GIVE MR KNOWLEDGE IN SIMPLE FORMAT

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27 September 2010 GOOD MORNING SIR,
CAN ANYONE EXPERT GIVE ME DETAIL OF ALL TAXES MEANS INCOME TAX, TDS, SALE TAX, EXCISE, SERVICE TAX IN SIMPLE FORMAT.

Ajay Mishra

Ajay Mishra (Expert)
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27 September 2010

Income Tax: A tax levied on net personal or business income.

TDS: Tax deduction at source (TDS) means that specified taxes are deducted from the recipient's income by the payer prior to payment. According to the India Income Tax Act, TDS must be done on such income as salaries, interest, dividends, rents, fees for professional and technical services, etc. In this way the payments to the recipient are net income (gross income less taxes).

Sales Tax: Levy imposed on the sale of goods and services. A sales tax on the manufacture, purchase, sale, or consumption of a specific commodity is known as an excise tax. Though excise taxes have been used since ancient times, the general sales tax is a comparatively recent innovation. Sales taxes are ad valorem taxes, imposed "according to the value" (i.e., monetary value) of the taxable commodity. They are classified according to the levels of business activity at which they are imposed — production, wholesale, or retail. They account for significant portions of the revenue of most U.S. states and Canadian provinces. A variation of the sales tax, the value-added tax, became popular in western European countries and is widely used. Most sales taxes are borne by the consumer, since even where they are levied on production or wholesale goods, part or all of the cost is shifted to the consumer in the form of higher prices. Because the retail sales tax is considered a regressive tax, essential goods such as food, clothing, or drugs are sometimes exempted or taxed at a lower level.

Excise Tax: 1. An indirect tax charged on the sale of a particular good.

2. A penalty tax applied to ineligible transactions in retirement accounts. This penalty is assessed by and paid to the IRS.
Investopedia Says:
1. Excise taxes are considered an indirect form of taxation because the government does not directly apply the tax. An intermediary, either the producer or merchant, is charged and then must pay the tax to the government. These taxes can be categorized in two ways:

- Ad Valorem - A fixed percentage is charged on a particular good.
- Specific - A fixed dollar amount dependent upon the quantity purchased is charged.

2. Here are some examples of situations in which excises taxes are charged on transactions in retirement accounts:
- A 6 % excise tax applies to excess IRA contributions that are not corrected by the applicable deadline.
- A 10% excise tax applies to distributions from an IRA, qualified plan or 403(b) account, that occur before the participant reaches age 59.5. - A 50 % excise tax applies to required minimum distribution amounts not withdrawn by the applicable deadline (referred to as an excess-accumulation penalty).
Service Tax: Service tax is a part of Central Excise in India. It is a tax levied on services provided in India, except the State of Jammu and Kashmir. The responsibility of collecting the tax lies with the Central Board of Excise and Customs(CBEC).
The Finance Minister of India, Pranab Mukherjee in his Budget speech has indicated the government's intent of merging all taxes like Service Tax, Excise and VAT into a common Goods and Service Tax by the year 2011. To achieve this objective, the rate of Central Excise and Service Tax will be progressively altered and brought to a common rate.[citation needed] In budget presented for 2008-2009 It was announced that all Small service providers whose turnover does not exceed Rs10 lakhs need not pay service tax.
Regards
CS Ajay Mishra

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