Income Tax

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History

Income tax levels in India were very high during 1950-1980, in 1970-71 there were 11 tax slabs with highest tax rate being 93.5% including surcharges. In 1973-74 highest rate was 97.5%. But to reduce tax evasion tax rates were reduced later on, by "1992-93" maximum tax rates were reduced to 40%. [2][3] [edit]Residential status, Scope of taxable income & Charge

[edit]Charge to Income-tax
Whose income exceeds the maximum amount, which is not chargeable to the income tax, is an assesse, and shall be chargeable to the income tax at the rate or rates prescribed under the finance act for the relevant assessment year, shall be determined on basis of his residential status. Income tax is a tax payable, at the rate enacted by the Union Budget (Finance Act) for every Assessment Year, on the Total Income earned in the Previous Year by every Person. The chargeability is based on nature of income, i.e., whether it is revenue or capital. The rates of taxation of income are-: Income Tax Rates/Slabs Rate (%) (applicable for assessment year 2013-14) Net income range (For resident woman below 60 years on the last day of the previous year)Net income range (For resident senior citizen1)Net income range (For super senior citizen2)Net income range (For any other person excluding companies and co-operative societies)Income Tax rates3 Up to Rs. 200000Up to Rs. 250000Up to Rs. 500000Up to Rs. 200000Nil Rs. 200001-500000Rs. 250001-500000-Rs. 200001-50000010%

Rs. 500001-1000000Rs. 500001-1000000Rs. 500001-1000000Rs. 500001-100000020% Above Rs. 1000000Above Rs. 1000000Above Rs. 1000000Above Rs. 100000030% ^1 Senior citizen is one who is 60 years or more at any time during the previous year but not more than 80 years on the last day of the previous year. ^2 Super senior citizen is one who is 80 years or more at any time during the previous year. ^3 Surcharge isn't applicable for any person excluding companies whose taxable income exceed Rs. 1 crore. Education cess at 2% and Secondary and higher education cess at 1% of income-tax applicable for all person. These slab-rates aren't applicable for the incomes which are to be taxed at special rates under section 111A, 112, 115, 161, 164 and 167. For instance, long-term capital gains (except the one mentioned in section 10(38))for all assessees is taxable at 20%. [edit]Residential Status

The residential status of the assessee is useful in determining the scope or chargeability of the income for the assessee, i.e, whether taxable or not. For an individual person, to be a resident, any one of the following basic conditions must be satisfied:- Presence of at least 182 days in India during the previous year. Presence of at least 60 days in India during the previous year and 365 days during 4 years immediately preceding the relevant previous year. However, in case the individual is an Indian citizen who leaves India during the previous year for the purpose of employment (or as a member of a crew of an Indian ship) or in case the individual is a person of Indian origin who comes on a visit to India during the previous year, then only the first of the above basic condition is applicable. To determine whether the resident individual is ordinarily resident the following both additional conditions are to be satisfied:- Resident in India in at least 2 out of 10 years immediately preceding the relevant previous year. Presence of at least 730 days in India during 7 years immediately preceding the relevant previous year. If the individual resident satisfies only one or none of the additional conditions, then he is not ordinarily resident. (In case the person is not an individual or an HUF, then the residential status can only be either resident or non-resident) [edit]Residential status of a person other than an individual Type of personControl & management of affairs of the taxpayer is wholly in IndiaControl & management of affairs of the taxpayer is wholly outside IndiaControl &...
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