Question { Amara Raja, 11713 }

what is the rate of income tax, if a person gets 200000 per
annum, what are entries in tally? what is the income tax to
be deducted?

Answer

I don't know who asked is question, he/she is not specific
about the doubt. In income tax person includes,
Individual,HUF(Hindu Undivided Family),Company,Firm and
Association of Persons etc.....

The tax rate is different for all this category of persons.
I'm just assuming he/she require tax rate for the
assessment year 2012-13 for "Male" person who is below 60
years so tax rate as follows
0 to 1,80,000 tax rate is 0%
1,80,001 to 5,00,000 tax rate is 10%
5,00,001 to 8,00,000 tax rate is 20%
8,00,001 and above tax rate is 30%

If it's female person who is below 60 years tax rate for
A.Y.2012-13 is
0 to 1,90,000 tax rate is 0%
1,90,001 to 5,00,000 tax rate is 10%
5,00,001 to 8,00,000 tax rate is 20%
8,00,001 and above tax rate is 30%

In case of senior citizen i.e more than 60 years (male or
female)tax rate as follows
0 to 2,50,000 tax rate is 0%
2,50,001 to 5,00,000 tax rate is 10%
5,00,001 to 8,00,000 tax rate is 20%
8,00,001 and above tax rate is 30%

So coming to our question, lets apply above tax rate for
male individual(less than 60years age) who earned 2,00,000
for the Assessment year 2012-13 is 2,00,000
As we know upto 1,80,000 no tax or tax rate is Nil and we
have to apply 10% rate to remaining 20,000 (2,00,000-
1,80,000) that will be Rs.2000 (20000*10%)
and plz dnt forget to add Education Cess@2% and Secondary
Higher Educations Cess(SHEC)@1% on income tax payable.
To total income tax payable is 2000(20000*10%)+40(2000*2%)
+20(2000*1%)= 2060

For further queries you can catch me at
karthik.dale@gmail.com

Question { 4996 }

From Buyer's point of view, In Interstate purchase to save
tax we issue "C" form but at the same time can u tell me by
allowing issuing "c" form govt bearing any losses in
collection of taxes. e.g.while giving c form i only pay 2%
instead of 12.5% the is it loss to govt of 10.5%, if yes
then why govt. allowing "c" form, pls explain.

Answer

Good Question. Buyer issue "C" form to sellar while
purchasing from other states (Inter State Purchase) so that
tax rate will be less. In this case govt is not losing any
tax amount. Because the buyer who buys from other state
will sell those goods in his respective state, so govt will
get tax again from this buyer and this time rate of tax is
as per that state rules.

Lets take an example to understand this situation clearly.
X&Co a dealer from Andhra Pradesh who purchased goods from
Y&Co(Sellar) who is belongs to Maharasta. Mr. X&Co issued
a "C" form to Mr. Y&Co and paid inter state tax @ 2%.
Once X&Co received goods he sold goods to Z&Co(Z&Co belongs
to same state i.e Andhra Pradesh). And collected 12.5% tax
from Z&co and paid to govt.

If you abserve above example tax burden is transfering
from buyer to another buyer and Central govt got 2% tax on
1st situation and state govt got 12.5% tax on 2nd
situation. Please dont assume that govt got 2% & 12.5%
total 14.5% as tax amount. Govt will give input tax credit
fecility,i.e.roughly say you can set off your payment by
reducing the amount which you paid extra.

If you need more clarification on this you can reach me @
Karthik.dale@gmail.com