Bikash Rathi Gautam Shankar Malwika Upadhyay Akash Drall Keshu Dhankar Siddharth Shinde Vivek Chaudhry

Presented By Group 3: 11020241076 11020241079 110202410 11020241 11020241113 11020241131 11020241136

No.

Direct Taxes

Indirect Taxes

Imposed on persons

Imposed on goods & services

Amount of tax is determined directly on the basis of taxable income of the assessee No shifting of tax burden. Hence, they are borne directly by the taxpayer Tax collection is difficult

Amount of tax determined indirectly

Tax burden is shifted to the subsequent user Tax collection is relatively easier.

Direct Tax

Indirect Tax

Wealth Tax Act 1957

Income Tax 1961

Customs Act 1962

Central Excise Act 1944

Service Tax (Finance Act) 1994

Central Sales Tax Act 1956

The policy reforms include : Lowering of rates; Withdrawls/reduction of major incentives; Introduction of measures for presumptive taxation; Simplification of tax laws, particularly relating to capital gains; and Widening the tax base. The administrative reforms include : Computerisation involving allotment of a unique identification number to tax payers which is emerging as a unique business identification number; and Realignment of the available human resources with the changed geo-political and economical requirements

Maximum marginal rate

120 100 80 60 40 20 0 1970-71 1973-74 1974-75 1976-77 1985-86 1992-93 1997-98 1998-2010 * 97.5 77 66 50 40 30 30 Maximum marginal rate

93.5

*Basic exemption limit has been increasing over the years from 2004,from 1lakh to 1.8 lakh at present

Direct Tax Code(DTC)

The Direct Tax Code Bill 2010 (the Code) was introduced by the Government on 30 August 2010 in the monsoon session of the Parliament. Proposed to take effect from 1 April, 2012, if enacted When enacted, the Code will replace the archaic Income Tax Act and simplify the whole direct tax regime in the country. The Code aims at reducing tax rates, but expanding the tax base by minimising exemptions.

The concept of assessment year and previous year to be replaced with financial year. Levy of surcharge and education cess to be done away with. Exempt-Exempt-Exempt method of taxation for GPF, PPF & RPF. An overseas company with a place of effective management in India will now be treated as a tax resident in India and would be consequently liable to tax in India on its global income

Introduction of CFC rules would result in taxing income of certain overseas subsidiaries in the hands of their Indian owners, even before such income is distributed. CFC provisions applicable to taxpayers notwithstanding the provisions of the DTAA that may be more beneficial. GAAR to override Tax Treaty provisions The DTC contains GAAR provisions which provide sweeping powers to the tax authorities.

Substitutes profit-linked incentives with investment based incentives Provisions relating to Advance Pricing Agreement (APA) mechanism have been introduced. The category of 'Not Ordinarily Resident' abolished and only two categories of taxpayers proposed viz. residents and nonresidents Deduction on Leave travel concession and non-monetary perquisite have been done away with

RATES COMPARISION
CATEGORY
Indian company Foreign company Minimum Alternate Tax Income distributed by Mutual fund/LIC to unit holders of equity oriented funds Personal taxation

EXISTING
30% 40% 18 % of adjusted book profit NA

AS PER DTC
25% 30% 20 % of adjusted book profit 5 % of income distributed

Basic threshold limit of 250000 for SC & 180000 for men & 190000 for women 1 % on net wealth exceeding 30 lakhs

Basic threshold limit 250,000 for SC & 200,000 for others 1 % on net wealth exceeding 1 cr

Wealth tax

Due date for filing return a ) Corporate b ) Non Corporate

30th Sept 31st July

31st Aug 30th June

Introduction

Broad based & a single comprehensive tax levied on goods and services consumed in an economy Defined as a tax on goods and services, which is leviable at each point of sale or provision of service

Neutralise the existing problem of taxes being levied on top of taxes Simplify current level indirect tax system Integrates the union excise duties, customs duties, service tax and state VAT into a single levy Taxable event for the GST may be the act of sale of goods and services. The concept of manufacture may simply vanish

A tax over and above GST may be levied by the states on tobacco, petroleum and liquor May not have a dual VAT structure but a quadruple tax structure. It may have four components, namely
(a)a central tax on goods extending up to the retail level; (b)a central service tax; (c)a state-VAT on goods, and (d)a state-VAT on services.

Petroleum products, including crude, highspeed diesel and petrol, may remain outside the ambit of GST. Elimination of the area-based and sectoral excise duty exemptions that are being given by the Centre One of the major recommendations given by Kelkar Task Force (KTF) was the implementation of a single union GST.

Speeds up economic union of India; Better compliance and revenue buoyancy; Replacing the cascading effect [tax on tax] created by existing indirect taxes; Tax incidence for consumers may fall; By merging all levies on goods and services into one, GST acquires a very simple and transparent character; Uniformity in tax regime with only one or two tax rates across the supply chain as against multiple tax structure as of present; Efficiency in tax administration; Increased tax collections due to wide coverage of goods and services Improvement in cost competitiveness of goods and services in the international market.

Integration of all taxes levied on goods and services in a federal polity with sharp distribution of legislative powers is a tough task Widespread amendments in the Constitution and the various constitutional entries relating to taxation. Manner of sharing of resources between the Centre and the states Contentious issue of taxing financial services and e-commerce is to be appropriately addressed and integrated

India is going through a major Taxation reforms.The Acts which have been in place for so many years will be replaced with the view to unify and simplify Indian tax regime. Lower incidence of tax, reduced prices, a move towards the global concept, reducing cost of tax compliance, better revenue collection, an efficient and harmonised consumption tax system in the country all this looks good on the card, but is it really so easy to implement? Keeping the various constitutional, technological, procedural and political barriers, the job seems easier said than done.

Are these an old wine served in a new bottle??

http://icai.org/resource_file/965215951601.pdf http://businesstoday.intoday.in/story/50year-trend-of-indian-personal-taxrates/1/13502.html DirectTaxCode2010.pdf(KPMG)

Thank You!!!!