MINIMUM ALTERNATIVE TAX (MAT) MAT is minimum alternative tax section 115JA was replaced by section 115JB for

assessment years 2001-02 onwards. As per this section, your normal tax payable is to be compared with 7.5% of your book profits and you are required to pay the higher of the two. From assessment year 2007-2008 onwards your normal tax payable will be compared with 10% of book profits are youre required to pay the higher of the two. Credit for MAT paid can be carried forward under section 115JAA for 5 years.

SERVICE TAX Service tax is a part of Central Excise in India. It is a tax levied on services provided in India, except the State of Jammu and Kashmir. The responsibility of collecting the tax lies with the Central Board of Excise and Customs(CBEC). The Finance Minister of India, Pranab Mukherjee in his Budget speech has indicated the government's intent of merging all taxes like Service Tax, Excise and VAT into a common Goods and Service Tax by the year 2011. To achieve this objective, the rate of Central Excise and Service Tax will be progressively altered and brought to a common rate.[citation needed ] In budget presented for 2008-2009 It was announced that all Small service providers whose turnover does not exceed Rs10 lakhs need not pay service tax. Circular No. 127/9/2010-ST, dated 16-8-2010 regarding Service tax on commercial training and coaching - Whether donation' is consideration'. A representation has been received seeking clarification whether donations and grants-in-aid received from different sources by a charitable Foundation imparting free livelihood training to the poor and marginalized youth, will be treated as consideration' received for such training and subjected to service tax under commercial training or coaching service'. 2. The matter has been examined. The important point here is regarding the presence or absence of a link between consideration' and taxable service. It is a settled legal position that unless the link or nexus between the amount and the taxable activity can be established, the amount cannot be subjected to service tax. Donation or grant-in-aid is not specifically meant for a person receiving such training or to the specific activity, but is in general meant for the charitable cause championed by the registered Foundation. Between the provider of donation/grant and the trainee there is no relationship other than universal humanitarian interest. In such a situation, service tax is not leviable, since the donation or grant-in-aid is not linked to specific trainee or training.

GOODS AND SERVICES TAX/HARMONIZED SALES TAX (GST/HST) All GST/HST registrants are eligible to file their returns electronically by internet or telephone. If you have not received your access code through the mail, you can get a new code by using our GST/HST Access Code Online service. A printable version of Form GST62, Goods and Services Tax/Harmonized Sales Tax (GST/HST) Return for Registrants (Non-personalized), is temporarily available. You will not be able to file your return or make a payment at your financial institution. Since this form is not personalized, do not forget to enter your personal information, including your Business Number, name, and reporting period, on the front and the back of the form. You can drop your return off at your tax centre or tax services office, or fax your return to your tax centre.

VALUE ADDED TAX A value added tax (VAT) is a form of consumption tax. From the perspective of the buyer, it is a tax on the purchase price. From that of the seller, it is a tax only on the "value added" to a product, material or service, from an accounting point of view, by this stage of its manufacture or distribution. The manufacturer remits to the government the difference between these two amounts, and retains the rest for themselves to offset the taxes they had previously paid on the inputs. The "value added" to a product by a business is the sale price charged to its customer, minus the cost of materials and other taxable inputs. A VAT is like a sales tax in that ultimately only the end consumer is taxed.[citation needed ] It differs from the sales tax in that, with the latter, the tax is collected and remitted to the government only once, at the point of purchase by the end consumer. With the VAT, collections, remittances to the government, and credits for taxes already paid occur each time a business in the supply chain purchases products. DIRECT TAX CODE The New Direct Tax Code (DTC) is said to replace the existing Income Tax Act of 1961 in India. It is expected to be passed in the monsoon session of 2010 and is expected to be enforced from 2012. During the budget 2010 presentation, the finance minister Mr. Pranab Mukherjee reiterated his commitment to bringing into fore the new direct tax code (DTC) into force from 1st of April, 2011, but same could not be fulfilled and now it will be applicable from 1st April, 2012. DTC bill was tabled in parliament on 3oth August, 2010. There are big changes now in monsoon session and there is now much less benefits as compared to what were in the original proposal. You can download the bill tabled in parliament from below link: Here are some of the salient features and highlights of the DTC: 1) DTC removes most of the categories of exempted income. Unit Linked Insurance Plans (ULIPs), Equity Mutual Funds (ELSS), Term deposits, NSC (National Savings certificates), Long term infrastructures bonds, house loan principal repayment, stamp duty and registration fees on purchase of house propertywill loose tax benefits. 2) Tax saving based investment limit remains 100,000 but another 50,000 has been added just for pure life insurance (Sum insured is atleast 20 times the premium paid), health insurance, mediclaims policies and tuition fees of children. But the one lakh investment can now only be done in provident fund, superannuation fund, gratuity fund and new pension fund. 3)The tax rates and slabs have been modified. The proposed rates and slabs are as follows: Annual Income Tax Slab Up-to INR 200,000 (for senior citizens Nil 250,000) Between INR 200,000 to 500,000 10% Between INR 500,000 to 1,000,000 20% Above INR 1,000,000 30% Men and women are treated same now 4) Exemption will remain same as 1.5 lakhs per year for interest on housing loan for self-occupied property.

5) Only half of Short-term capital gains will be taxed. e.g. if you gains 50,000, add 25,000 to your taxable income. Long term capital gains (From equities and equity mutual funds, on which STT has been paid) are still exempted from income tax. 6) As per changes on 15th June, 2010, Tax exemption at all three stages (EEE) savings, accretions and withdrawalsto be allowed for provident funds (GPF, EPF and PPF), NPS (new pension scheme administered by PFRDA), Retirement benefits (gratuity, leave encashment, etc), pure life insurance products & annuity schemes. Earlier DTC wanted to tax withdrawals. 7) Surcharge and education cess are abolished.

8) For incomes arising of House Property: Deductions for Rent and Maintenance would be reduced from 30% to 20% of the Gross Rent. Also all interest paid on house loan for a rented house is deductible from rent. Before DTC, if you own more than one property, there was provision for taxing notional rent even if the second house was not put to rent. But, under the Direct Tax Code 2010 , such a concept has been abolished. 9) Tax exemption on LTA (leave travel allowance) is abolished. 10) Tax exemption on Education loan to continue. 11) Corporate tax reduced from 34% to 30% including education cess and surcharge. 12) Taxation of Capital gains from property sale : For sale within one year, gain is to be added to taxable salary. For long term gain (after one year of purchase), instead of flat rate of 20% of gain after indexation benefit, new concept has been introduced. Now gain after indexation will be added to taxable income and taxed at per the tax slab. Base date for cost of acquisition has been changed to 1st April, 2000 instead of earlier 1st April, 1981. 13) Medical reimbursement : Max limit for medical reimbursements has been increased to 50,000 per year from current 15,000 limit. 14) Tax on dividends: Equity mutual fund will attract 5% dividend distribution tax (DDT). DDT has been removed from debt and non-equity based mutual funds but now dividends on non-equity funds will be taxable in investors hand as per his slab rates. There will also be a TDS 0f 10% (20% in case of NRI and companies) if dividend is more than 10,000 Rs for non-equity funds. 15) Bad news for NRIs : As per the current laws, a NRI is liable to pay tax on global income if he is in India for a period more than 182 days in a financial year. But in new bill, this duration has been changed to just 60 days. An NRI will be deemed as resident only if he has also resided in India for 365 days or more in the preceding four financial years, together with 60 days in any of these fiscal years. Even if an NRI becomes a resident in any financial year, his global income does not immediately become liable to tax in India. Global income would become taxable only if the person also stayed in India for nine out of 10 precedent years, or 730 days in the preceding seven years. This is very unfair to Seafarers. To avoid any income tax, an Indian sailor employed with a foreign ship will have to stay maximum for 60 days in India.

Difference between VAT & Sales Tax Value Added Tax or VAT as it is commonly known is an indirect tax imposed on goods or services at various stages of its production. It is imposed on domestic as well as foreign goods and is one of the main income structures of the country. Sales Tax, on the other hand is levied on completed products and the consumer is aware of exactly how much of it he is paying. The burden of the VAT is, however, not felt by the consumer as much as the Sales Tax is. Since it is imposed during production itself it does not affect the buyer unlike the sales tax which increases the price of a commodity. The effect of the VAT is felt equally by the consumers as well as the producers because the same amount of VAT levied on the product is also charged from the producers, despite their position or social standing. However, Sales Tax is borne solely by the consumers. Another important point is that VAT cannot be evaded like Sales Tax can. Sales Tax is evaded by buying goods off the internet or from wholesale markets. VAT too, today is subject to evasions like Carousel Fraud where taxes are imposed on goods exempt from them in order to avoid payment to the Government. The imposition of taxes like VAT is difficult in developing countries like India due to a low rate of per capita income and so Sales Tax is a more popular means of income for the country.