Taxation in India
The Indian Tax Structure is quite elaborate, with clear distinction in authority between Central, State and local governments. The taxes levied by the Central government are on income (other than tax on agriculture income which would be levied by the state government), customs duties, central excise and service tax. The State government levies Value Added Tax (VAT), sales tax in states where VAT is not applied, stamp duty, state excise, land revenue and tax on professions. Local bodies levy tax on property, octroi and for utilities like water supply, drainage etc. In the last 10 to 15 years, tax system in India has been subjected to significant reforms. The tax rates have been revised and tax laws have been modified.
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Direct taxes are charged on the basis of residential status and not on the basis of citizenship. The assessee are charged based upon the following factors
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Resident Resident but not ordinary resident. Nonresident.
Direct Taxes Before Reform They had a major impact on economic policies, creation of savings and the trend of investment. There was no proportion in terms of the impact of direct taxes on the economy and there relative share in total tax revenues. The system of direct taxes was very much complex and inefficient because of the combination of high marginal rates of personal income and wealth taxation and high rates of corporate profits. The corporate tax was pretty high. It leads to large scale evasion. Members Of Parliament and Central Government Ministers get comparatively low salaries, but they are given a sitting allowance which is not taxable. Ministers, MP's and other high ranking government officials get government allocated accommodation, where the charges are pretty less in comparison to the prevailing market rate. Growth in Direct Tax collection during the Financial Year 2008-09 Net direct tax collection during the fiscal 2008-09 stands at Rs.338, 212 crore, up from Rs.312, 202 crore during 2007-08, registering a growth of 8.33 percent. Growth in Corporate Taxes was 10.84 per cent, while Personal Income Tax (including FBT, STT and BCTT) grew at 9.09%. Despite economic slow-down and substantial relief to noncorporate
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According to ordinary concepts of “resident”, an individual should satisfy the “Common Law test”. In this particular case, Andy spends the last three years working in Thailand, having signed a contract with a Canadian company in Australia, which doesn’t fulfill
Taxation is by which governments finance their expenditure by requiring costs on corporate entities and citizens. The government uses tax to discourage or encourage certain economic choices. Example, reduce in taxable personal or household rent by the amount paid as interest on home contract loans results in greater construction activity and generates more jobs. An essential function of taxation is to support government expenditures. Different justifications and explanations for taxes have offered throughout history. New taxes were used to support ruling classes, raise armies and build defenses. Often, the authority to tax stemmed from a divine or supranational right. Taxes are significant source of revenue, and its collection is one of the most important functions performed by the state
Government requires fund to take care of its citizens and provide development measures within its jurisdiction. So one of the sources is levy of taxes in direct and indirect form. Irrespective of Tom, Dick and Harry , one cannot avoid the taxes. Before getting into know about how you directly pay taxes, lets look how indirect tax goes from your pocket.
In spite of the fact that the general government assess framework is progressive, with aggregate elected taxation rates a bigger rate of pay for higher-salary families than for lower-pay families, not all charges inside the elected framework are similarly progressive. Some government assessments are really backward as they are a bigger rate of salary for lower-wage than for higher-wage families. The individual and corporate tax and the estate tax are all progressive. By complexity, finance charges for Social Security and Medicare and excise are regressive.
The primary source of US tax law is Congress. Power to initiate tax legislation is vested in the House of Representatives but all tax bills must pass both houses and be signed into law by the President. Many times the details of the legislation are not dictated by Congress, but left to the Treasury Department which adopts regulations (that have the force of law) to spell out the details as well as interpret the statutes and provide guidance on the law. In addition, the Internal Revenue Service (IRS) issues rulings that address the application of the law to specific fact situations.
Regardless of all facts on taxes about the advantage and disadvantage, it is more practical if we include more opinions on how the nation handle taxes in this centuries. Due to there are different perspective in each of every people, some people may not prefer having tax money and more to keep all the earning to themselves, and half of the nation might agree on federal government is not fair due to the percentage that has given to the citizen. But however, there are also some people who cared more for their tax money because they still believe it can save the economy not to themselves.
Mr. Jones there was discussion of closing out your 401(k) and using that to help fund the business but I do not recommend doing so. Since you are over 59.5 years of age you will not have to pay a penalty for withdrawal however you will have to pay income taxes on the funds. Since you will be receiving a salary and potential bonus from the new corporation this could cause you to pay higher taxes. Also by withdrawing the funds it could reduce your retirement benefits for later when you look to actually retire. We can discuss retirement plans for the new corporation as well which can help you and potentially your daughter should you still hope to have her as a 40% owner.
Taxes in America tend to vary between states, since there is no common form of taxation. For example, many countries institute Value Added Tax (VAT) across the board, and it is included on the price tags. In America, there are almost 8,000 tax bureaus with various tiers of taxation, depending on each state. Taxes can be as high as 16% between states.
International taxation is one of the most pressing global topics in the world today. Tax regulations was one of the most pressing topics in the recent United States presidential campaign. The reason that people are so concerned with taxation is because it affects many aspect of society. Taxes affect how much money employees are able to take home. The government is concerned with taxes because it is hoe it generates revenue to fund governmental programs. The Mariam Webster dictionary defines a tax as “a compulsory contribution to state revenue, levied by the government on workers ' income and business profits or added to the cost of some goods, services, and transactions.” Therefore, a tax is any contribution levied by a government for some types of transaction. In addition, taxes are not unique to any particular country. The type of taxes and tax rates that are utilized in countries may vary. However, every government in the world use taxes as a means of generating revenue in order to fund governmental activities. With the spread of globalization, countries were able to engage in business transactions with other countries across the globe. Therefore, major corporations began to conduct more business activities in other countries. As a means of regulating its counter trade and business global regulatory organization were established. Organizations such as the World Trade Organizations are designed to allow a uniform and fair trade among countries. However, a tax is
The second case is based on taxability of Income and deductions arise from the transactions related to property and its maintenance. It
Taxation systems are usually modeled in such a way that they take into consideration the social welfare of the citizens. The government and other policy makers have the responsibility of ensuring that the system takes into account the needs of the citizens. The bottom line is that taxation should foster equal distribution of resources. The rate of taxation is usually arrived at after several considerations have been made. The rates are not fixed as they depend on the various economic changes. The issue of how taxation should be distributed among the different economic classes is yet to be addressed.
Under the taxation system, majority of the taxes goes to the central government while revenue from some tax categories is shared with the local government. This revenue-sharing setting guarantees that the financial incentive of local government is aligned with that of the central government. Specifically in the tobacco industry, there are two levels of taxes collected
Tax according to C.S Ola is defined as: “non punitive yet compulsory levy on the income and properties of individuals and organizations by government and which it does not account for, the proceeds from the levy on trade the government uses to pursue the accomplishment of some social, economic and political objective in the interests of its citizens”
From the Appellate Division of Kerguelen Sealing & Whaling Co., Ltd v CIR ˡ, the fundamental logic of a residence based tax system has been contrasted to that of a source based system in the following: “In some countries residence (or domicile) is made the test of liability for the reason, presumably, that residents, for the privilege and protection of residence, can justly be called upon to contribute towards the cost of good order and government of the country that shelters