TOPIC

SOURCES OF REVENUE RECEIPTS

GOVERNMENT OF INDIA

SOURCES

OF

REVENUE

BUDGETBudget is a financial statement showing expected receipts &

proposed expenditure of the government.

STRUCTURE OF GOVERNMENT

BUDGET

GOVERNMENT BUDGET

BUDGET EXP.

BUDGET RECEIPTS

REVENUE EXP.

TAX RECEIPT

REVENUE RECEIPT

CAPITAL EXP.

CAPITAL RECEIPT

NON-TAX RECEIPT

DIRECT TAX

INDIRECT TAX

RECOVERY OF LOANS

BORROWING

BUDGET RECEIPTS

REFERS TO ESTIMATED MONEY RECEIPTS OF THE GOVERNMENT FROM ALL SOURCES DURING THE FISCAL YEAR.

BUDGET RECEIPTS

REVENUE RECEIPTS

CAPITAL RECEIPTS

REVENUE RECEIPT• THESE RECEIPTS DO NOT CREATE A

LIABILITY FOR THE GOVT AND RESULT IN NO REDUCTION IN ASSETS OF THE GOVERNMENT.

• COMPRISE INTEREST AND DIVIDENDS ON INVESTMENT MADE BY THE GOVT REVENUE RECEIPTS ARE PART OF GOVTS TOTAL CASH INFLOW.

CHARACTERISTICS OF REVENUE RECEIPTS

• DO NOT CREATE ANY LIABILITY FOR THE GOVT.

• DO NOT CAUSE ANY REDUCTION IN ASSETS OF THE GOVT.

CONSTITUENTS OF REVENUE RECEIPTSCONSTITUENTS OF REVENUE RECEIPTS

A. TAX RECEIPT

INCOME TAX

CORPORATION TAX

ESTATE DUTY

B. NON-TAX RECEIPT

FEES

ESCHEAT

GRANTS / DONATIONS

TAX RECEIPTS• TAX IS A COMPULSORY PAYMENT

TO THE GOVERNMENT BY THE HOUSEHOLD, FIRMS OR OTHER INDUSTRIAL UNITS.

• THE TAX PAYER CANNOT EXPECT ANY SERVICE OR BENEFIT FROM THE GOVERNMENT IN RETURN.

CLASSIFICATION OF TAX RECEIPTS

TAX RECEIPTS

PROGRESSIVE AND

REGRESSIVE TAXES

DIRECT & INDIRECT

TAXES

PROGRESSIVE & REGRESSIVE TAXES

TAXES ARE BROADLY CLASSIFIED AS ‘PROGRESSIVE’ AND ‘REGRESSIVE’ DEPENDING ON THE REAL BURDEN OF TAXATION.

PROGRESSIVE TAX A TAX IS SAID TO BE PROGRESSIVE WHEN RATE OF TAX INCREASES WITH AN INCREASE IN INCOME.

REGRESSIVE TAX: A TAX IS SAID TO BE REGRESSIVE WHEN IT CAUSES A GREATER REAL BURDEN ON THE POORER SECTIONS OF SOCIETY.

DIRECT AND INDIRECT TAXES

DEPENDING ON HOW THE BURDEN OF TAX IS

IMPOSED ON PUBLIC, TAXES ARE CLASSIFIED AS

DIRECT OR INDIRECT TAXES

DIRECT TAXES TAXES WHOSE BURDEN IS BORNE BY

THE PERSON ON WHOM IT IS IMPOSED.EG INCOME TAX

INDIRECT TAXES TAXES WHOSE INITIAL BURDEN OR

IMPACT IS ON ONE PERSON BUT LATER SUCCEEDS IN

SHIFTING THE BURDEN TO ANOTHER PERSON.EG SALES

TAX, VAT, SERVICE TAX

DIRECT TAXES

• CORPORATION TAX. TAX LEVIED ON THE INCOME OF COMPANIES UNDER THE INCOME-TAX ACT, 1961.

• INCOME TAX . TAX ON THE INCOME OF INDIVIDUALS, FIRMS ETC. OTHER THAN COMPANIES, UNDER THE INCOME-TAX ACT, 1961.

• THIS HEAD ALSO INCLUDES OTHER TAXES, MAINLY THE SECURITIES TRANSACTION TAX, WHICH IS LEVIED ON TRANSACTIONS UNDERTAKEN ON STOCK EXCHANGES AND IN UNITS OF MUTUAL FUNDS.

DIRECT TAXES

• WEALTH TAX THIS IS A TAX LEVIED ON THE SPECIFIED ASSETS OF CERTAIN PERSONS INCLUDING INDIVIDUALS AND COMPANIES, UNDER THE WEALTH-TAX ACT, 1957.

FEATURES: INDIRECT TAXES• PAID INDIRECTLY BY THE FINAL CONSUMER OF

GOODS AND SERVICES

• BROAD BASED SINCE IT IS APPLIED TO EVERYONE IN THE SOCIETY WHETHER RICH OR POOR.

• TAX PAYER DOES NOT BEAR THE BURDEN OF TAX; SHIFTED TO THE ULTIMATE CONSUMERS.

• THE TAXPAYER AND THE TAX BEARER ARE NOT THE SAME PERSON.

EXCISE TAX• It is an inland tax on the sale, or production

for sale, of specific goods or a tax on a good produced for sale, or sold, within a country. The main features of the tax are as follows:- – applies to a narrower range of products.– an excise is typically heavier, accounting for a

higher fraction of the retail price of the targeted product.

– an excise is typically a per unit tax, costing a specific amount for a volume or unit of the item purchased.

VAT• It is a form of consumption tax. From the

perspective of the buyer, it is a tax on the purchase price. For the seller, it is a tax only on the value added to a product, material, or service. – A VAT is like a sales tax in that ultimately only

the end consumer is taxed.– It differs from the sales tax in that, collections,

remittances to the government, and credits for taxes already paid occur each time a business in the supply chain purchases products.

SERVICE TAX

• It is a tax imposed by Govt on services provided within the country. The service provider collects the tax and pays to the government. It is charged on all services except the services in the negative list of services. The current rate is 12.36% on gross value of the service.

CUSTOMS DUTY• A tax levied on imports (and, sometimes,

on exports) by the customs authorities of a country to raise state revenue, and/or to protect domestic industries from more efficient or predatory competitors from abroad.

• Customs Duty is based generally on the value of goods or upon the weight, dimensions, or some other criteria of the item (such as the  size of the engine, in case of automobile).

NON-TAX RECEIPTS• RECEIPTS WHICH ARE RECEIVED

FROM SOURCES OTHER THAN TAXES.

• FEES, FINES, ESCHEAT, SPECIAL ASSESSMENT, INCOME FROM PUBLIC, INCOME FROM SALE, GRANTS/DONATIONS ARE SOME TYPES OF NON-TAX RECEIPTS.

TYPES OF NON-TAX RECEIPTS

Fees: Payment to the Govt for the services that it renders to the people.

Fines: Payments made by the law breakers to the Govt by way of economic punishment.

Escheat: Income to the state which arises out of property left by people without legal heirs, when their are no claimants of such property.

Special Assessment It is the payment made by the owners of those properties whose value has appreciated due to development activities of Govt.

Grants / Donations Grants received by Govt are also a source of revenue . In event of natural calamities( earth quake, floods etc.) or during wars , the citizens of the country often make some donations and grants to the govt.

TAX REVENUE 2013-2014

CORPORATION TAX

• REVISED ESTIMATE OF CORPORATION TAX FOR 2012-2013 IS `358874 CRORE AS AGAINST BE OF `373227CRORE .

• BE FOR 2013-2014 IS `419520 CRORE .

INCOME TAX

• REVISED ESTIMATE(RE) OF TAXES ON INCOME FOR 2012-2013 IS `206095 CRORE AS AGAINST THE BUDGET ESTIMATE (BE) OF `195786 CRORE.

• BE FOR 2013-14 IS `247639 CRORE

WEALTH TAX

• REVISED ESTIMATE(RE) OF WEALTH TAX FOR 2012-2013 IS `866 CRORE AS AGAINST BUDGET ESTIMATE(BE) OF `1244 CRORE.

• BUDGET ESTIMATE FOR 2013-2014 IS `950 CRORE.

CUSTOMS• REVISED ESTIMATE(RE) OF CUSTOMS

DUTIES FOR 2012-2013 IS `164853 CRORE AS AGINST THE BUDGET ESTIMATE(BE) OF `186694 CRORE.

• BUDGET ESTIMATE(BE) FOR 2013-2014 IS `187308 CRORE

UNION EXCISE DUTY• REVISED ESTIMATE OF UNION EXCISE

DUTIES FOR 2012-13 IS `171996.09 CRORE AS AGAINST THE BUDGET ESTIMATE OF `194350.34 CRORE.

• BUDGET ESTIMATE FOR 2013-2014 IS `197553.95 CRORE.

SERVICE TAX• REVISED ESTIMATE(RE) OF SERVICE

TAX FOR 2012-13 IS `132697 CRORE AS AGAINST THE BUDGET ESTIMATE(BE) OF `124000 CRORE.

• BUDGET ESTIMATE(BE) FOR 2013-2014 IS `180141 CRORE.

• THE RATE OF SERVICE TAX HAS BEEN INCREASED FROM 10% TO 12% W.E.F. 01.04.2012.

CREDITS

KARAN PRATAP SINGH BHADWAL.

THANK YOU