Tax Assisgnment PPT

8/11/2019 Tax Assisgnment PPT

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A comparative analysis withNew Zealand, Australia andIndia

ByTamanna Prajapati

TAXATION OFINDIVIDUALS


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GEOGRAPHICAL OVERVIEW


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History of Income taxWho is liable to pay tax?Proof required for filing taxIncome tax structure- Individual & MinorIncome you must declareConclusion

SUMMARY


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NEW ZEALAND AUSTRALIA INDIA

The IncomeAssessment Act of1891 introduced NewZealands first incometax and the principleof progression intoNew Zealandstaxation system.

The top marginal rateof income tax wasreduced from 66% to33%.

Queenslandintroduced incometax in 1902 by theIncome Tax Act of1902.

During the 1980s,the top marginalrate of income tax

was only 21%.

Income tax wasintroduced in 1860,abolished in 1873 andreintroduced in 1886 .

Income tax levels inIndia were very highduring 1950-1980, in1970-71 there were 11

tax slabs with highesttax rate being 93.5%.

HISTORY OF INCOME TAX


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As per the TaxAdministration Act1994 , Interpretation

section-Taxpayer means aperson who (a) is liable to perform, orto comply with, a taxobligation; or

(b) may take a taxposition whether asprincipal, or as an agentor employee or officer ofanother person, orotherwise.

As per the IncomeTax AssessmentAct 1936 -

"taxpayer" meansa person derivingincome orderiving profits orgains of a capitalnature.

As per the Income TaxAct 1961 -

an "Assesse" means aperson by whom any taxor any other sum ofmoney (i.e. penalty orinterest) is payableunder the Act.

WHO IS LIABLE TO PAY TAX


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Taxation in New Zealand iscollected at a nationallevel by the Inland RevenueDepartment (IRD) on behalf

of the Government of NewZealand.

In New Zealand, it is notcompulsory for everyindividual (e.g. baby, child)to have an IRD number, butif you or your children areearning income you haveto pay tax. If you do nothave an IRD number, taxwill be deducted at a no-declaration rate.

Income tax is collected bythe Australian TaxationOffice for theGovernment of Australia.

People apply for tax filenumber (TFN). Before youstart work, or soon after,you may need to get atax file number (TFN)individuals form (NAT1432).

Income Tax Departmentfunctions underthe Department ofRevenue in Ministry of

Finance. It is responsible foradministering and collectingdirect tax.

It is mandatory to have aPermanent Account Number(PAN). Permanent AccountNumber (PAN) is a ten-digitalphanumeric number,issued in the form of alaminated card, by anAssessing Officer of theIncome Tax Department.

PROOF FOR FILING TAX RETURN


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INCOME TAX STRUCTURE

The personal tax years runsfrom 1 April to 31 March

The financial year runs from1 July to 30 June

The financial tax year runs from1 April to 31 March


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A minor is a natural personresident in New Zealandwho is under 16 years of age

Children's tax exempt income :From 1 April 2012 the tax creditfor children was withdrawn andreplaced with a limited incomeexemption for children.The main change was thatemployers and schedulerpayment payers are nowrequired to deduct tax fromthe payments they make tochildren regardless of their levelof income.Under the new limited incomeexemption, a school child doesnot need to pay tax on incomeof less than $2,340 which wouldnot ordinarily be taxed beforethey were paid.

A minor is a person whois under 18 years of age.

MINOR INCOME

Taxableincome Tax on thisincome

$0 $417 Nil

$417 $1,307 65c for each$1 over $416

$1,308 andover 45% of totalincome

A minor is a person who isunder 18 years of age.

Taxability of income of aminor is concerned, up toRs.1,500 any income earnedby a minor is exempt. In caseincome earned is more thanRs 1,500 then the income isclubbed with the parentwhose income is higher andit will be continued to be

clubbed with the sameparent


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1) Salary and Wages2) Business and Self-Employed Income3) Income fromInvestments4) Rental Income5) Overseas Income

1) Employmentincome2) Business,partnership and trustincome3) Investment income4) Capital gains5) Foreign Income6) Other Income

1) Income from salaries2) Profits and gains ofbusiness or profession3) Income from house

property4) Capital gains5) Income from othersources

INCOME YOU MUST DECLARE


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Salary and Wages

What is PAYE?PAYE is the tax your employerdeducts from your salary andwages.If your income is from salary,wages, benefits or taxablepensions, your tax willautomatically be deductedunder the PAYE (pay as youearn) system.If you don't complete a taxcode declaration, your tax

will be deducted at theno-notification rate of 45cents in each dollar.

Employment income

Salary and wagesSalaries and wages arepayments made:

under an employmentcontractAs remuneration forservices.

Salary and wages incomeincludes:

salary and wagescommissions

bonusesincome from part-timeor casual workparental leave payamounts for lost salary orwages paid.

Income from salaries

All income received as salaryunder employer-employeerelationship is taxed under thishead, on due or receipt basis,

whichever arises earlier.

Salary comprises of 5components namely:

Basic SalaryFees, Commission and BonusAllowancesPerquisitesRetirement Benefits.

1) SALARY INCOME


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Income chargeable asincome under this head

xxx

Less: Expenses deductibleunder this head

(xx)

Business, partnership andtrust income

The net income you receivefrom carrying on a business isassessable income and youneed to declare it on your taxreturn.You may receive income as a:

sole trader (self-employed)partner in a partnershipbeneficiary of a trustDirector or employee of acompany.

2) BUSINESS INCOME

The computation of income underthe head "Profits and Gains ofBusiness or Profession" depends on:

If regular books of accounts are

not maintained,

However, if regular books ofaccounts have been maintainedand profit and loss account has

been prepared,Net Profit as per profit and loss account xxx

Add : Inadmissible expenses debited toprofit and loss account

xx

Add: Deemed incomes not credited toprofit and loss account

xx

Less: Deductible expenses not debitedto profit and loss account

(xx)

Less: Incomes chargeable under otherheads credited to Profit & Loss A/c

(xx)

Profits and Gains ofbusiness or profession

Business and Self-Employed Income

Business with noemployees, turnover ofless than $60,000 andunregistered for GST:

A final income tax rate of 14%for businesses that are nottraders and 7% for businessesthat trade in goods (such asretailers) will be paid onbusiness turnover.


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Portfolio investment entity(PIE)

A portfolio investment entity(PIE) is a type of entity thatinvests the contributions frominvestors in different types ofinvestments. PIEs came intoexistence on 1 October 2007.

Notified foreign investors(NFI)

There is also a new class ofinvestor, a notified foreigninvestor. A non-resident whoholds an investment in a foreign

investment PIE may notify the PIEthat they wish to be treated asa notified foreign investor.

You must show investmentincome on your tax return,including:

interest, including children'ssavings accounts and lifeinsurance bonusesdividends you are paid as ashareholderIncome or credits youreceive from any trustinvestment product.

In India, Investment Incomecomes under Income fromother sources.Example: Dividends

3) INVESTMENT INCOME


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Generally, any incomethat you receive fromrenting out property willbe liable for income tax,so you must include it inyour tax return.Even if you havedetermined that you areno longer a resident forNew Zealand taxpurposes, you will still berequired to pay tax onany income that youderive that has a NewZealand source.

You must declare thefull amount of any rentand rent-related

payments that youreceive, or becomeentitled to, when yourent out your property -whether paid to you oryour agent.If you receive rent-related payments inthe form of goods andservices, you mustwork out and declaretheir monetary value.

Income under this head istaxable if the assesse isthe owner of a property

consisting of building orland appurtenant theretoand is not used by him forhis business or professionalpurpose.An individual is eligible toclaim any one property asSelf-occupied if it is usedfor own residentialpurpose.

4) RENTAL INCOME

Income from House property


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NEW ZEALAND AUSTRALIA INDIAThere is no separatetax on capital gains -a gain is treated aspart of your totalincome and taxedaccordingly.It includes gains fromselling real estate,

shares and managedfund investments.

Short Term CapitalGain (STCG):

If the Asset is held for lessthan 36 Months

Long Term CapitalGain (LTCG):

If the Asset is held formore than 36 Months

It includes real estate,equity shares, bonds,

jewellery, paintings,art(under section 2(14)of the I.T. Act, 1961).

5) CAPITAL GAINS

New Zealand has nogeneral capital gainstax.There is no Capitalgains tax on NewZealand investmentsbut it applies toforeign debt and

equity investments.

What is Capital gains?If you sell an asset and make profit you make a capital gain.


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If you're a NewZealand resident fortax purposes, you aretaxed on yourworldwide income,so you must declareany foreign incomein your income taxreturn.

If you're an Australianresident for taxpurposes, you aretaxed on yourworldwide income,so you must declareany foreign incomein your income taxreturn .

If youre a citizen ofIndia who leaves Indiafor employmentpurposes, and staysoutside India for morethan 182 days, thensuch Income earnedoutside India will notbe taxable in thatyear.

6) FOREIGN INCOME


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New Zealand being adeveloped countryhas a relatively

simple tax systemwhen compared toother countries.New Zealandreceives a higherproportion of itsincome taxes fromtaxing personalincome tax.

Australia tax systemis improving and willcontinue toimprove in the next10-20 years.55% of thepopulation inAustralia pay theirIncome tax.

Taxation is Non-Productive & ofcomplex nature.Only 2%-3% of thepopulation pays theirIncome tax.

CONCLUSION

Tax Assisgnment PPT

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