What is income tax,sales tax and vat?

Answers were Sorted based on User's Feedback



What is income tax,sales tax and vat?..

Answer / gayathriprasad

INCOME TAX

INCOME TAX, it is a Direct Tax collectd by the governemnt,
as the name suggests, is a tax on the income of an
individual. the persons liable to pay this tax are
determined based of the provisions of the come Tax Act. In
India, the income Tax Act classififes the income of
individuals into 5 different sources.
1) Income form Salaries.
2) Income from business and profession.
3) Income from house property.
4) Capital Gains.
5) other income.

According to the taxation laws in India, every company has
to pay a tax on income earned. Financial statements
prepared by an organisation, in accordance with the Income
Tax Act, may differe from the Statutory forms adopted by
the organisation. In India, the sttutory reporting form for
a company is defined by the companies Act, 1956.
TDS(TAX DEDUCTED AT SOURCE) is one of the modes of
collecting Income Tax.

SALES TAX

Sales Tax is a Indidrect tax on goods, is a levy on
purchases and sale of goods. it is levied under authority
of both central legislatin (Central Sales Tax) and state
governments' Legislations (Local Sales Tax). Central Sales
Tax is governed by the Central Sales Tax Act, 1956 which
covers inter-state transactions of sale of goods as well as
transactions of import of goods or export of goods. it
provides for the levy, collection and distribution of taxes
on sales of goods in the course of inter-state trade of
commerce.

A dealer shall be liable to pay tax under this Act on a
sale of any goods effected by him in the course of inter-
state trade or commerce, notwithstanding that no tax would
have been levidable (whether on the seller or purchaser)
under the Sales Tax law of the ppropriate state if that
sales had taken place inside that state.

The Local Sales TAx is government the respective Stte Sales
Tax Acts under which tax is levied on intra - stte
transactions of sales.


VAT (VALE ADDED TAX)

It is an indirect tax n goods, introduced in lieu of sales
tax. its objective i to ensusre a fair and uniform system
of taxation. the bsic premise of VAT is to tax the "true
value" added to the goods, at each stage of the transaction
chain. this ultimatelly reduces
1) Tax paid to the government
2) Cost/Tax passed on to the consumer.

As against sales tax, which is a single-point tax, VAT is a
multi-point tax. under a slaes tax regime, the vlaue of
goods to be taxed at each stage is computed as basic cost +
profit margin + sales tax paid at earlier stage. VAt does
away with the cascading effect of tax, by allowing a set
off for input tax, i.e. tax paid at the earlier stages on
purchases.

Is This Answer Correct ?    37 Yes 7 No

What is income tax,sales tax and vat?..

Answer / ashid puzhakkal, m.com.,b.ed.

Income tax is tax paid by the assessee on the income
recieved during a particular year.
Sales Tax is payable by the seller to the Govt. ie,
received from the buyer as part of consideration for sale
of goods.
VAT or Value Added Tax is indirect tax on goods introduced
in lieu of sales tax to ensure transaparency and greater
compliance. It is a multi-point tax.
VAT consists of INPUT TAX, OUTPUT TAX, INPUT CREDIT etc.

Is This Answer Correct ?    28 Yes 8 No

What is income tax,sales tax and vat?..

Answer / aijaz

great gayatri

great answer.

plz help me how to maintain BRS.if u have knowledge about
this
plz send me mail with Example.

my mail addres is aijaz_ajju@rediffmail.com

i will wait for this.

or else any one who knows plz send me

Is This Answer Correct ?    10 Yes 7 No

What is income tax,sales tax and vat?..

Answer / thiyagaraj

I need the defination for CST, Entry Tax, Octori, Service
Tax and TDS?

Is This Answer Correct ?    5 Yes 7 No

Post New Answer

More Accounting AllOther Interview Questions

While posting of FB50 entry therE showing errro msg " NOT ASSIGN COMPANY CODE OR CALCULATION PROCEDURE"

0 Answers  


what is the journal entry for bad debts?

32 Answers   Infosys,


whether unsecured loans written off can be transferred directly to capital reserve without crediting it to profit and loss account

0 Answers  


What is the difference between P/L A/c and Balance sheet? When an adjustment account is prepared?

6 Answers  


how could prepare a bank charges entry in the tally

12 Answers  






What is the purpose of a bank reconciliation statement?

4 Answers  


A is raise a bill to B of amt. 25000/ At the time of payment B will be deduct the TDS from which rate.This bill raised first time to B By A. Trilok Sharma (Vigneshwara Developers)

2 Answers  


Calculate Maximum allowable remuneration to working partners as for section 40b of the Income Tax Act 1. In case of professional firm'' 2. Incase of Business Firm

6 Answers  


Difference between funds flow statement & Cash flow statement

3 Answers   Capital IQ,


Rectification entries.

1 Answers   Franklin Templeton,


what is the point of sale

2 Answers   ABC,


salary is which type of account??

20 Answers   Cap Gemini,


Categories