it is about indian taxation system for uptu studens.

1. A Glance on Indian Taxation
Presented By-
Utkarsh Srivastav, EN Final Year,
Shri Ram Murti Smarak College Of
Engg. & Tech. , unnao

2. SALES TAX(VAT)
SALES TAX
STATE SALES TAX CENTRAL SALES TAX

3. Production
within state
Only SST No CST
State of
manufacturing
Transportation
to another
state
Only CST
State Sales Taxation system
Central Sales Taxation System

4. Scheme of Sales Tax
It is optional for the firm to get CST registration,
while just after a certain limit firm has to get
state sales tax registration.
CST < SST
Currently in India CST is 4% or SST(whatsoever is
lower). That’s why registration of CST would give
significant economic advantage.

5. AN ENTREPRENEUR MUST KNOW-
1. Whether registration is compulsory or not.
2. Rate of sales tax.
3. Form ‘c’ is required for CST.
4. A purchased product can be sold.
5. A resold product may have zero or lower
sales tax.
Note- However , sales tax has been replaced by uniform VAT throughout the
country.

6. Registration Under VAT
Entrepreneur’
s firm
Online
registration
for VAT
A distinct
registration
number

7. Sample Invoice

8. Payment Under VAT
1. VAT registration as dealer.
2. Maintenance of the required books of
account.
3. Filling of periodical returns showing all sales
and purchase.
4. The VAT payable is to be deposited in the
treasury(through authorised bank) with the
challan in a prescribed form.

9. EXCISE DUTY
Excise Duty is imposed by the Central Government
on the production of specific goods.
It is levied on the goods cleared from the factory.
Different rates of Excise Duty is applied on different
type of products.

10. AN ENTREPRENEUR MUST KNOW-
1. Is it compulsory for him to pay Excise duty
because small entrepreneur & some specific
goods are exempted from excise duty.
2. Rate of excise duty on the product
manufactured by entrepreneur.
3. An entrepreneur has to familiarize himself
with the procedure , records and formalities.
Note- goods are exempted if they are exported.

11. A GLANCE ON DIFFERENT TYPE OF GOODS &
THEIR CURRENT EXCISE DUTY RATES

14. INCOME TAX
Income tax act, 1961 has made it manadatory
for all people , whose income during the
previous year is more than the prescribed
exemption limit, to pay tax at prescribed limit.

15. Obligations of an Entrepreneur as a
TAX payer
1. Maintenance of Account Books.
2. Permanent account number(PAN)
3. Income Tax Return
4. Payment of Tax.

16. Computation of Income from Business
For computation of business income, the profit from
the business should be determined & adjustment
should be as per provisions of income tax act 1961.
Deductions expressly allowed in computing business
income-
1. Rent rates, taxes, repairs & insurance of business
building, machinery, plant, furniture.
2. Expenditure on Scientific Research.
3. Expenditure on Patents and Copyrights.

17. 4. Insurance premium against risk of damage or
destruction of stocks.
5. Bonus and commission to employees.
6. Interest on borrowed capital.
7. Contribution to provident fund.

18. INCOME TAX benefits to small scale
Entrepreneurs
1. Tax holiday
2. Depreciation allowance
3. Rehabilitation allowance
4. Investment allowance

19. Tax Holiday
• (Section 80J of income tax act 1961), new
industrial undertakings, including small scale
industries, are exempted from the payment of
income tax on their profit subjected to a
maximum of 6% per annum of their capital
employed for 5 years.

20. Depreciation Allowance
• (Section 32, 1961 act) A small scale industry is
entitled to a deduction on depreciation
account on block of assets at the prescribed
rate.
• In case of small scale industry, deduction from
actual cost of plant & machinery is allowed
subject to a maximum of Rs. 20 lakhs.

21. Rehabilitation Allowance
• (Section 33B, 1961 act) It is granted to the small
scale units whose business is discontinued on
account of-
1. Flood , Cyclone , Earthquake or other natural
calamities.
2. Civil disturbance.
3. Explosion or accidental fire.
4. Action taken in combating an enemy.
Note- it must be used within 3 year. Only 60% of the amount
of deductions allowable.

22. Investment Allowance
• (Section 31A, 1961 act) it is allowed at the rate
of 25% of the cost of new plant installed.
• In comparison to the other industries Small
Scale Industries have an advantage in claiming
a deduction of investment allowance.
• It can be used in a year of installation failing
which the benefit will be forfeited.

23. Income Tax concession to Small Scale
Industries in Backward/Rural Areas
• (section 80 H & 80 HHA) the entrepreneurs are
allowed in deduction of 20% on it’s profit & gains
provided the unit satisfies the following
conditions-
1. It must be in a backward/rural area.
2. No splitting or reconstruction of an existing unit.
3. Account is audited by a chartered accountant.
4. 10 or more workers with aid of power or 20 or
more without aid of power.