Property Taxes Saving Techniques

The Rum Excise Tax Cover-Over: Legislative History and Current Issues

Under current law, any excise tax collected on rum imported into the United States is transferred to or “covered-over” to the Treasuries of Puerto Rico (PR) and the United States Virgin Islands (USVI). In 2008, PR received over 1 million in revenue and the USVI received almost 0 million. The law does not impose any restrictions on how PR and USVI can use the transferred revenues. Both territories use some portion of the revenue to promote and assist the rum industry.

The cov

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The incidence of tax only falls on domestic consumption. b) The efficiency and equity of the system is optimized. c) There should be no export of taxes across taxing jurisdictions. d) The Indian market should be integrated into a single common market. e) It enhances the cause of co-operative federalism.

The amount of taxation that is addressed above does not include additional nips like; property taxes, sales taxes, and excise taxes. The current system that is in place has been carefully structured to “take a little here and a little there”. When you look at eh whole picture you may just be amazed at how little you have left of your hard earned dollar.

The other issue which may come up is the definition of input service with respect to transportation of inputs as such, transportation of inputs to job worker and return thereof, transportation of inputs or capital goods for repair, reconditioning etc. These services are very directly related to the manufacturing process and as such they are covered in the definition and so Cenvat Credit can be availed for service tax paid on availing these services.

Thus on theoretical, moral and economic ground- there is a case for efficient and honest tax administration. We will not require any independent proof that our tax administration is neither efficient nor honest. This paper is an attempt to examine the possibility of private sector participation in the tax administration so as to make is efficient and honest- and more so to inculcate the spirit that tax administration exist for the people.

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After the United States declared its independence and fought the Revolutionary War, the U.S. Congress relied on excise taxes on alcohol, tobacco and a few other products for revenue to pay off its war debts. These taxes were not popular and led to the Whiskey Rebellion during the administration of George Washington. The U.S. instituted direct taxes on real property, estates, and slaves, taxes which Thomas Jefferson abolished in 1802. The U.S. relied solely on excise taxes for a few more years until they were repealed in 1817. At that point the U.S. had plenty of public land to sell and it relied on the sale of land and on customs duties for its revenue until the Civil War.

This information was located in a report dated April, 2008 by the Treasury Inspector General: “The IRS estimated that between 13.9 million and 15.9 million business taxpayers would be eligible to claim the TETR and approximately billion were owed.” They also noted that As of November 24, 2007, approximately 721,410 of the 12.8 million business taxpayers who filed their returns made Federal Excise Tax claims of 6.6 million. This accounts for only 5.6 percent of the estimated number of businesses that could have claimed the credit and only 17.5 percent of what was collected. This means there is still over Billion dollars left to be claimed by the US Taxpayers.

For vehicle owners that only have one truck or a small fleet under 25, it is still possible to go in and file the heavy vehicle tax in person or by mail; however, most business owners and operators will agree that finding the time to do this or waiting for the Schedule One in the mail is far from convenient. You are required to file the Form 2290 for every single month that your vehicle is on our nation’s highways, and if you get caught avoiding this tax or pulling sneaky tactics to pay a lower fee, you can face additional penalties, legal fines, or even incarceration.

Individuals have the option of being refunded the actual amount paid, if they retained their telephone bills, or taking the standard refund. Those choosing the actual amount paid must include form 8913 Credit for Federal Telephone Excise Tax Paid with their return. Federal returns have an additional line for taxpayers who are claiming the standard refund.

Purchases made before January 1, 2010, may qualify for this deduction under the American Recovery & Reinvestment Act of 2009. A qualified motor vehicle includes a passenger automobile, light truck, or motorcycle, the original use of which, begins with that purchaser, and has a gross vehicle weight rating of 8,500 pounds or less. Purchases must occur after February 16, 2009 and before January 1, 2010.

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The Goods and Services Tax (GST) is value added tax on the consumption of the goods, paid by its original producers upon the change in goods or upon the transfer of the goods to its ultimate consumers.GST is proposed to be implemented in India by April 2012. The GST will replace all indirect taxes levied on goods and services by the Indian Central and State governments. It is aimed at being comprehensive for most goods and services with minimum exemptions.

The evolution of Indian service tax & excise tax to VAT was a long drawn process and in that regards going for GST will be a quantum jump in achieving comprehensive indirect tax reforms in India

The Indian government is redrawing tax reforms that will sweep away part of the current VAT system, a variety of state level direct and indirect taxes, excise duties, service tax and entertainment tax and replace them with a single Goods and Services Tax (GST).

The predicted rate for the proposed GST is said to be 20 percent. This should create a national tax standard across the country with consumers paying a single rate of GST across India abolishing all other state and central level taxes, including VAT, excise duty, service tax and luxury tax. The target date for implementation is the 1st of April next year to coincide with the start of the new fiscal year. Customs duty will be levied out of GST and is likely to be replaced by VAT on imports.

Currently, the various Indian states levy VAT at a 4 percent or 12.5 percent rate depending on the type of goods, with excise duty usually levied at 8 percent for most commodities. Services are taxed at 10.3 percent.

India is a federal republic and therefore the GST will be implemented concurrently by the central and state governments as CGST and SGST respectively. The objective will be to maintain a commonality between the basic structure and design of the CGST, SGST and SGST between states.

Announcement to this regard was done in finance budget 2007-2008 by then finance minister P.Chitambram as per which an Empowered Committee of state finance minister was formed to work with the Central Government to prepare a road map for introduction of GST in India. After this announcement, the Empowered Committee of State Finance Ministers decided to set up a Joint Working Group (May 10, 2007), with the then Adviser to the Union Finance Minister and the Member-Secretary of Empowered Committee as Co-convenors and the concerned Joint Secretaries of the Department of Revenue of Union Finance Ministry and all Finance Secretaries of the States as its members. This Joint Working Group, after intensive internal discussions as well as interaction with experts and representatives of Chambers of Commerce and Industry, submitted its report to the Empowered Committee (November 19, 2007).

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On the framework of this discussion a final version by Empowered Committee was prepared seeking comments from government of India. These comments where duly recorded and where sent to states Finance and tax heads for consideration. Later a team of concerned official from states and representatives of Gov of India submitted their final draft on structure of GST. An important interaction has also recently taken place between Shri Pranab Mukherjee, the Union Finance Minister and the Empowered Committee (October 19, 2009) on the related issue of compensation for loss of the States on account of phasing out of CST.

Salient features of the GST model

Salient features of the proposed model are as follows:

(i) The GST shall have two components: one levied by the Centre and the other levied by the States. Rates for Central GST and State GST would be prescribed appropriately, reflecting revenue considerations and acceptability. This dual GST model would be implemented through multiple statutes (one for CGST and SGST statute for every State).

(ii) The Central GST and the State GST would be applicable to all transactions of goods and services made for a consideration except the exempted goods and services, goods which are outside the purview of GST and the transactions which are below the prescribed threshold limits.

(iii) The Central GST and State GST are to be paid to the accounts of the Centre and the States separately. It would have to be ensured that account-heads for all services and goods would have indication whether it relates to Central GST or State GST (with identification of the State to whom the tax is to be credited).

(iv) Since the Central GST and State GST are to be treated separately, taxes paid against the Central GST shall be allowed to be taken as input tax credit (ITC) for the Central GST and could be utilized only against the payment of Central GST. The same principle will be applicable for the State GST. A taxpayer or exporter would have to maintain separate details in books of account for utilization or refund of credit

(v) Cross utilization of Input Tax Credit between the Central GST and the State GST would not be allowed except in the case of inter-State supply of goods and services under the IGST model.

(vi) Ideally, the problem related to credit accumulation on account of refund of GST should be avoided by both the Centre and the States except in the cases such as exports, purchase of capital goods, input tax at higher rate than output tax etc. where, again refund/adjustment should be completed in a time bound manner.

(vii) To the extent feasible, uniform procedure for collection of both Central GST and State GST would be prescribed in the respective legislation for Central GST and State GST.

(viii) The administration of the Central GST to the Centre and for State GST to the States would be given. This would imply that the Centre and the States would have concurrent jurisdiction for the entire value chain and for all taxpayers on the basis of thresholds for goods and services prescribed for the States and the Centre.

(ix) A uniform State GST threshold of gross annual turnover of Rs.10 lakh both for goods and services for all the States and Union Territories may be adopted with adequate compensation for the States (particularly, the States in North-Eastern Region and Special Category States) where lower threshold had prevailed in the VAT regime.

(x) The States are also of the view that Composition/Compounding Scheme for the purpose of GST should have an upper ceiling on gross annual turnover and a floor tax rate with respect to gross annual turnover. In particular, there would be a compounding cut-off at Rs. 50 lakh of gross annual turn over and a floor rate of 0.5% across the States. The scheme would also allow option for GST registration for dealers with turnover below the compounding cut-off.

(xi) The taxpayer would need to submit periodical returns, in common format as far as possible, to both the Central GST authority and to the concerned State GST authorities.

(xii) A tax payer 13 digit identification number will be issued . This would bring the GST PAN-linked system in line with the prevailing PAN-based system for Income tax, facilitating data exchange and taxpayer compliance.

(xiii) To make it simpler for tax payer, functions such as assessment, enforcement, scrutiny and audit would be undertaken by the authority which is collecting the tax, with information sharing between the Centre and the States.

On application of the above principles, it is recommended that the following Central Taxes should be, covered under the Goods and Services Tax: (i) Central Excise Duty (ii) Additional Excise Duties (iii) The Excise Duty levied under the Medicinal and Toiletries Preparation Act (iv) Service Tax (v) Additional Customs Duty, commonly known as Countervailing Duty (CVD) (vi) Special Additional Duty of Customs – 4% (SAD) (vii) Surcharges.

(viii) Cesses.Following State taxes and levies would be, to begin with, subsumed under GST: (i) VAT / Sales tax (ii) Entertainment tax (unless it is levied by the local bodies). (iii) Luxury tax (iv) Taxes on lottery, betting and gambling. (v) State Cesses and Surcharges in so far as they relate to supply of goods and services. (vi) Entry tax not in lieu of Octroi.

 

In a two-week television ad buy, the AFL-CIO is calling on working families to tell their senators: Pass Health Care. Dont Tax Benefits. The ad, released today, will launch on Sunday, December 6, 2009. The ad features diverse workers who say passing health care reform is a must, not an option—but taxing workers health benefits is wrong. The ad will run inside the Beltway beginning Sunday, then in key Senate states to be announced on Monday.
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After the United States declared its independence and fought the Revolutionary War, the U.S. Congress relied on excise taxes on alcohol, tobacco and a few other products for revenue to pay off its war debts. These taxes were not popular and led to the Whiskey Rebellion during the administration of George Washington. The U.S. instituted direct taxes on real property, estates, and slaves, taxes which Thomas Jefferson abolished in 1802. The U.S. relied solely on excise taxes for a few more years until they were repealed in 1817. At that point the U.S. had plenty of public land to sell and it relied on the sale of land and on customs duties for its revenue until the Civil War.

The cost of the Civil War prompted Congress to restore the excise taxes and to impose a tax on personal income. The tax rate at that time was 3% and proved inadequate for the war needs, so Congress passed new excise taxes on a broader range of items and began taxing licenses, professions, and trades. Following the Civil War the need for revenue declined and Congress abolished the income tax in 1872. For the next 30 years nearly all revenue was collected from the various excise taxes.

Congress passed a flat rate income tax of 2% in 1894, but the Supreme Court ruled that the new tax was a direct tax and that it was not apportioned according to each state’s population, as required by Article 1 of the Constitution. The Spanish-American War forced the U.S. to increase tariffs and excise taxes, but it was vigorously debated that the U.S. could not continue to sustain itself with high tariffs and excise taxes and that those taxes were disproportionately burdensome to the less affluent.

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The ensuing debates about excise taxes, tariffs, property taxes, and income taxes led to the 16th Amendment to the Constitution in 1909 which allowed the Federal government to levy a tax on individual lawful incomes. The amendment clarified the earlier Supreme Court ruling by essentially saying that the tax on income was not a direct tax and that it could be levied without regard to the population of each State. Ironically, the amendment was proposed by conservatives in Congress who believed that the amendment would never be ratified and who hoped that the failed amendment would defeat the idea of a tax on income forever. However, in 1913 the amendment was ratified by 36 of the 48 States, the necessary three-fourths majority, and then ratified by 6 more States.

The new income tax law passed by Congress established tax rates of 1% to 7% and included generous exemptions and deductions. As a result, only 1% of the population paid income tax during the first year following the passage of the tax law.

When the U.S. entered into World War I the need for revenue greatly increased. Over the next few years the tax on incomes was increased several times, starting with the 1916 Revenue Act. The War Revenue Act of 1917 reduced exemptions and raised the tax rate again. The 1918 tax act raised the bottom tax rate to 6% and the upper rate to 77%.

Since the end of World War I the tax rate has changed many times, reflecting the needs of the Federal government at the time of the change. For example, during the prosperity of the 1920’s, the tax rate was reduced to a minimum rate of 1% and a maximum rate of 25%. As the United States’ economy has grown in strength and the Federal government has grown in size, the income tax has become an increasingly important segment of the government’s revenue. As a result, tax laws and the tax code have been revised and refined constantly in an effort to meet the changing revenue needs of the Federal government.

Financial Accounting SFCC Spring 2008 Crosson Chapter 8 videos

The Liquor Tax Law of 1896: The Excise and Hotel Laws of the State of New York, as Amended to the Legislative Session of 1897 … With Complete Notes, Annotations and Forms (1896)

Originally published in 1896. This volume from the Cornell University Library’s print collections was scanned on an APT BookScan and converted to JPG 2000 format by Kirtas Technologies. All titles scanned cover to cover and pages may include marks notations and other marginalia present in the original volume.

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Internal Revenue Code: Income, Estate, Gift, Employment and Excise Taxes As of June 1, 2002

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Q1: Explain the sources of public revenue?

Ans: SOURCES OF PUBLIC REVENUE:

*INTRODUCTION:

~ Public finance is the study of the financial operations of the state and is concerned with the income and expenditure of public authorities and the adjustment of one with the other.

~ Public finance includes public revenue, public expenditure and public debt.

~ Public revenue is the income of the Government raised from all sources in order to meet the public expenditure.

*MEANING:

~ Public revenue refers to government revenue. The important sources of public revenue are taxes, sale of public goods and services, fees, fines, donations, etc.

~ The source of public revenue can be : TAX REVENUE, NON-TAX REVENUE.

*SOURCES:

A) TAX REVENUE:

~ Taxes are the most vital sources of public revenue.

~ ‘A tax is a compulsory levy imposed by a public authority on persons and organizations to meet public expenditures’

~ Thus, the above definition highlights the following points:

i) A tax is the compulsory payment made to the government. Refusal to pay the tax is a punishable offence.

ii) Every tax involves some sacrifice on part of the tax payer.

iii) A tax is not a fine or penalty.

~ The major share of revenue receipts of the Central Government comes from taxes.

~ Taxes can be broadly divided into: DIRECT TAXES, INDIRECT TAXES

*DIRECT TAXES:-

~ Direct taxes are imposed on the income and wealth of individuals or organizations.

~ They are personal income tax, wealth tax, corporate tax, gift tax, etc.

~ The impact and incidence of direct taxes are on the same person.

~ Direct taxes are progressive in nature and the rate of tax increases along with the tax base.

~ Progressive direct taxes are instrumental in reducing income inequalities especially in developing countries.

~ The following are the major direct taxes:

a)PERSONAL INCOME TAX:

~ Personal income tax is levied on the total income tax of the individual after some permissible deductions. At present, the personal income tax rates are as follows:

INCOME (IN RS)

RATE

0-1,60,000

0%

1,60,000 – 5,00,000

10%

5,00,000 – 8,00,000

20%

8,00,000 and above

30%

~ Senior citizens are exempted from tax on income up to Rs: 2,40,000.

~ Females are exempted from tax on income upto Rs: 1,90,000

~ In the year 2009-2010, Personal Income Tax contributed 17.6% of the Total Tax Revenue. (Rs:1,12,850 crores)

b) CORPORATE TAX:

~ Corporate tax is levied on the profits registered corporate firms.

~ Since a company is given a legal status, corporate tax is a direct tax.

~ At present (2010), the corporate tax rates are:

^ INDIAN FIRMS – 30% + 7.5% surcharge.

^ FOREIGN FIRMS – 40% + 2.5% surcharge.

~ In the year 2009-2010, Corporate Tax contributed to 40% of the Total Tax Revenue

(Rs: 256725 crores).

c) OTHER DIRECT TAXES:

~ The other direct taxes include expenditure tax, interest tax, wealth tax, gift tax, etc.

~ The share of these taxes is negligible.

*INDIRECT TAXES:

~ Indirect taxes are imposed on commodities.

~ They are sales tax, service tax, excise duty, customs duty, VAT, etc.

~ The impact and incidence of indirect taxes may be on different persons. The person on whom the tax is imposed bears the impact, while the person who ultimately pays it bears the incidence.

~ In direct taxes are regressive in nature because the burden of tax is ultimately shifted to the consumers who pay the same amount of tax irrespective of their income level.

~ Indirect taxes play an important role in developing countries due to low income levels.

~ The following are the major indirect taxes:

a) EXCISE DUTY:

~ It is levied on goods manufactured and consumed in India.

~ Excise duty is the single largest source of government revenue.

~ There has been a declining trend in the rates of excise duty.

~ In 2009-2010, excise duty contributed to 16.6% of the Total tax revenue                            (Rs: 1,06,477 crores)

b) CUSTOMS DUTY:

~ It is levied on imports and on selective exports.

~ From revenue point of view, customs duty has limited importance.

~ The peak rate of customs duty is 10%.

~ In 2009-2010, customs duty contributed to 15.3% of total Tax Revenue. (Rs:98,000 crores)

c) SERVICE TAX:

~ It is levied on services provided by certain categories of firms / persons / agencies.

~ Service tax collections have steadily increased.

~ In 2009-2010, it contributes to 10.1% of total tax revenue. (Rs:65,000 crores)

d) GOODS AND SERVICES TAX: (GST)

~ This includes a combination of all taxes like service tax, excise tax and VAT. (proposed to be incepted in 2011).

~ It will cover goods and services in almost all sectors and industries.

~ It will simplify the complexities of the system of levies on goods and services.

*NON-TAX REVENUE:

~ Non Tax Revenue includes all revenues other than taxes, accruing to the Government.

~ These are internally generated funds.

~ These sources of revenues are:

^ Administrative revenues.

^ Commercial revenues.

^ Grants and gifts.

~ The following are the main sources of non-tax revenue.

a)SPECIAL ASSESSMENT:

~ It is also known as betterment levy.

~ It is levied on certain members of the community who get the benefits of certain government activities or public projects like roads / railways projects, construction of park, etc.

~ Thus, due to public expenditure, the value of land / property appreciates and they experience ‘unearned increments’ in their asset holdings.

~ So, the government charges special assessment levy on such properties.

b) SURPLUSES OF PUBLIC ENTERPRISES:

~ The government has set up public sector enterprises that are involved in commercial activities.

~ The surpluses of these enterprises are an important source of non-tax revenue.

~ These revenues are in the form of profits and interests and are termed as commercial revenues.

~ The government also gets dividend from PSUs.

c) FEES:

~ Fees are an important source of administrative non-tax revenue charged by Government authorities for rendering services to the members of the public.

~ There is no compulsion involved in case of fees. All those who make use of these services pay the fees.

~ Fees are charged for obtaining licences, passports or registrations, filing of court cases, etc.

d) FINE AND PENALTIES:

~ These are an other sources of administrative non-tax revenues.

~ They are imposed on public as a form of punishment for not observing certain rules and regulations.

~ They are not expected to be a major source of revenue to the Government.

e) GRANTS AND GIFTS:

# Grants are financial aids.

~ They are given so that a public authority is able to perform certain activities for social development.

~ They are made by a higher public authority to a lower one.

~ For eg: World Bank gives grants to Central Government, Central Government gives grants to State Government, etc.

~ There is no repayment obligation in case of grants.

# Gifts and donations are voluntarily made by individuals, organizations or foreign governments to the Central Government.

~ Such gifts are made out of patriotic feelings or at the time of crisis or national calamities.

~ Gift cannot be considered as a regular source of revenue.

*CONCLUSION:

~ Thus, the tax system plays an important role in generating Public Revenue. Also, the non-tax income is important in raising revenue.

~ The Public Revenue so generated is used to meet Public Expenditure.

Q2: Discuss the changing trends in tax and non-tax revenue in India.

Ans: CHANGING TRENDS IN TAX AND NON-TAX REVENUE.

*INTRODUCTION:

~ The Government raises finance to meet its expenditures from tax and non-tax revenue sources.

~ In fact, Government expenditure exceeds government revenue, resulting in Government deficit.

*CHANGES:-

~ The important trends in tax and non-tax revenue are discussed below:-

A) TAX REVENUE:

~ The tax-structure in India is well developed and the power to levy taxes and duties is distributed as follows:

^ CENTRAL GOVERNMENT: It levies taxes on income (except agricultural income), customs duty, central excise duty and service tax.

^ STATE GOVERNMENT: It levies taxes on agricultural income, Value Added Tax (VAT), Stamp Duty, state excise duty, land revenue tax and professional tax.

^ LOCAL GOVERNMENT BODIES: They levy property tax, Octroi and tax for utilities like water supply, Sanitation etc.

~ Since liberalization Indian tax structure and system have undergone certain reforms.

~ These reforms included reduction in rates of all major taxes, broadening the base of all taxes, simplifying laws and procedures and modernization of administrative and enforcement machinery.

~ Some of the important trends in tax revenue are:

# TRENDS IN GROSS TAX-REVENUE AND TAX-GDP RATIO:

~ The collection of taxes has increased due to reduction of tax rates, simplification of procedures and a high growth rate of GDP.

~ The share of Gross tax revenue of the Central Government as a % of GDP has remained constant between 9% to 10%.

~ This is very low in comparison to the developed nation as well as many developing nations.

YEAR

TAX REVENUE

PERCENTAGE OF GDP

1990-1991

57,576

10%

2002-2003

216266

8.8%

2009-2010

641979

10.4%

# TRENDS IN DIRECT AND INDIRECT TAXES:

~ Before liberalization, the indirect taxes contributed more than 70% to the total tax revenue.

~ However, since 1990-91 (post-liberalization), this trend got reversed due to economic development.

~ The direct taxes contributed significantly due to increase in corporate tax and personal income tax.

YEAR

DIRECT TAXES (%)

INDIRECT TAXES (%)

1990-1991

19.1

80.9

2004-2005

43.3

56.1

2009-2010

57.7

42.0

# TRENDS IN DIRECT TAXES:

~ The share of direct taxes in the tax revenue of the Government has increased over the years.

~ The Direct Tax Code will replace the Income and Wealth Tax Laws and will be affective from April 1, 2011.

~ Major Direct taxes are:-

i)CORPORATE INCOME TAX:-

~ It is the most significant direct tax in terms of revenue collection and contribution to total tax revenue.

~ The contribution of corporate tax has increased greatly after liberalization:

YEAR

% OF TOTAL TAX REVENUE

Rs.CRORES

1990-1991

9.3

5335

2004-2005

27.1

82680

2009-2010

40.0

256725

ii)PERSONAL INCOME TAX:

~ The collection of personal income tax has also increased greatly since 1990-1991.

~ The contribution of personal income tax as a percentage of total tax revenue has also increased.

YEAR

% OF TOTAL TAX REVENUE

Rs.CRORES

1990-1991

9.3

5371

2004-2005

16.2

49268

2009-2010

17.6

112850

# TRENDS IN INDIRECT TAXES:

~ The share of indirect taxes in the tax revenue of the Central Government has gradually declined.

~ The trends in the share of three main indirect Taxes are stated as follows:-

# EXCISE DUTY:

YEAR

Rs CRORE

% OF TOTAL TAX REVENUE

1990-1991

24,514

42.6

2004-2005

99,125

32.5

2009-2010

1,06,477

16.6

Increased Significantly

Declined

#CUSTOMS DUTY:

YEAR

Rs CRORE

% OF TOTAL TAX REVENUE

1990-1991

20,644

35.9

2004-2005

57,611

18.9

2009-2010

98,000

15.3

Increased

Declined

# SERVICE TAX (INTRODUCED IN 1994-95)

YEAR

Rs CRORE

% OF TOTAL TAX REVENUE

1990-1991

862

0.8

2004-2005

14,200

4.7

2009-2010

65,000

10.1

~ INCREASED SIGNIFICANTLY due to rapidly growing service sector.

B) NON-TAX REVENUE:

~ Non-tax revenue includes internally generated funds.

~ Greater attention has to be paid to raise funds through non-tax revenues because of the limitations of raising revenue through taxes.

~ In 2002, the government set up the Non-Tax Revenue unit to advise the government to increase the collection of Non-Tax Revenue.

~ Since non-tax revenues broaden the sources of revenue, they are vital in meeting the growing fiscal deficit and funding infrastructure investments.

YEAR

NON-TAX REVENUE(Rs Crore)

% of GDP

1990-1991

11,976

2.1

2002-2003

72,290

3.0

2009-2010

1,40,279

2.3

INCREASED

~ SHARE OF TAX REVENUE AND NON-TAX REVENUE (%):

YEAR

TAX REVENUE

NON-TAX REVENUE(%)

1990-1991

78.2

21.8

2004-2005

73.5

26.5

2009-2010

77.2

22.8

* CONCLUSION:

~ Thus, there are various changes in the trends of tax and non-tax revenue.

~ These changes are brought about for meeting the ever-increasing public expenditure and public deficit.

 

 

 

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With real estate being touted as a wise investment in ones future, it is important that you know all of the positives and negatives that come along with being a property holder. Taxation is a familiar road that all of us travel, but it is important that you look beyond your tunnel vision and actually see what is happening to your dollar.

Recently the Wall Street Journal did opinion piece on the amount of times that a dollar really gets taxed. This information opened Pandora’s Box with regards to real estate investing, and the level of taxation that is placed upon a real estate investor’s dollar.

If you look at an individual dollar from the time that it is earned throughout an entire year, there are at least three distinct times that this dollar can get a bite taken out of it by local and federal gluttons.

The first bite comes as personal earnings are taxed by federal and state income taxes. The next bite comes in the form of the “Capital Gains Tax”. If you invest your once bitten dollar into a real estate deal, and you are fortunate enough to receive a profit back, your dollar gets munched on for the second time by the capital gains tax. The third and final bite is the federal death (estate) tax. The federal death tax is applied to those who have accumulated a personal wealth that exceeds the threshold of .5 million

The amount of taxation that is addressed above does not include additional nips like; property taxes, sales taxes, and excise taxes. The current system that is in place has been carefully structured to “take a little here and a little there”. When you look at eh whole picture you may just be amazed at how little you have left of your hard earned dollar.

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Interpretation of fiscal statutes in India: Central excise, customs, sales tax, and income tax

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With real estate being touted as a wise investment in ones future, it is important that you know all of the positives and negatives that come along with being a property holder. Taxation is a familiar road that all of us travel, but it is important that you look beyond your tunnel vision and actually see what is happening to your dollar.

Recently the Wall Street Journal did opinion piece on the amount of times that a dollar really gets taxed. This information opened Pandora’s Box with regards to real estate investing, and the level of taxation that is placed upon a real estate investor’s dollar.

If you look at an individual dollar from the time that it is earned throughout an entire year, there are at least three distinct times that this dollar can get a bite taken out of it by local and federal gluttons.

The first bite comes as personal earnings are taxed by federal and state income taxes. The next bite comes in the form of the “Capital Gains Tax”. If you invest your once bitten dollar into a real estate deal, and you are fortunate enough to receive a profit back, your dollar gets munched on for the second time by the capital gains tax. The third and final bite is the federal death (estate) tax. The federal death tax is applied to those who have accumulated a personal wealth that exceeds the threshold of .5 million

The amount of taxation that is addressed above does not include additional nips like; property taxes, sales taxes, and excise taxes. The current system that is in place has been carefully structured to “take a little here and a little there”. When you look at eh whole picture you may just be amazed at how little you have left of your hard earned dollar.