Taxation

Brahmananda Pani(M.Com, LLB,FCA,FICWA,ACS,MBA,DISA,CMA(AUS)

9731397829

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TAXATION STRUCTURE

3 Tier Federal Arrangement

• Union Government

• State Government

• Local Bodies

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Union Government

• Income Tax

• Custom Duties

• Central Excise

• Service Tax

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State Govt.

• VAT

• Sales Tax

• Stamp Duty

• Land Revenue

• State Excise(for manufacture of alcohol)

• Professional Tax

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Local Bodies

• Tax on Properties

• Municipal Tax

• Octroi

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TAX STRUCTURE IN INDIA (understand with some daily routine questions/answers)

• 1) Qus. : What are you doing? Ans. : Business. Tax : PAY PROFESSIONAL TAX! 2) Qus. : What are you doing in Business? Ans. : Selling the Goods. Tax : PAY SALES TAX!! 3) Qus. : From where are you getting Goods? Ans. : From other State/Abroad Tax : PAY CENTRAL SALES TAX, CUSTOM DUTY & OCTROI! 4) Qus. : What are you getting in Selling Goods? Ans. : Profit. Tax : PAY INCOME TAX! 5) Qus. : How do you distribute profit ? Ans : By way of dividend Tax : Pay dividend distribution Tax 6) Qus. : Where you Manufacturing the Goods? Ans. : Factory. Tax : PAY EXCISE DUTY!7) Qus.. : Do you have Office / Warehouse/ Factory? Ans. : Yes Tax : PAY MUNICIPAL & FIRE TAX!

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• 8) Qus. : Do you have Staff? Ans. : Yes Tax : PAY STAFF PROFESSIONAL TAX! 9) Qus. : Doing business in Millions?Ans. : Yes Tax : PAY TURNOVER TAX! Ans : No Tax : Then pay Minimum Alternate Tax 10) Qus. : Are you taking out over 25,000 Cash from Bank? Ans. : Yes, for Salary. Tax : PAY CASH HANDLING TAX! 11) Qus.: Where are you taking your client for Lunch & Dinner? Ans. : Hotel Tax : PAY FOOD & ENTERTAINMENT TAX! 12) Qus.: Are you going Out of Station for Business? Ans. : Yes Tax : PAY FRINGE BENEFIT TAX!13) Qus.: Have you taken or given any Service/s? Ans. : Yes Tax : PAY SERVICE TAX!14) Qus.: How come you got such a Big Amount? Ans.. : Gift on birthday. Tax : PAY GIFT TAX! 15) Qus.: Do you have any Wealth? Ans. : Yes Tax : PAY WEALTH TAX!16) Qus.: To reduce Tension, for entertainment, where are you going? Ans. : Cinema or Resort. Tax : PAY ENTERTAINMENT TAX!

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• 17) Qus.: Have you purchased House? Ans. : Yes Tax : PAY STAMP DUTY & REGISTRATION FEE ! 18) Qus.: How you Travel?Ans. : Bus Tax : PAY SURCHARGE!19) Qus.: Any Additional Tax?Ans. : Yes Tax : PAY EDUCATIONAL, ADDITIONAL EDUCATIONAL & SURCHARGE ON ALL THE CENTRAL GOVT.'s TAX !!!20) Qus.: Delayed any time Paying Any Tax? Ans. : Yes Tax : PAY INTEREST & PENALTY!

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21) INDIAN :: can I die now??

• Ans :: Wait, we are about to launch the funeral tax!!!

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INCOME TAX

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DIFFERENT TYPES OF PERSONS WHO ARE TAXABLE ENTITY UNDER

INCOME TAX LAW

1. INDIVIDUAL

2. H.U.F

3. PARTNERSHIP FIRM

4. COMPANY

5. TRUST, SOCIETY ETC.

6. ASSOCIATION OF PERSONS

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OBLIGATIONS OF THESE PERSONS UNDER INCOME TAX LAW

1. To File Return of Income

(i) In the case of individual/ H.U.F if their income exceeds the exemption limit of Rs.150000/-

(ii) In the case of Company and Firm filing of return is mandatory under income tax law even in case of loss.

2. To Maintain Books of Accounts and other records as prescribed under income tax law.

3. To furnish information as required by income tax officials under the provisions of law.

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4 In case of assessment proceedings , make representation before the assessing officer and furnish the information and evidences as required by him time to time.

5 Co-operating the income tax officials during the investigation process i.e. survey and search conducted by the Income Tax Department.

6 To deduct Tax as per law (TDS) and deposit the same with Government.

7 To pay taxes including advance tax and self assessment tax if any.

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TAX PAYABLE ON DEEMED BASIS (DEEMING PROVISIONS)

1. Loan, Gift etc received during the year.

2. Clubbing of Income.

3. Rental value of more than one house.

4. Income taxable on the basis of method of accounting (for example FD interest taxable on accrual basis)

5. Acceptance or repayment of loan in cash exceeding the prescribed limit of Rs.20,000/-.

6. Payment of expenditure in cash in excess of Rs.20,000/-.

7. Default in deduction of TDS.

8. MAT (Minimum Alternative Tax) in the case of Companies.

9. Transfer pricing.

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INCOME TAX AUTHORITIES (EXECUTIVES OF INCOME TAX LAW)

CBDT

CHAIRMAN

MEMBERS

CHIEF COMMISSIONER OF INCOME TAX

COMMISSIOENR OF INCOME TAX

ADDITIONAL COMMISSIONER OF INCOME TAX

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JOINT COMMISSIONER OF INCOME TAX

DEPUTY COMMISSIONER OF INCOME TAX

ASSTT. COMMISISONER OF INCOME TAX

INCOME TAX OFFICER

INCOME TAX INSPECTOR

SUBORDINATE STAFF i,.e. TAX ASSISTANT, CLERK,SUPERITENDENT, RECORD KEEPER ETC.

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DIFFERENT LAYERS OF INCOME TAX PROCEEDINGS

FILING OF RETURN

PROCEESSING OF RETURN

ASSESSMENT PROCEEDINGS (SCRUITNY)

FIRST APPEAL BEFORE CIT(A)

SECOND APPEAL BEFORE ITAT

BEFORE HIGH COURT

BEFORE SUPREME COURT OF INDIA

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BUSINESS STRUCTURING DECISIONS vis-a-vis

TAX PLANNING

CHOICE OF BUSINESS :-

RETAILS TRADE, MANUFACTURING, SERVICE, IMPORT, EXPORT, COMBINATION OF TWO OR MORE.

CHOICE OF FORM OF ORGANISATION :-

PROPRIETORSHIP UNIT, PARTNERSHIP FIRM, CORPORATE ENTITY (WHETHER PUBLIC OR PRIVATE)

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CHOICE OF LOCATION:-

FREE TRADE ZONES

TAX HOLIDAY ZONES

URBAN AREAS

RURAL AREAS

PROXIMITY TO RAW MATERAILS

AVAILIBILITY OF SKILLED LABOUR

PROXIMITY TO THE CUSTOMER.

CHOICE OF CAPITAL/DEBT STRUCTURE:-

OWN FUNDING OR BORROWED FUNDING OR PUBLIC SUBSCRIPTION OR VENTUERE CAPITAL OR COMBINATION OF TWO OR MORE.

Income Tax Rates(Individual)

• Upto Rs 150000- Nil

• 150000-300000- 10%

• 300000-500000- 20%

• Above 500000- 30%

• For senior citizen- Additional 30000

• For Women- Additional 75000

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• Calculate income tax of a male officer having total income of Rs 545780/-

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• Ans Rs 68734/-

• With surcharge Rs 70796/-

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THANK YOU !