TAXATION

What is TAX?
• A tax is a mandatory fee or financial charge levied
by any government on an individual or an
organization, in order to fund government
spending and various public expenditures
When Taxes Introduced in India?
• In India, The First Income Tax was introduced in
1860. It was Implied by James Wilson (First
Finance Minister) to over come heavy loses
suffered by the British Government due to India’s
freedom fight movement in 1857.
Types of Taxes in India
 Types of Taxes in India

Direct Taxes Indirect Taxes

• Levied on Incomes • Levied on Profits for goods and
• Ex. Income Tax services rendered
• Imposed Directly on Individuals • Ex. GST
and Entities • Imposed Indirectly on Ultimate
Consumers
 Income Tax
• Income tax is a type of tax that governments
impose on income generated by individuals
and businesses.
When Income Taxes to be paid?
Financial Year Assessment Year
2020-21 2021-22
The financial year is the year in The year that comes after the FY
which you have earned the income Income Earned in FY will be assessed & Taxed
Taxes will be paid in The Assessment Year

Ways of Collecting Income Tax

SELF ASSESSMENT TAX ADVANCE TAX TDS (Ex. Services)* TCS (Ex. Goods)*
(Paid in Assessment Year) (Paid in the Financial year) (Paid in the Financial year

Paid by the Individual / Entities Ex. Mr. A Paid by the Individual / Entities
(Who Earned Income) (Who Paid to Mr. A )
CHALLAN NO. 281 CHALLAN NO. 280
 What is TDS?
TAX DEDUCTED AT SOURCE
• TDS stands for tax deducted at source. As per the
Income Tax Act, any company or person making a
payment is required to deduct tax at source if the
payment exceeds certain threshold limits. TDS has to be
deducted at the rates prescribed by the tax department
• the payer to deduct tax due before paying the balance to the payee
• It is not another type of Tax rather a way of collection of Income tax.
• A form of advance tax.
• This concept was first introduced on
the principle of “pay as you earn”
 What is TDS?
TAX DEDUCTED AT SOURCE

• TDS stands for tax deducted at source. As per the Income Tax Act,
any company or person making a payment is required to deduct tax
at source if the payment exceeds certain threshold limits. TDS has to
be deducted at the rates prescribed by the tax department.

• The company or person that makes the payment after deducting TDS
is called a deductor and the company or person receiving the payment
is called the deductee. It is the deductor’s responsibility to deduct TDS
before making the payment and deposit the same with the
government. TDS is deducted irrespective of the mode of payment–
cash, cheque or credit–and is linked to the PAN of the deductor and
deducted.
TDS Rate & Slabs Applicable for Financial Year 2021-22 or Assessment Year 2022-23
*Only Major Slabs listed here (Refer PDF file for Complete Slabs & rates)
If No
Section Nature of Payment Threshold Limit for deduction tax Individual Company PANInvalid PAN
(Rate)
As per Slab [Please note that no Change in Slab
192 Salary Slab Rates Slab Rates 30
Rates have been introduced for FY 2021-22]
Premature withdrawal from Employee
Provident Fund (Payment of accumulated
192A Rs. 50000.00 10 NA 20
balance of provident fund which is taxable in
the hands of an employee)
Interest other than interest on securities –
194A Banks Time deposits, Recurring deposit and Senior Citizen Rs. 50000.00 others - 40,000.00 10 – 20
Deposit in Co-op Banks
Income by way of winnings from lotteries,
194B crossword puzzles, card games and other Rs. 10000.00 30 30 30
games of any sort
194BB Income by way of winnings from horse races Rs. 10000.00 30 30 30
194 – I RENT
194 -I(a) Plant & Machinery Rs. 240000.00 2 2 20
194 -I(b) Land or building or furniture or fitting Rs. 240000.00 10 10 20
Transfer of certain immovable property other
194 -IA Rs. 50,00,000.00 1 1 20
than agriculture land
Payment of Rent by Individuals or HUF not
194 -IB Rs. 50,000 per month 5 – 20
liable for Tax Audit
194 -J Fees for professional or technical services: Call Centres Rs. 30000 2 2 20

194-J Fees for professional or technical services: Other Cases Rs. 30000 10 10 20
Purchase of goods (applicable w.e.f
194 – Q Rs 50,00,000.00 0.1 0.1 –
01.07.2021)