A tax is an obligatory annual financial burden or any other sort of financial levy levied upon a taxpayer by the government so as to finance various public needs and government expenditure. A person may be subjected to tax for personal income or any other purposes like purchasing property or vehicle. A person may also be liable to tax for occupational or business activity. Evasion or refusal to pay is punishable by law, and in case of financial crime, the penalty is imprisonment for a period not less than 5 years or a fine not exceeding the applicable amount. In certain cases, tax assessment is discretionary.
The responsibility of income tax in India lies on the shoulders of the individual, trusts, non-profit bodies, individuals and corporate entities. A large number of provisions are there which facilitate the people in taking help from professionals and experts dealing with various kinds of tax laws. There are specialized agencies that educate students and help them get knowledge about various tax provisions and their application. Since the taxation system of many countries differs very much from India, you need to consult with a CPA who is an experienced and licensed professional, in order to understand your tax situation in India.
The scope of income taxes is more extensive in comparison to indirect taxes levied on property or goods. Among direct taxes, the three major categories are Excise, Importance and Sales Taxes. The customs duty, levied on imported goods, is commonly called as the base tax. The major sources of revenue for the government include levy on income, import, export and income, estate and gift taxes. Almost all the states of India levy taxes, but the way in which they are levied varies widely.
The major source of revenue for the government includes levy on property, production, consumption and import duties. On the other hand, the indirect taxes are based on value-added tax (VAT), indirect tax on sales, and value-added tax on income. These taxes are collected by the government through compulsory and voluntary contributions. Excise duty is considered as the most problematic tax in India. Excise duty is levied on imported goods and the exportation of items is exempted from this tax if the cost thereof is less than the income of the importer. The rate of this tax is usually very high in the urban areas.
If there is a deficit in the payment of the excise duty, the excess amount is charged as tax liability. It is also imposed when there is any payment of refund due to the IRS. If a person pays excess income tax and not refund, the amount is considered as taxable income and liable to be imposed as taxes on the basis of income. If the amount of excess is less than the taxable income, the excess amount of tax paid is liable to be deducted as a deduction in the income tax. There are separate norms and regulations for different kinds of taxes and these are discussed below:
As you can see, there are several kinds of taxes on individuals in India. A tax calculator can be used for estimating the tax base and rate of taxation. A person can even calculate his/her tax payments and benefits with the help of a tax calculator. This helps them analyze their annual income, expenditure and savings and choose the right kind of tax regime and plan for their future.