3. What is TAX
Taxes represent the amount of money we pay to the
Government at predefined rates and periodicity. Taxes are
the basic source of revenue to the Government using which it
provides various kinds
of services to the tax payers
4. Direct
Taxes
1-Income tax
2-Wealth tax
3-Capital Gain tax
4-Gift Tax/
Inheritance or Estate Tax
5-Corporate Tax
Indirect
Tax
1-Service Tax
2-Custom Duty
3-Excise Duty
4-Sales Tax and VAT
5-Security Transaction
Tax
5. Direct
Central Board of Direct Taxes
(CBDT)
Indirect
Central Board of Excise and Customs
(CBEC).
Types of
TAXES
6. Tax Deducted at Source(TDS)
1 Income whosoever is earning above
a
tax minimum amount (tax
exemption
limit) has to pay income tax
Direct Tax
7. Direct Tax
2 Wealth
tax
This is in addition to the income
tax and is levied if your net
wealth exceeds Rs 30 Lakh at
the rate of 1% on the amount
exceeding Rs 30 Lakh
Assests subjected to WEALTH TAX
• Commercial buildings and the nearby land
• Jewellery, furniture, utensils, and other articles
• Residential buildings and the nearby land
• Cash in hand assets - (a) For individuals and HUFs any amount over INR 50
thousand, and (b) for others any cash amount that has not been recorded in
accounts. Motor cars – cars operated on hire or on a stock-in-trade basis will
be exempted from taxes
2012-13– Rs 866crores
2013-14– Rs 950crores
8. Direct Tax
3 CAPITAL
GAIN TAX
This is levied on the capital gains
arrived by selling property and stocks.
Tax rates are different for long term
and short term capital gains.
9. Direct Tax
4 Gift
Tax
Amount exceeding Rs. 50000
received without consideration by
an individual/HUF from any person
is subjected to gift tax as income
under “other sources”.
• There are exemptions like money received from relatives
is not taxable
• Any amount received as Wedding Gift is not taxable
• No tax on the amount received through WILL or
Inheritance
10. Direct Tax
5 Corporate
Tax
Companies operating in India
are taxed as per the corporate
tax rate on their income. This
tax is one of the major sources
of revenue for government
11. Indirect Tax
1 Service
Tax
Service providers in India are subject to
service tax, which is charged on the
aggregate amount received by the service
provider. Services like leasing,
internet/voice, transport, etc are subject to
service tax
13. Indirect Tax
3 Excise
Duty
Excise duties are indirect
taxes which are levied on
goods manufactured in
India for domestic
consumption
14. Indirect Tax
4
Sales Tax
& VAT
Sales tax is levied by the government on
sale and purchase of products in Indian
market. As customers, whatever you
buy from the market, you pay sales tax
on it. . Now, sales tax is supplemented
with new Value Added Tax so as to make
it uniform across country.
15. Indirect Tax
5
Security
Transaction Tax
(STT)
STT is levied on transactions
(sale/purchase) done through the
stock exchanges. STT is applicable
on purchase or sale of various
financial products like stocks,
derivatives, mutual funds etc
16. Defects in tax system
Limited coverage of direct taxation
More reliance on Indirect Taxes
Inequitable and hence regressive
Non-Productive, irrational, inconsistent nature of
tax system
17. Defects in tax system
Uncertainty in tax rates
Inelastic nature i.e. tax revenue does not change with
change in income
Multiplicity of Taxes, hence Uneconomical
Complex nature of taxes hence difficult to understand for a
common person
Tax laws open for different interpretation
18. Effects of complex tax system
• People are naturally inclined to evade tax
• As percentage of tax overheads is higher, business and
industry sector gives more focus on tax management rather
than carrying out R & D activities and maintaining quality
standards.
• Negative impact on creativity and innovativeness of the work
force
• Ever-thinning employment creation potential of the Industry,
(with frightening increase in unemployment levels)
• Total dependence on imported know-how and technology
19. Effects of complex tax system
• Invasion of the Indian market by foreign industries
• Increasing import-export trade gap
• Inability of the government to respond effectively to natural
and man-made calamities like flood, draught, war etc., due
to poor revenue base
• Indirect promotion of anti-social businesses and industries like
liquor, cigarette, tobacco, lottery etc. Very high excise duties
levied on these products make them guaranteed revenue
sources, hence can not be banned
• Creation of a huge amount of black money (money generated due
to tax evasion) resulting in the formation of a parallel economy in
the country
20. Meaning of Agricultural Tax
Tax is a certain amount which have to be paid to
the Government by the individuals. Taxpaid
according to some percentage on the income value of
the individual….
The Agricultural Tax means the tax paid according to
the Agricultural income.
21. continue
Agricultural tax can be levied in a direct form on
income, assets as well as on capitalgains.
Indirect taxes constitute levies on irrigation, drainage,
machinery and equipments. Access levied on acreage
of crops or based on their market value or livestock or
even fisheries can also be termed as a directtax.
22. Need of Agriculture Taxation
• The need for taxing agriculture is more acute in
developing countries because of its higher share in the
GDP. Many nations as a measure of policy exempt
agricultural income and even capital gains throughsale of agricultural land from such
capital gain is re-invested in
tax, provided
the acquisition of
agricultural assets within a stipulated period of time. It
has to be offset however by increasing land taxes
which generally are levied at provincial or locallevels.
23. continue
It will be pertinent to discuss the two most prominent
form of agricultural taxes which are prevalent in most
parts of the world.
1.Income or profits from agricultural operations.
2. Taxes on agricultural assets or property such as
land, livestock, fishing zones etc.
24. Agriculture Income
Agricultural income or profits are calculated on an
annual basis under the accrual system of accounting.
agricultural produce or provision of services
Such income/profits accrue through sale of
like
supply of labor, storage &transportation, processing
etc. Historically though taxes on income/profits have
been levied based on other criteria such as annual
turnover or the cadastral(survey) system where the
revenues/profits are calculated on the area of land, soil
quality, composition of livestock etc.
25. continue
There have been arguments both in favor of and
against imposition of such taxes in differentcountries.
They are listed below.
Proponents of income/profit tax:
1. Increase in prices of agricultural goods and services.
2. Concealment of Income.
3. Increase in government revenue
4. Increase in tax base
5. Better utilization of land resources
26. continue
Opponents of income/profit tax:
1. Assessment can be a tediousjob
2. Not suitable for subsistencefarming
3. Complicated taxation system
4. Farmers will find it burdensome
5. Will reduce employment
6. Reduction in cropping area
27. Asset or property tax in
agricultureAsset or property tax in agriculture is levied on
the following basis:
1. Fixed assessment
2. Fluctuating assessment
3. Fluctuating assessment with a slidingscale
4. Fluctuating assessment with sliding scale forsome
types of crops and livestock and fixed forothers.
