Project Synopsis ON INCOME TAX

in partial fulfillment for the award of the degree of

Bachelor of Technology IN Computer Science & Engineering Submitted by Manjot Singh 90680308229
Under guidance of Ms. Harpreet Kaur A.P , CSE At

Jatinderpal Singh 90680308221

SANT BABA BHAG SINGH INSTITUTE OF ENGG. & TECH.PADHIANA

INTRODUCTION
The direct tax which is paid by individual to the Central Government of India is known as Income Tax. It is imposed on our income and plays a vital role in the economic growth & stability of our country. For years the Government is generating revenue through this tax system. The word 'Tax' originated from the 'Taxation.' which mean 'Estimate.' Hence, 'Income Tax' mean 'Income Estimate,' which helps the government to know the actual economic strength of a person. It is also a way to set up an economic standard for general people. It helps the Government to know the distribution of money among country's people.

Income Tax has been in force in different forms since years. If we go through the history of India, we get relevant information regarding the taxation system of India. In ancient history, it is mentioned about such system which were imposed on the income, expenditure and other subject. Even information of the same is given in Manu Smriti and Arthasatra which confirms its existence at that time.

In modern India, Income Tax came into existence in 1860 with the implementation of first Income Tax Act. After implementation of this Act, people became aware of the actual meaning of Income Tax. This act was in force for first five years. After this, in 1865, second Act came into force. There were major changes in this Act relative to the first. It proved itself as a good factor for the growth of our economy. With this Act a new concept of Agriculture Income came into existence.

After this, different new Act was also implemented. The most important of them is the Income Tax Act, 1961. According to ruling of Income Tax Act, 1961, any person whose salary from any source of income is more than the maximum limit of unchargeable amount will be liable to pay Income Tax. There is also a provision of deduction and exemptions in Income Tax, depending upon the type of assessee, source of income, residential status and investment in saving schemes. Income tax rates are a matter of change, which is declared by Ministry of Finance, Government of India regularly, usually on annual basis

An income tax is a tax levied on the income of individuals or businesses (corporations or other legal entities). Various income tax systems exist, with varying degrees of tax incidence. Income taxation can be progressive, proportional, or regressive. When the tax is levied on the income of companies, it is often called a corporate tax, corporate income tax, or profit tax. Individual income taxes often tax the total income of the individual (with some deductions permitted), while corporate income taxes often tax net income (the difference between gross receipts, expenses, and additional write-offs). Various systems define income differently, and often allow notional reductions of income (such as a reduction based on number of children supported). Types Personal A personal or individual income tax is levied on the total income of the individual (with some deductions permitted). It is often collected on a pay-as-you-earn basis, with small corrections made soon after the end of the tax year. These corrections take one of two forms: payments to the government, for taxpayers who have not paid enough during the tax year; and tax refunds from the government for those who have overpaid. Income tax systems will often have deductions available that lessen the total tax liability by reducing total taxable income. They may allow losses from one type of income to be counted against another. For example, a loss on the stock market may be deducted against taxes paid on wages. Corporate Corporate tax refers to a direct tax levied on the profits made by companies or associations and often includes capital gains of a company. Earnings are generally considered gross revenue minus expenses. Corporate expenses related to capital expenditures are usually deducted in full (for example, trucks are fully deductible in the Canadian tax system, while a corporate sports car is only partly deductible) over their useful lives by using percentage rates based on the class of asset they belong to. Accounting principles and tax rules about recognition of expenses and revenue will vary at times, giving rise to book-tax differences. If the book-tax difference is carried over more than a year, it is referred to as a deferred tax. Future assets and liabilities created by a deferred tax are reported on the balance sheet Payroll

A payroll tax generally refers to two kinds of taxes: employee and employer payroll taxes. Employee payroll taxes are taxes which employers are required to withhold from employees' pay, also known as withholding, pay-as-you-earn (PAYE) or pay-as-yougo (PAYG) tax. These withholdings contribute to the payment of an employee's personal income tax obligation; if the payments exceed this obligation, the employee may be eligible for a tax refund or carryforward to future periods. Employer payroll taxes are paid from the employer's own funds, either as a fixed charge per employee or as a percentage of each employee's pay. Payroll taxes often cover government social insurance programs, such as social security, health care, unemployment, and disability. These payments do not count toward the income taxes of employees and employers, but are normally deductible by the employer as a business expense. Inheritance The inheritance tax, estate tax and death duty are the names given to various taxes which arise on the death of an individual. In international tax law, there is a distinction between an estate tax and an inheritance tax: the former taxes the personal representatives of the deceased, while the latter taxes the beneficiaries of the estate. However, this distinction is not universally recognized. For example, the "inheritance tax" in the UK is a tax on personal representatives, and is therefore, strictly speaking, an excise tax. Capital gains tax A capital gains tax is the tax levied on profits from the sale of capital assets. In many cases, the amount of a capital gain is treated as income and subject to the marginal rate of income tax. In an inflationary environment, capital gains may be, to some extent, illusory. If prices in general have doubled over five years, then selling an asset for twice the price it was purchased at five years earlier represents no gain at all. Partly to compensate for such changes in the value of money over time, some jurisdictions, such as the United States, give a favorable capital gains tax rate based on the length of holding. European jurisdictions have a similar rate reduction to nil on certain property transactions that qualify for the participation exemption. In Canada, 2050% of the gain is taxable income. In India, Short Term Capital Gains Tax (arising before one year) is 10% [15 % from F.Y 2008-09 as per Finance Act 2008] flat rate of the gains and Long Term Capital Gains Tax is nil for stocks and mutual fund units held one year or more, provided the sale of shares involved payment of the Securities Transaction Tax, and 20% for any other assets held three years or more

Charge to Income-tax Everyone whose income exceeds the maximum amount, which is not chargeable to the income tax, is an assesse, and shall be chargeable to the income tax at the rate or rates prescribed under the finance act for the relevant assessment year, shall be determined on basis of his residential status. Income tax is a tax payable, at the rate enacted by the Union Budget (Finance Act) for every Assessment Year, on the Total Income earned in the Previous Year by every Person. The chargeability is based on nature of income, i.e., whether it is revenue or capital. The rates of taxation of income are-: Income Tax Rates/Slabs Rate (%) (as per budget 2012) Up to 2,00,000 = 0%, 2,00,001 5,00,000 = 10%, 5,00,001 10,00,000 = 20%, 10,00,001 upwards = 30%, Up to 2,50,000 (for resident individual of 60 years or above)= 0, Up to 5,00,000 (for very senior citizen of 80 years or above)= 0. Education cess is applicable @ 3 per cent on income tax, surcharge = NA

REQUIREMENT SPECATION The minimum configuration to use this system is as follows: Hardware Specation: Processor :Intel Celeron class processor with 233 MHz

RAM Hard Disk Monitor Keyboard Mouse Network

::::::-

32 MB 1GB Color monitor 101 keys Any pointing device Any network supporting TCP/IP

Software Specation: Platform (both side) Software (Client side) : Software (server side) : :Any platform supports JVM.

Java enabled browser with Java Script. Java2 SDK or later.

The recommended configuration to use this system is as follows: Hardware Specation: Processor RAM Hard Disk Monitor Keyboard Mouse Network :::::::Intel Celeron class processor with 450 MHz 64 MB 20GB Color monitor supporting 800/600/16b resolution 110 keys Three button pointing device Network supporting TCP/IP

Software Specation: Platform (both side) :Windows 9x, ME, 2000, XP/UNIX /Solaries MS Internet Explorer 4.0 or NetScape 2.0 Java2 SDK or later.

Software (Client side) : Software (server side) : -

Objective This solution/application will make processing of income tax returns forms faster and easier Electronic filing of Income Tax Returns: To enable all taxpayers to fulfill their statutory obligation of filing their Income Tax Return electronically- 'Anytime', 'Anywhere', securely and conveniently using the Internet. Online Tax Calculator Downloadable e-forms e-payment of taxes Allotment of PAN Challenge With traditional paper-driven processes increasing costs and slowing response times, the NY State Department of Taxation and Finance sought to modernize its tax filing system through the use of e-forms. However, because there are thousands of different types of forms to process and many fields in tax forms are often left blank, the organization needed a flexible data model that could provide a consistent way to manage, input and share data while easily accommodating form and regulation changes. Solution The organization adopted XML as its standard data platform for e-forms. XML is a flexible and extensible data model that can easily handle schema diversity, schema evolution and sparse data. To efficiently manage XML data, the agency uses IBM DB2 9 with pureXML capabilities within a service oriented architecture (SOA). The agencys innovative use of XML enables staff to store forms as-is without having to perform any complex data transformations. This has helped the organization greatly reduce the complexity of database design as well as the time and labor needed to update tax policies and forms. Additionally, agency employees can now more easily access federal tax records and support online filing for corporate and private tax returns. This innovative use of new technology earned the agency the IBM Information On Demand award for Best DB2 pureXML solution and sets a new standard for tax processing that makes it easier for

taxpayers to submit and obtain tax-related information. To date, the organization has processed more than 2 million Web filings and stored hundreds of thousands of electronic returns. Benefits Reduces the time and labor needed to update tax policies and forms with 2 million Web filings processed to date Projects 5 million more filings with addition of two more applications Decreases data management costs Enables agency staff to more easily access federal tax records Streamlines online filing for corporate and private tax returns