period
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Jan-15
Feb-15
Mar-15

Due Date for

Payment
07/05/2015.
07/06/2015.
07/07/2015.
07/08/2015.
07/09/2015.
07/10/2015.
07/11/2015.
07/12/2015.
07/01/2016.
07/02/2016.
07/03/2016.
07/04/2016.

Due Date for

Return

Interest Rate

Interest calculated from

Penalty for Late Filing

15/07/2015.

15/10/2015.
1.5% p.m.
15/01/2016.

15/05/2016.

Date of Deduction
OR
Date of Payment
Whichever is earlier.

Rs.. 200 per day till the

return is filed
or
maximum upto TDS
amount

service tax
Service Tax is a tax imposed by Government of India on services provided in India.
The service provider collects the tax and pays the same to the government.
It is charged on all services except the services in the negative list of services.
The current rate is 14.36% on gross value of the service.
SERVICE TAX (ST)

Period
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Jan-15
Feb-15
Mar-15

Due Date for Payment Due Date for Payment Due Date for Interest Rate
(Other than Company)
(Company)
Return

05/07/2015.

05/10/2015.

05/01/2016.

31/03/2016.

05/05/2015.
05/06/2015.
05/07/2015.
05/08/2015.
05/09/2015.
05/10/2015.
05/11/2015.
05/12/2015.
05/01/2016.
05/02/2016.
05/03/2016.
31/03/2016.

Interest
calculated
from

18%p.a. who
is liable for
25/10/2015. Audit
&
15%p.a. who
is not liable for
25/04/2016. Audit
(Daywise
Interest)

From the Due

Date of
payment

Penalty for
Late Filing
Upto 15 days
Rs..500/-Upto
30 days
Rs.1000/&
thereafter
Rs..100/- per
day,
Maximum of
Rs..20,000/-

Value added tax (vat)

A value added tax (VAT) is a form of consumption tax.
It is to be levied as a proportion of the value added (i.e. sales minus purchase).
VAT will have four broad type of rates.
a) 0% (Exempted) for unprocessed agricultural goods, and goods of social importance.
b) 1% for precious and semiprecious metals.
c) 4% for inputs used for manufacturing goods, capital goods and other essential items.
d) 20% for demerit/luxury goods.
e) The rest of the commodities are taxed at a revenue neutral rate of 12.5%.
VAT & CST
Period

Due Date (Monthly)

Apr-13
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Jan-14
Feb-14
Mar-14

21/05/2013.
21/06/2013.
21/07/2013.
21/08/2013.
21/09/2013.
21/10/2013.
21/11/2013.
21/12/2013.
21/01/2015.
21/02/2015.
21/03/2015.
21/04/2015.

Due Date
(Quarterly)

Due Date
(Half-Yearly)

Interest Rate

Interest
calculated
from

Penalty for
Late Filing

15% p.a.
(Day-wise
Interest)

From the Due

Date of
Payment

Rs..5000/- Per
Return (i.e.
Vat & CST
Separately)

21/07/2013.
30/10/2013.
21/10/2013.

21/01/2015.
30/04/2015.
21/04/2015.

TAX STRUCTURE IN INDIA

(understand with some daily routine questions/answers)
1)Qus. : What are you doing?
Ans. : Business. Tax : PAY PROFESSIONAL TAX!
2) Qus. : What are you doing in Business?
Ans. : Selling the Goods. Tax : PAY SALES TAX!!
3) Qus. : From where are you getting Goods?
Ans. : From other State/Abroad Tax : PAY CENTRAL SALES TAX, CUSTOM DUTY
& OCTROI!
4) Qus. : What are you getting in Selling Goods?
Ans. : Profit. Tax : PAY INCOME TAX!
5) Qus. : How do you distribute profit ?
Ans : By way of dividend Tax : Pay dividend distribution Tax
6) Qus. : Where you Manufacturing the Goods?
Ans. : Factory. Tax : PAY EXCISE DUTY!
7) Qus.. : Do you have Office / Warehouse/ Factory?
Ans. : Yes Tax : PAY MUNICIPAL & FIRE TAX!

8) Qus. : Do you have Staff?

Ans. : Yes Tax : PAY STAFF PROFESSIONAL TAX!
9) Qus. : Doing business in Millions?
Ans. : Yes Tax : PAY TURNOVER TAX! Ans : No Tax : Then pay Minimum Alternate Tax
10) Qus. : Are you taking out over 25,000 Cash from Bank?
Ans. : Yes, for Salary. Tax : PAY CASH HANDLING TAX!
11) Qus.: Where are you taking your client for Lunch & Dinner?
Ans. : Hotel Tax : PAY FOOD & ENTERTAINMENT TAX!
12) Qus.: Are you going Out of Station for Business?
Ans. : Yes Tax : PAY FRINGE BENEFIT TAX!
13) Qus.: Have you taken or given any Service/s?
Ans. : Yes Tax : PAY SERVICE TAX!
14) Qus.: How come you got such a Big Amount?
Ans.. : Gift on birthday. Tax : PAY GIFT TAX! 15) Qus.: Do you have any Wealth? Ans. :
Yes Tax : PAY WEALTH TAX!
16) Qus.: To reduce Tension, for entertainment, where are you going?
Ans. : Cinema or Resort. Tax : PAY ENTERTAINMENT TAX!

17) Qus.: Have you purchased House?

Ans. : Yes Tax : PAY STAMP DUTY & REGISTRATION FEE !
18) Qus.: How you Travel?
Ans. : Bus Tax : PAY SURCHARGE!
19) Qus.: Any Additional Tax?
Ans. : Yes Tax : PAY EDUCATIONAL, ADDITIONAL EDUCATIONAL &
SURCHARGE ON ALL THE CENTRAL GOVT.'s TAX !!!
20) Qus.: Delayed any time Paying Any Tax?
Ans. : Yes Tax : PAY INTEREST & PENALTY!
21) Qus.: Indian : Can I Die Now ?
Ans. : Wait, we are about to launch the funeral tax!!!

Thank
YoU

Paresh ]a!n
97269 24365
pareshjain1991@gmail.com