It is intended to be a readable text, suitable for a threehour course for a class comprised of law students with widely different backgrounds. May, 2020 customs law basic concepts part 2 cma inter indirect tax idt in tamil. Ask your students about the last time they visited a national park, they played in a local playground, or if they ever enjoyed the fireworks in their citytown for the. Home page of central board of indirect taxes and customs. Indirect taxes can be defined as taxation on an individual or entity, which is ultimately paid for by another person. Assessee means a person by whom any tax or any other sum of money is payable under this act and includes every person in respect of whom any proceedings under this act have been taken for the. Customs duty is a type of indirect tax levied on goods imported into india as well as on goods exported from india. The main idea of gst is to replace existing taxes like valueadded tax, excise duty, service tax and sales tax. Federal fiduciary income tax workshop san jose, ca tuesday, july 18, 2017 youll be able to. When national product is measured, it is measured at current market prices. Indirect taxes indirect taxes are the charges levied by the state on consumption, expenditure, privilege, or right but not on income or property.
Basic concepts of indirect taxes 1 basic concepts of. Study 31 chapter 1 basic concepts unit1 income tax law. Direct tax objective type questions pdf download 2020 page 1. Income tax is a direct tax and we all try to save it to the best possible limit. Basic concepts of international taxation and dtaa 1 taxation of crossborder transactions 2 a transaction between two or more persons in two or more tax jurisdictions. If indirect taxes are imposed on commodities, market prices of the commodities go up. This tax was first imposed on the manufacturing of cotton yarn in 1894. Basic concepts of indirect taxes 8 iii article 246. The text integrates several of the cali drills that professor james edward maule villanova university prepared. Jan 12, 2016 gst is an indirect tax in lieu of tax on goods excise and tax on service service tax. Indirect tax concept indirect taxes are those whose burden can be shifted to others so that those who pay these taxes to the government do not bear the whole burden but pass it on wholly or partly to others. William kratzke, basic income tax 20, published by cali elangdell press.
Before one can embark on a study of the law of incometax, it is absolutely vital to understand some of the expressions found under the incometax act, 1961. Eam uy slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Customs law basic concepts part 2 cma inter indirect. Therefore, the prime difference between direct tax and indirect tax is the ability of the taxpayer to shift the burden of tax to others. Basic concepts of international taxation jacob frenkel, assaf razin, efraim sadka. Apr 26, 2020 income of a person trying to alienate his assets with a view to avoiding tax. Income tax act is used for determination of taxable income, tax liability and also provides procedure for assessment, appeal, penalties and prosecutions. Tax evasion and corruption merits and demerits of indian tax system merits 1. The gst is just like state level vat which is levied as tax on sale of goods. There are two main types of taxes 1 direct tax and 2 indirect tax. For tax purposes, a corporation is a separate 1 from itstaxpayer shareholders, meaning that the corporate entity is subject to taxation on corporatelevel events. Cenvat credit rules section c customs and foreign trade policy 1. There is no direct quid pro quo in the case of a tax.
Introduction and basic concepts of income tax act 1961. Pdf standard theory of the optimal mix of direct and indirect taxation implicitly assumes that. It gives the respective authority to union and state governments for levying tax. However, basic customs duty continues to be levied on imports. Payer of tax not sufferer of tax whereas sufferer of tax is not paying directly to the government i. Therefore, all such basic terms are explained and suitable illustrations are provided to define their. The good and services tax gst is the biggest and substantial indirect tax reform since 1947.
Chapter 2 income tax concepts 47 the federal income tax is based on a system of rules and regulations that determine the treatment of various items of income and expense. Gst will be a national level value added tax applicable on goods and services. Direct taxes include tax varieties such as income tax, corporate tax, wealth tax, gift tax, expenditure tax etc. It would be ideal to understand the following basic details of service tax, which are important for serving clients discharging duties liability of the service tax. Even though some of the taxes and duties are levied on the revenue outflows, broadly it can be laid down that in majority of the cases taxes and duties are levied on the revenue inflows of the public. Income of a person trying to alienate his assets with a view to avoiding tax.
Broadly divided into categories such as sale of goods, importedexported goods, offering of services and manufacture of goods. Every year finance act bring amendment to this act. Chapter 1 introduction and basic concepts what is tax tax is a fee charged by a government on a product, income or activity. It is usually imposed on a manufacturer or supplier who then passes on the tax to the consumer. A tax, as we know, is compulsory contribution made to the public authorities to meet the expenses of the government and the provisions of general benefit. Income tax is a direct tax while value added tax vat is an indirect tax. Customs duties levied on imports, excise duties on production, sales tax or value added tax vat at some stage in productiondistribution process, are examples of indirect taxes because. As such, it shares the characteristics of any type of system. This provides a starting point for understanding some of the basic guidance issued by the irs.
It is an indirect tax and collected from manufactures. Facilitation and taxpayers education wing fate 3 brochure irit01 updated june, 20 basic concepts of tax on income is present in pakistan for a period of, or periods amounting in aggregate to, 183 days or more in the tax year. Audience this tutorial has been designed to help beginners pursuing education in financial accounting or business management. Indirect taxation subject is paper 11 in cma inter examination and one the subject in cma. Financial accounting i about the tutorial this tutorial will help you understand the basics of financial accounting and its associated terminologies. Security of revenue curtails evasion of tax that used to. Jun 29, 2019 indirect taxes can be defined as taxation on an individual or entity, which is ultimately paid for by another person. Sale of agricultural land on 1st april, 1970 is an example of transfer of capital asset. With advice on everything from withholding to deductions to filing to handling ulp audits, bankrate s tax basics leads you through the process of rendering unto uncle sam. This duty is levied on imported goods under the customs. The body that collects the tax will then remit it to the government. A tax is not a voluntary payment or donation, but an enforced contribution, exacted pursuant to legislative authority. Discussion paper on key transitional issues in proposed gst regime. Introduction learning objectives after reading unit 1 of this chapter, you will be able to understand.
This book is the second edition of a basic income tax text. Cma inter indirect taxation study material december 2019 pdf. Basic concepts of indirect taxes 7 features of indirect taxes i an important source of revenue. Import of goods means bringing into india of goods from a place outside india. It is a tax on the estimated market value added to a product or material at each stage of its manufacture or distribution, ultimately passed on to the consumer. Section 11 of the internal revenue code code lists the progressive rates of tax on corporations. The concept of value added tax vat as an indirect tax was the brainchild of a german industrialist, dr. Indirect taxes are basically taxes that can be passed on to another entity or individual.
The key point to be made is that federal income taxation is based on a system. This can also be accessed via cakart android app and can be read on move using your android mobile phones. Consumers than pay the tax in the form of higher price of items. Aug 22, 2016 to buy dvds of ca cma cs call us at 05516050551 09889004575 01145695551. A transaction must be grounded in a business purpose other than tax avoidance. Understand the basic concepts of vat value added tax system is more transparent, uniform and less prone to tax evasion. Broad coverage tax is carried on upto the retail level i. The egovernance has developed the concept and strategies of efiling of income tax return. In india income tax is governed by the income tax act 1961. We assess the efficiency of the overall tax system using the two concepts of capital export neutrality and market neutrality. Basic concepts of income tax i charteredguidance a. Calculate distributable net income dni and taxable income. From the civil war to the 21 st century, the tax agencys work has changed with the times. Taxes are conventionally classified as direct taxes and indirect taxes.
Teach students about the concept of taxes sales tax, state income tax, property tax without diving too deep into the complex u. These two concepts are not the horns of an eitheror dilemma, but rather the limits of a range within which significant stages can be distinguished. If tax is levied directly on the income or wealth of a person, then it is a direct tax e. Everything owned and used for personal purposes, pleasure, or investment. Browse our indepth guides covering corporate tax, indirect tax, personal taxes, transfer pricing and other tax matters in more than 150 countries. An indirect tax is collected by one entity in the supply chain usually a producer or retailer and paid to the government, but it is passed on. Gst excise duty service tax sales tax vatcst entry tax entertainm. Gst is a comprehensive indirect tax levied on goods as well as services at the national level. Basic concepts of income tax income tax income free. Aug 02, 2019 free download cma inter indirect taxation study material pdf for december 2019 exams.
He is characterized by not requiring a direct or specific consideration by the administration reform tax creditor. Difference between direct taxes and indirect taxes illustrative list. The some important direct taxes imposed in india are as under. An indirect tax such as sales tax, per unit tax, va lue added tax vat, or goods and services tax gst is a tax collected by an intermediary such as a retail store from the person who. A tax is said to be direct tax when impact and incidence of a tax are on one and same person, i. His basic conclusion is that the percentage of reduction in. For the proper implementation of excise duty, central excise duty act, 1944 and central excise tariff ac, 1985 are applicable which is also known as ceat. Indirect taxes are a major source of tax revenues for governments worldwide and continue to grow as more countries move to consumption oriented tax regimes.
International trade and investment program, international finance and macroeconomics program free movements of goods and capital across national borders have important implications for both direct and. A direct tax is paid directly by an individual or organization to an imposing entity. Difference between direct and indirect taxes with examples. Assessment year sec 29 it means the period of twelve months commencing from 1st april to 31st of march the next year. Determine what income is reportable by fiduciaries. Tax is a fee charged by a government on a product, income or activity. Download objective type questions of direct tax pdf. There is a difference between the tax you pay on average and the tax rate charged on the last dollar of income. The most common example of indirect tax is the excise tax on cigarettes and alcohol. Indirect taxes india pdf download economics levied on goods and services sold by an intermediary to final consumers. Indirect taxes india pdf download economics free study material. Examine basic concepts and issues in the income taxation of estates and trusts. Market prices always reflect taxes and subsidies on the commodities produced. The marginal tax rate of 15 percent is greater than the average tax rate of 12.
This article concentrates mainly on chartered accountant in practice and also those in industry for getting the basic concepts of service tax law in brief. With respect to direct taxation income taxation a key issue is how the home country treats resident capital income originating abroad and nonresident capital. In reference to this, a prerfp meeting shall be organized virtually with prospective bidders on 18052020 monday at 1500 hrs. Cbic is planning to release rfp for selection of vendor for running of service centre at select edi sites. Federal fiduciary income tax workshop harrisburg, pa thursday, july 20, 2017 youll be able to.
It differs from a sales tax, which is levied only at the point of purchase. The good and services tax gst is the biggest and substantial indirect tax reform since the year 1947. It consolidated multiple indirect tax levies into a single tax thus subsuming an array of tax levies. Definitions and concepts of tax definition of tax the tax is a kind of tribute usually pecuniary obligations in favour of the tax creditor governed by public law. Gst is a single, destination based indirect tax levied on the value added to goods as well as services at each stage of the supply chain. Value added tax vat ad valorem tax the term ad valorem is latin for. Efiling of income tax is understood as successful filing of income tax return through the internet. Some examples of indirect taxes are sales tax, excise duty, vat, service tax, entertainment tax. Indirect taxes definition, types and examples, advantages. Obviously, differences in the scope of the concept of economic goods will produce corresponding differences in. The main objective behind levying such a tax is to consolidate multiple indirect tax levies into a single tax.
The purpose of this chapter is to enable the students to comprehend basic expressions. Some basic concepts like assessment year, previous year, income, person, assessee. The free ebook indirect taxation free pdf ebook is uploaded at. Chapter 6 direct and indirect taxes a tax may be defined as a pecuniary burden laid upon individuals or property owners to support the government, a payment exacted by legislative authority. A taxpayer, for example, pays direct taxes to the government for different purposes, including. Value added tax vat a value added tax vat is a form of consumption tax.
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