Unit - 6
Fundamentals of Taxation
Tax
- A compulsory contribution (not voluntary)
- Made by a person
- To the state's treasury
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Types of Tax
Direct tax- incidence and impact- same person
Ex: Income Tax, Wealth Tax etc
Indirect tax – incidence and impact- different person
Ex: Sales tax, Excise duty, Customs duty, GST etc
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(Incidence- liability to pay tax, Impact- burden of pay)
Heads of Income
- Income from Salary
- Income from House property
- Income from Capital gains
- Income from Business/ profession
- Income from Other sources
- Concept of GTI (Gross Total Income)
- Taxable/ Net Income
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COMPUTATION OF NET INCOME
Heads of Income
| Rs. | Rs. | |
|---|---|---|
| 1. Income from Salaries | XXXX | |
| 2. Income from House Property | XXXX | |
| 3.Income from Capital Gains | XXXX | |
| 4. Income from Business/ Profession | XXXX | |
| 5. Income from Other sources | XXXX | |
| Gross Total Income (1+2+3+4+5) | XXXX | |
| (-) Deductions U/s 80 | ||
| 80C, 80D, 80G, 80 GG, 80GGB, 80GGC, .. 80U | XXXX |
Net Income/ Taxable Income
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Assessment year
Period of 12 months starting from 1st April and on 31st March every year
Previous year
The financial year immediately preceding Assessment year
DEDUCTIONS U/S 80C
- Insurance premium on own life/ spouse's life/ child's life (dep / indep / minor / major / married / unmarried) subject to 10% on Sum assured.
- Contribution towards PPF, EPF etc
- Purchase of National Savings Certificate
- Purchase of ULIP of UTI, LIC- Mutual fund etc
- Payment of notified annuity plan of LIC or other insurer
- Subscription towards notified units of MFs
- Subscription to any notified bonds of NABARD
- Deposit in Sukanya Samriddhi Account
- Any sum paid (incl. interest accrued) as subscription to Loan account scheme of National housing bank
- Any public deposit scheme of HUDCO
- Any sum paid as tuition fees for full time education of children (Indian institutions)
- Principal amount paid towards cost of purchase/construction of residential property
- Amount deposited as term deposits (5 years or more) in accordance with a scheme framed by the Govt
- 5 years Term deposits scheme of post office
- Gross qualifying amount or Rs.150000
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TAX RATES FOR AY 2017-18, PY/FY 2016-17
| Individuals (Males and Females) | Senior citizen (aged 60yrs and above, less than 80 yrs) | Senior citizen (80 yrs and above) | ||
|---|---|---|---|---|
| Upto Rs.2.5lac | Nil | Upto 3lac | Nil | -------- |
| 2.5lac-5lac | 5% | 3lac-5lac | 5% | Upto 5 lac |
| 5lac-10lac | 20% | 5lac-10lac | 20% | 5 lac – 10lac |
| Above 10lac | 30% | Above 10 lac | 30% | Above 10 lac |
Surcharge: 10% of income tax, where total income exceeds Rs.50 lac to 1 crore.
Surcharge: 15% of income tax, where the total income exceeds Rs.1 crore.
Cess: 3% on total of income tax + surcharge.
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This download link is referred from the post: VTU MBA Lecture Notes - 1st Sem, 2nd Sem, 3rd Sem and 4th Sem || Visvesvaraya Technological University
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