Banking Awareness Latest Taxation System of Banks in India

TAXATION IN INDIA- TAXATION SYSTEM IN INDIA GENERAL AWARENESS BANKING SYSTEMS FOR BANK EXAMS-IMPORTANT QUESTION FROM TAXATION FOR IBPS PO SO CLERK EXAM

Taxation System is important because 6-7 questions are discussed in recent ONLINE exams. So this section is discussed in detail. In the Union Budget 2014 Income Tax exemption limit has been raised from Rs 2,00,000 to Rs 2,50,000. Tax exemption limit has been increased from Rs 2,50,000 to Rs 3,00,000 for senior citizens above 60 years of age. The savings limit has also been increased to Rs 1,50,000 from the existing Rs 1,00,000.

Banking Awareness Exam Notes on Taxation System In India

TAXATION SYSTEM IN INDIA GENERAL AWARENESS BANKING SYSTEMS
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TAXATION SYSTEM
It is the compulsory payment made to the government by the people or organizations.
IMPORTANT NOTE:
·         Maximum Revenue is obtained by Excise duty in India.
·         In State, Max Revenue is obtained by VAT.
·         In Central, Max Revenue is obtained by Corporation Tax

 TAXATION SYSTEM IN BANKING SYSTEMS

TYPES OF TAX
It is basically of two types.
     1.     DIRECT TAX
The tax which is paid by the same person on which it is levied (applied). The burden cannot be shifted to another people or agency or organization. The paid shall be made by the person who is liable to pay tax.
Example: Income tax

        2.     INDIRECT TAX
The tax which is levied (applied) on someone and paid by another (partially or fully paid by another people or agency). The burden can be shifted to another people.
Example: Service Tax

These taxes are applied by both central govt. and state government.

CENTRAL GOVERNMENT TAX
1.      Direct Tax
·         Income Tax: levied on income
·         Wealth Tax: levied on asset
·         Corporation Tax: levied on profit produced by producers

2.      Indirect Tax
·         Central Excise Duty:  levied on the production made by producers
·         Custom Duty: Import/ Export of any item
·         Service Tax: Any of the service
3.      Other Tax
·         Tax on sale and purchase of newspaper and advertisement
·         Tax on goods and passengers carried by train, sea and air (called terminal tax)
·         Tax on interstate transportation of goods

STATE GOVERNMENT TAX
1.      Direct Tax
·         Agriculture Income Tax: levied on land
·         Land Revenue
·         Professional Tax: levied on professional institutes
2.      Indirect Tax
·         State Excise Duty:
(On medical, narcotics, alcohol and toilet preparations)
·         Electricity Tax
·         Entertainment Tax
3.      Other Tax
·         Tax on Sale and Purchase of goods (other than newspapers and advertisement)
·         Tax on building, vehicle and animal
·         Tax on Transportation between district
        

MOST IMPORTANT: TAX COLLECTION AND DISTRIBUTION


(2-3 Question from this section are already discussed in SBI ONLINE Exam)

·         Some tax levied by central government but collected and retained by state government:
For example Stamp Duty & State Excise duty
·         Some tax levied and collected by central government but retained by state government:
For example Terminal Tax, Taxes on transection of stock exchange
·         Some tax levied and collected by central government but share between central & state government:
For example Income tax & Central Excise duty
·         Some tax levied and collected by state government:
For example Agricultural Income tax, Land revenue & Value added Tax (VAT)

Note:
These questions which are provided on the basis of information provided by plenty of candidate delivered recent SBI/IBPS PO/Clerk 2014. These questions are purely memory based and it is just an expectation, not claiming that these questions may repeat in recent SBI/IBPS PO/Clerk Exams 2014, 2015.

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