Tax Meaning and Types

Tax Meaning, Types, Income Tax and Tax Rates for FY 2017-18 (AY 2018-19)
Tax Meaning

Tax Meaning,Types, Income Tax and Tax Rates for FY 2017-18 (AY 2018-19)

What is Tax?:

Tax Meaning: Tax may be defined as a compulsory extraction made by Government from the hard earned income of the general public for their public purpose. It is a financial charge or other levy imposed on individual or a legal entity by government. Taxes form a pool of resources to be used for the collective benefit of the public. However taxes lack direct quid-pro-quo between the tax payer and the government. It means that tax payer cannot claim direct and equal reciprocal benefits as a consideration of taxes paid.
Types of Taxes:—
There are basically two types of taxes:
1. Direct Taxes: Direct taxes are collected directly from the tax payers and they have to be paid by the persons on whom it is imposed. These are levied on one person and collected from same person. The levying of tax means impact of tax and collection of tax means incidence of tax. If both impact and incidence of tax are on same person, such tax is called direct tax. Income tax, corporate tax and wealth tax are the example of direct taxes.
2. Indirect Taxes
Indirect taxes are those, which are levied on one person and collected from another person. If both impact and incidence of tax are on two different persons, such tax is called indirect tax. Sales tax, VAT, Custom duty, excise duty are examples of indirect taxes.

Income Tax:
Income tax is the tax imposed on the total income earned by an assesses during the previous year at current rates of tax.

Income Tax Rates for the Financial Year 2017-18 (Assessment Year 2018-19):

Income Tax Slabs For Individual (less than 60 years) (Both men and women), HUF, AOP or BOI, Artificial Juridical Person:

Income Tax Rate
Upto Rs.250000 Nil
Income Between Rs.2,50,001-Rs.5,00,000 5%
Income Between Rs.5,00,001-Rs.10,00,000 20%
Income Above Rs.10,00,000 30%
Surcharge: 10% of Income Tax if total income exceeds Rs.50 lakh and upto Rs. 1 Crore and 15% of Income tax where total income exceeds 1 Crore
Education Cess: 2% of Tax and Surcharge
Secondary and Higher Education Cess: 1% of Income Tax and Surcharge

Income Tax Slabs For Individual (Senior Citizens) (60 years old or more but less than 80 years) (Both men and women)

Income Tax Rate
Upto Rs.300000 Nil
Income Between Rs.3,00,001-Rs.5,00,000 5%
Income Between Rs.5,00,001-Rs.10,00,000 20%
Income Above Rs.10,00,000 30%
Surcharge: 10% of Income Tax if total income exceeds Rs.50 lakh and upto Rs. 1 Crore and 15% of Income tax where total income exceeds 1 Crore
Education Cess: 2% of Tax and Surcharge
Secondary and Higher Education Cess: 1% of Income Tax and Surcharge

Income Tax Slabs For Individual (Super Senior Citizens) (80 years old or more ) (Both men and women)

Income Tax Rate
Upto Rs.500000 Nil
Income Between Rs.5,00,001-Rs.10,00,000 20%
Income Above Rs.10,00,000 30%
Surcharge: 10% of Income Tax if total income exceeds Rs.50 lakh and upto Rs. 1 Crore and 15% of Income tax where total income exceeds 1 Crore
Education Cess: 2% of Tax and Surcharge
Secondary and Higher Education Cess: 1% of Income Tax and Surcharge

Income Tax Rates/ Income Tax Slabs for the Financial Year 2016-17 (Assessment Year 2017-18)

Income Tax Slabs For Individual (less than 60 years) (Both men and women), HUF, AOP or BOI, Artificial Juridical Person:

Income Tax Rate
Upto Rs.250000 Nil
Income Between Rs.2,50,001-Rs.5,00,000 10%
Income Between Rs.5,00,001-Rs.10,00,000 20%
Income Above Rs.10,00,000 30%
Surcharge: 15% of Income tax where total income exceeds 1 Crore
Education Cess: 2% of Tax and Surcharge
Secondary and Higher Education Cess: 1% of Income Tax and Surcharge

Income Tax Slabs For Individual (Senior Citizens) (60 years old or more but less than 80 years) (Both men and women)

Income Tax Rate
Upto Rs.300000 Nil
Income Between Rs.3,00,001-Rs.5,00,000 10%
Income Between Rs.5,00,001-Rs.10,00,000 20%
Income Above Rs.10,00,000 30%
Surcharge: 15% of Income tax where total income exceeds 1 Crore
Education Cess: 2% of Tax and Surcharge
Secondary and Higher Education Cess: 1% of Income Tax and Surcharge

Income Tax Slabs For Individual (Super Senior Citizens) (80 years old or more ) (Both men and women)

Income Tax Rate
Upto Rs.500000 Nil
Income Between Rs.5,00,001-Rs.10,00,000 20%
Income Above Rs.10,00,000 30%
Surcharge: 15% of Income tax where total income exceeds 1 Crore
Education Cess: 2% of Tax and Surcharge
Secondary and Higher Education Cess: 1% of Income Tax and Surcharge

Must See: Six Steps of e-Filing and e-Verification of Income tax Return

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