TAXATION

Indirect and Direct tax

Indirect-The tax which eff ects the person or group of persons

indirectly is called indirect tax

EX – Sales tax ,service tax , ,VAT

Direct Tax – tax imposed directly on tax payer

EX- Income tax ,property tax

Goods and service tax (GST)

Indirect tax levied on the supply of goods and services

Terms -

Dealer - person who buys goods and services for resale

Intra state sales - Sales in the state

Inter state – sales outside the state

In put GST -GST paid by dealers

Out Put GST - GST collected from customers

Type of taxes under GST

Central goods and service tax - (CGST)

State Goods and service tax - (SGST) OR Union territory goods and
services tax(UTGST)

Integrated goods and service tax (IGST)

5 slabs of collection of GST

-ESSEENTIAL ITEMS INCLUDING FOOD

-COMMON USE ITEMS

-STANDARD RATE

-MAXIMUM GOODS AND SERVICES STANDARD RATE

-LUXURY AND TOBACCO ITEMS

Manufacturer sells a washing machine to a dealer B for Rs12500 .The dealer B
sells it to the a consumer at a profi t of Rs 1500.If the sales are intra state and
rate of GST is 12% ,Find

a)The amount of Tax (Under GST) paid by dealer B to the central government .

b) The amount of tax received by the state government .

c)The amount that consumer pays to the machine .

A shopkeeper buys an article whose printed price is Rs 4000 from the
wholesaler at a discount of 20% and sells it to the consumer at the printed
price .If the sale are intra state and the rate of GST is 12 % , fi nd

a) The price of article inclusive of GST at which the shopkeeper bought it.

b) The amount of tax paid by the shop keeper to the state government

c) The amount which consumer pays for the article . .

The printed price of an air conditioner is RS 45000 .The wholesaler allows a
discount of 10% to the dealer .The dealer sells the air conditioner to a consumer
at a discount of 4% on the marked price .If the sales are intra state and rate of
GST is 18%,fi nd

i)the amount of tax (Under GST) paid by the dealer to central and state
government .

ii) The amount of tax received by central and state government .

iii)The amount (inclusive of tax) paid by the consumer for the air conditioner .
INCOME
TAX
-
INCOME TAX- RELATED TERMS

• Financial year –The period from fi rst April to 31 s t march

• Assessment year – The next af ter the fi nancial year is called

assessment year.

• Gross income –it is the total income of an individual earned

from diff erent sources

• Exemptions and deductions –salaried persons invest in some

plans that can help them to save tax –
 Exemptions and deductions
• House rent allowance

• Standard deductions (UP TO Rs 50000)

• Deduction under section 80 BC - ( up to 1.5 lakh )

NEW TAX REGIME
NOTE – Individual opting new tax regime will no be able
to get exemptions and deductions such as HRA ,
Standard deductions ,deductions under 80 c , 80 d ,80E
etc .

-Tax rebate under section 87 A for individual tax

payers is applicable .