Tax system in India
What is Tax?
The tax is the compulsory subscription to be deposited with the government treasury. The government needs money to run its economy, to run its economy. This money is collected from the public and it is used to provide facilities to the people.
Types of Taxes
Mainly there are 2 types of tax
1) Direct tax 2) Indirect taxes
Direct tax:
When the responsibility of tax trauma and tax collection falls on one person, then it is said to be a direct tax. For example: - Income tax person has to pay taxes if the person's income is more than the discounted limit.
Indirect tax:
When the responsibility of tax trauma and tax collection falls on different individuals, it is called indirect taxes. For example: - When a manufacturer prepares Rs 100 for an item, suppose the producer has to pay a 100 rupees excise duty, then the item will be Rs.200. If you have to pay 100 rupees for selling it in the shop then it will cost Rs 300. When the customer purchases the item from the shop it will be worth 300 rupees. Originally, the price of the goods was only 100 rupees but the excise duty and sales tax was recovered from the customer's 200 rupees.
Cess:
Cess means tax on tax . For example: - Suppose someones income is Rs 300000. If the income-tax limit is 2.5 lakh, then the tax will be required to pay tax of Rs 50000 to 10% and Rs 5000. However, if the cess is levied, additional tax @ Rs. 5000 will be charged @ 3% plus tax of Rs. 150
Surcharge:
Surcharge is a tax on additional income. Surcharge is a tax on additional income. For example: - Suppose the surcharge limit is Rs. 1 crore. Suppose a person's income is worth 2 crores if I have deducted the tax-free limit of 2 lakh and taxed at 30% Besides, a surcharge of Rs 1 crore will be incurred on surcharge due to more than Rs 1 crore 98 lakh
Incom Tax
Income Tax Slab Financial Year 2017-18
Individual Less Than 60 Years old
Income Tax Slabs
|
Tax Rate
|
Health and Education Cess
|
|
Income up to Rs 2,50,000*
|
No tax
|
||
Income from Rs 2,50,000 – Rs
5,00,000
|
5%
|
4% of Income Tax
|
|
Income from Rs 5,00,000 – 10,00,000
|
20%
|
4% of Income Tax
|
|
Income more than Rs 10,00,000
|
30%
|
4% of Income Tax
|
60 Years Old But Less Than 80 years old
Income Tax Slabs
|
Tax Rate
|
Health and Education
Cess
|
Income up to Rs
3,00,000*
|
No tax
|
|
Income from Rs
3,00,000 – Rs 5,00,000
|
5%
|
4% of Income Tax
|
Income from Rs
5,00,000 – 10,00,000
|
20%
|
4% of Income Tax
|
Income more than Rs
10,00,000
|
30%
|
4% of Income Tax
|
For Senior Citizen 80 years old and more
Income Tax Slabs
|
Tax Rate
|
Health and Education Cess
|
Income up to Rs 5,00,000*
|
No tax
|
|
Income from Rs 5,00,000 – 10,00,000
|
20%
|
4% of Income Tax
|
Income more than Rs 10,00,000
|
30%
|
4% of Income Tax
|
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