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Basic Terminology UsedI. Previous Year: - As per the income tax act 1961, previous year means

the financial year immediately preceding the assessment year.II. Assessment Year: - Assessment year is basically a 12 months period

starting from April 1, during which an assesse is required to file the return of income (ITR) and the ITO has to initiate assessment proceedings for income as per ITR and tax thereon. Since Income Tax is on income of a financial/ previous year or period, so tax filings and assessment can start thereafter. Probably, that’s why it’s called assessment year/ period.

III. Co-operative Society: - A co-operative is an autonomous association of people united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly owned and democratically controlled business.

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V Circular: - It is internal memorandum or note of the ministry/department which may clarify certain aspect of law. It may be superseded by yet another circular or amendment.VI Notification: - It is a public notification in official gazette. In various enactments we see phrases such as “as may be prescribed”. These are later notified through notification. Notifications are integral part of enactment.VII Amendment: - Change in legal document made by adding, altering, or omitting a certain part or term. Amended documents when properly executed retain the legal validity of original documents. VIII Official Gazette: - It is a public journal and it prints official notices from the government. It is strictly in accordance with the government policies and decisions. It is published weekly by department of publication , ministry of urban development.

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Analysis of Direct Tax CollectionFinancial

YearCorporate

TaxIncome Tax Other Direct

TaxTotal

2009-10 2,44,725 13,2833 505 37,8063

2010-11 29,8688 14,6258 1049 44,5995

2011-12 3,22816 170,181 990 49,3987

2012-13 3,56326 2,01840 823 55,8989

2013-14 3,94678 2,42888 1030 63,8596

2014-15 4,28925 26,5772 1095 695,792

2015-16 45,4419 2,86801 1075 74,2295

Figures(In Crores)

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The greatest amount of detail in these documents is on direct tax collection – a combination of personal and corporate income collection – which doesn’t paint a very strong picture.

For instance, while direct tax collection nearly doubled from 3.7 lakh crore rupees in 2009-10 to 7.4 lakh crore rupees in 2015-16, its share as a percentage of total taxes has dropped by 10 percentage points over the same time frame.

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Analysis of Indirect Direct Tax Collection

Nature Of Tax Financial Year2016 2015

Excise Duty 28,252 16,546

Service Tax 18,647 14,585

Custom Duty 17,495 14,286

Total 64,394 45,417

Figures(In Crores)

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Indirect tax collections for the month of April 2016 was Rs 64,394 crore registering a growth of 41.8 per cent as compared to Rs 45,417 crore collected during the same period previous year.

Excise collections soared 70.7 per cent to Rs 28,252 crore in April as compared to Rs 16,546 crore a year ago.

Overall growth in revenue collections on account of indirect taxes excluding additional revenue measures is 17 per cent.

Arun Jaitley has pegged indirect tax collections at Rs 7.78 lakh crore in 2016-17, up 9.7 per cent from Rs 7,09,022 crore actual collections of the previous fiscal. 

Service tax collections in April rose 28 per cent to Rs 18,647 crore as compared to Rs 14,585 crore in the year ago period. 

Customs or import duty collections were Rs 17,495 crore, 22.5 per cent higher than Rs 14,286 crore collected in April 2015. 

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“Taxes are dues that we pay for the privileges of membership in an organized society.”

Tax is a compulsory payment made to the government for services it provides us, though people may not be completely satisfied or convinced with these services.

eg. Income tax is an instrument used by the government to achieve its social and economic objectives.

What is Tax?

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Types of Taxes

Income Based Tax

Income Tax

Wealth Tax

Expense Based Tax

Service Tax

Value Added Tax (VAT)

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Types of Taxes

Tax on Purchases

Service Tax

Sales Tax

Customs Duty

Tax on Wealth

Wealth Tax

Inheritance Tax

Tax on Property

Real Estate

Personal

Tax on Income

Income Tax

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DIRECT TAXES[Income Based Taxes]

Income Tax

• A Tax which is charged from the income earned by Assesse.

Professional Tax

• Tax Levied on Professionals.

Wealth Tax

• Tax on Wealth of a person.

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Annual charge levied on both earned income (wages, salaries, commission) and unearned income(dividends, interest, rents).

In addition to financing a government's operations, progressive income taxation is designed to distribute wealth more evenly in a population, and to serve as automatic fiscal stabilizer to cushion the effects of economic cycles.

Its two basic types are: -1. Personal income tax, levied on incomes of individuals, households, partnerships, and sole-proprietorships; and 2. Corporation income tax, levied on profits (net earnings) of incorporated firms. However, presence of tax loopholes (whose number increases in direct proportion to the complexity of tax code) may allow some wealthy persons to escape higher taxes without violating the letter of the tax laws.

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Professional Tax :- Professional tax is the tax by the state governments in India. Anyone earning an income from salary or anyone practicing a profession such as chartered accountant, company secretary, lawyer, doctor etc. are required to pay this professional tax. Different states have different rates and methods of collection.

Wealth Tax :- A wealth tax (also called a capital tax, equity tax, or net worth tax) is a levy on the total value of personal assets, including owner-occupied housing; cash, bank deposits, money funds, and savings in insurance and pension plans; investment in real estate and unincorporated businesses; and corporate stock, financial securities, and personal trusts. Typically liabilities (primarily mortgages and other loans) are deducted, hence it is sometimes called a net wealth tax.

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(a) Individual/HUF/AOP/BOI and every artificial judicial person

Level of Total Income Rate Of Income Tax

Where the total income does not exceed Rs 2,50000

NIL

Where the total income does exceed Rs 2,50000 but does not exceed Rs 5,000,00.

10% of the amount by which the total income exceeds Rs 2,50000.

Where the total income does exceed Rs 5,000,00. but does not exceed Rs 10,000,00.

Rs 25000 plus 20% of the amount by which the total income exceeds Rs 5,000,00.

Where the total income does exceed Rs 10,000,00.

Rs 1,25000 plus 30% of the amount by which the total income exceeds Rs 10,000,00.

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(b) Resident Individual of age of 60 years or more but less than 80 Years at any time during the financial year

Level of Total Income Rate Of Income Tax

Where the total income does not exceed Rs 30,0000

NIL

Where the total income does exceed Rs 30,0000 but does not exceed Rs 5,000,00.

10% of the amount by which the total income exceeds Rs 30,0000.

Where the total income does exceed Rs 5,000,00. but does not exceed Rs 10,000,00.

Rs 20000 plus 20% of the amount by which the total income exceeds Rs 5,000,00.

Where the total income does exceed Rs 10,000,00.

Rs 1,20000 plus 30% of the amount by which the total income exceeds Rs 10,000,00.

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(c) For Resident Individual of age of 80 years or more at any time during the financial year

Level of Total Income Rate Of Income Tax

Where the total income does not exceed Rs 50,0000

NIL

Where the total income does exceed Rs 50,0000 but does not exceed Rs 10,000,00.

20% of the amount by which the total income exceeds Rs 50,0000.

Where the total income exceeds Rs 10,000,00.

Rs 1,00000 plus 30% of the amount by which the total income exceeds Rs 10,000,00.

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INDIRECT TAXES[Expense Based Taxes]

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Service Tax :- Service tax refers to tax collected by the government of India from certain service providers for providing certain services. The person who pays service tax can be either a service provider or a service receiver or any other person who is responsible for providing certain services.

Excise Duty :- An excise or excise tax (sometimes called a special excise duty) 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 or licenses for specific activities.

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Custom Duty :- A Custom duty is a tax collected on imports and some exports by the customs authorities of a country. This tax is used to raise state revenue. It is based on the value of goods called ad valorem duty or the weight, dimensions, or other criteria of the item such as its size.

Sales Tax (VAT) :- A sales tax is a consumption tax imposed by the government on the sale of goods and services. A conventional sales tax is levied at the point of sale, collected by the retailer and passed on to the government.

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Direct Taxes Income Earner. Indirect Taxes Ultimate Consumer.

Who Pays Taxes???

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Direct Tax Direct Tax Code

Indirect Tax GST

FUTURE OF TAX

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