TAX

When it is said Indian Government, it can be classified into Central Government and then into state government. Taxes imposed on citizens of India can be broadly classified into two categories: 1. Direct Taxes and 2. Indirect Taxes These two broad categories are governed by two central bodies under Ministry of Finance: 1. Central Board of Direct Taxes (CBDT) and 2. Central Board of Excise and Customs (CBEC) 1. Direct taxes are those taxes which we pay directly to the central government and example of direct tax is Income Tax e.g. tax paid on salary by employees. (a) Tax Deducted at Source (TDS): Income tax has now taken form of TDS. TDS is not only deducted on employees but all other person carrying on profession and business also. There is a broad category which is used to deduct TDS at appropriate rate mentioned on various form of income earned by people. For e.g. On Professional TDS @ 10% is deducted, on contractors @ 1% and so on. (b) Wealth tax is also which is paid to Central Government @1% on wealth exceeding Rs. 30 lakhs. (c) CENVAT: Central Value added tax, this tax is on sales of goods and differs from normal VAT. This goes to central Government. 2. Indirect taxes are those taxes which we do not pay directly to the government but indirectly. For example when we purchase any product we pay VAT and other taxes levied on it, about which we do not know much as most of the times it is sold to us as including all taxes and levies. (a) Other form of indirect taxes are Customs duty which is paid on import of any product in India from a country outside India. There are various rates applicable and many duties involved which require detailed explanation. (b) Excise duty is also a form of indirect tax which is levied at the time of manufacture of any product. There is a complete tariff act regarding that. (c) Service tax is paid on the services provided e.g. renting, telecom service, internet service,

cargo service. All these services when availed also include a component in form of service tax @10.3%. Now all of the above taxes went to the Central Government. Now coming to State Government State Government earns from: (a) Sales tax or VAT, which is levied on products. (b) Entertainment tax which is levied on movies and other form of entertainment mediums. (c) Toll tax for entry into city. (d) Professional Tax for carrying any profession in a city by professional like Doctors and Lawyers, etc. There are also various other taxes levied by State Government, but these above are broad categories explained. Education cess of 3% is a kind of residuary tax which is subdivided into: Education cess(EC) @2% and Secondary and Higher Education cess (SHEC) @1% This tax is levied for purpose of providing education to poor including secondary and higher education.

About Tax in India

Tax, in general, is the imposition of financial charges upon an individual or a company by the Government of India or their respective state or similar other functional equivalents in a state. The computation and imposition of the varied taxes prevalent in the country are carried on by the Ministry of Finances Department of Revenue. During the last financial year of 2010 2011, the gross collection of tax amounted to around INR. 7.92 trillion, where the direct tax has got 56 % contribution and the indirect tax has got 44 % contribution.

Latest Income tax slabs for year 2012-2013

Submitted by financeminister on Fri, 03/16/2012 - 14:27 The latest income tax slab to calculate your tax for Year 2012-2013 based on budget 2012 budget. Tax exemption limit raised to Rs 2 lakhs and tax rates has changed for other slabs too.

India Income tax slabs 2012-2013 for General tax payers

Income tax slab (in Rs.) 0 to 2,00,000 2,00,001 to 5,00,000 5,00,001 to 10,00,000 Above 10,00,000 Tax No tax 10% 20% 30%

India Income tax slabs 2012-2013 for Female tax payers

Income tax slab (in Rs.) 0 to 2,00,000 2,00,001 to 5,00,000 5,00,001 to 10,00,000 Above 10,00,000 Tax No tax 10% 20% 30%

India Income tax slabs 2012-2013 for Senior citizens (Aged 60 years but less than 80 years)
Income tax slab (in Rs.) 0 to 2,50,000 2,50,001 to 5,00,000 5,00,001 to 10,00,000 Above 10,00,000 Tax No tax 10% 20% 30%

India Income tax slabs 2012-2013 for very senior citizens (Aged 80 and above)
Income tax slab (in Rs.) 0 to 5,00,000 5,00,001 to 10,00,000 Above 10,00,000 Tax No tax 20% 30%