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TAX
DIRECT TAX
INDIRECT TAX
INCOME TAX
WEALTH TAX
CUSTOMS DUTY
PURCHASE TAX
VAT
SERVICE TAX
0-180,000
180,001-500,000 500,001-800,000 800,001-ABOVE
NIL
10 20 30
Note : No surcharge is payable by the above assessees. Education Cess @ 2%, and Secondary and Higher Education Cess (SHEC) @ 1% on income tax shall be chargeable.
II. In the case of every individual, being a woman resident in India, and below the age of sixty years at any time during the previous year. INCOME 0-190,000 190,001-500,000 500,001-800,000 800,001-ABOVE % NIL 10 20 30
Note : No surcharge is payable by the above assessees. Education Cess @ 2%, and Secondary and Higher Education Cess (SHEC) @ 1% on income tax shall be chargeable.
III. In the case of every individual, being a resident in India, who is of the age of 60 years or more at any time during the previous year. [Senior citizen] INCOME 0-250,000 250,001-500,000 500,001-800,000 % NIL 10 20
800,001-ABOVE
30
Note : No surcharge is payable by the above assessees. Education Cess @ 2%, and Secondary and Higher Education Cess (SHEC) @ 1% on income tax shall be chargeable.
IV. In the case of every individual, being a resident in India, who is of the age of 80 years or more at any time during the previous year. [Very senior citizen] INCOME 0-500,000 500,001-800,000 % NIL 20
800,001-ABOVE
30
Note : No surcharge is payable by the above assessees. Education Cess @ 2%, and Secondary and Higher Education Cess (SHEC) @ 1% on income tax shall be chargeable.
WHO IS AN ASSESSEE ?: [Section 2(7)] -Any person who is liable to pay any tax or any other sum under the Income Tax Act, 1961 -Assessee includes (a) Every person in respect of whom any proceedings has been taken for the assessment. (b) Every person who is deemed to be an assessee under the Act. (c) Every person who is deemed to be an assessee in default under the Act.
WHAT IS ASSESSMENT YEAR? [Section 2 (9)] 1. Assessment Year means the period of twelve months commencing on the 1st day of April every year. 2. The year for which tax is paid is called Assessment Year. The present Assessment Year is 2012-13 relating to previous year 2011-12.
Example : X Ltd. Started business on 1.11.11. So for X Ltd. Previous year will be considered as 1.11.11 to 31.3.12.
INCOME TAX INCOME FROM SALARIES INCOME FROM HOUSE PROPERTY PROFITS AND GAINS OF BUSINESS OR PROFESSION CAPITAL GAINS INCOME FROM OTHER SOURCES
CAPITAL GAINS
1. Capital Asset: [Section 2(14)] Includes : Property of any kind, whether or not connected with business or profession Excludes : (a) Stock in trade (b) Personal Effects (c) Rural Agricultural Lands in India (d) 6 % Gold Bonds 1977; 7% Gold Bonds 1980 & National Defence Gold Bonds, 1980. (e) Special Bearer Bonds, 1991 (f) Gold Deposit Bonds issued under Gold Deposlt Scheme 1999
QUIZ
IS THESE ITEMS TAXABLE? GIFT FROM FRIEND 8000 IN THE YEAR 2007 GIFT FROM CLIENT1 15000 IN THE YEAR 2007 GIFT FROM CLIENT1 27000 IN THE YEAR 2007
ANS: IT IS NOT TAXABLE BECAUSE GIFTS DON`T AGGREGATE MORE THAN ` 50,000 IN A YEAR
Wealth Tax
Wealth tax is chargeable only on the following assets: Wealth tax is not levied on productive assets, hence investments in shares, debentures, UTI, mutual funds, etc are exempt from it. Any guest house, residential house, commercial property, urban farm house. Motor car for personal use. Jewellery, bullion, furniture, utensils or any other article made wholly or partly of gold, silver, platinum or any other precious metal or any alloy containing one or more of such precious metals. Yachts, boats, and air-crafts used for non-business purposes. Urban land, subject within the jurisdiction of municipality or cantonment board with a population of no less than 10,000 according to the preceding census or within 8 kilometers or such local limits. Cash in hand exceeding Rs. 50000 of individuals and HUFs and in other cases, amount not recorded in he book of accounts. The value of all the taxable assets on the valuation date is clubbed together and is reduced by the amount of debt owed by the assessee. The net wealth so arrived at is charged to tax at the rates specified. The present rate of tax is 1% of the amount by which the net wealth exceeds Rs. 1500000. The rate is same for individuals, HUF's and companies. Special rules have been laid down in the Act regarding valuation of various assets like immovable properties, shares, jewellery etc.
CORPORATE TAX
ACCORDING TO COMPANIES ACT 1956 DOMESTIC COMPANIES:
Domestic Corporations / Private Limited Companies 33.99% Domestic Corporations / Public Limited Companies 33.99% Limited Liability Partnership (LLP's) 30.9% NOTE: THE ABOVE TAX RATES INCLUDES SURCHARGE
FOREIGN COMPANIES
Dividends20% Interest Income 20% Royalties 30% Technical Services30% Other income 55% NOTE: THE ABOVE TAX RATES INCLUDES SURCHARGE
DEDUCTION U/S 80
Any assessee can have a deductions of MAXIMUM 100,000
RETURN OF INCOME
COMPULSORY FILING OF RETURN OF INCOME [SECTION 139(1)] When is the Due date to file returns (a) 30th September of the assessment year, where the assessee is (i) a company; or (ii) a person (other than a company) whose accounts are required to be audited under the Income-tax Act, 1961 or any other law in force; or (iii) a working partner of a firm whose accounts are required to be audited under the Income-tax Act, 1961 or any other law for the time being in force. (b) 31st July of the assessment year, in the case of any assessee other than those covered in (a) above.
TYPES OF RETURN
BELATED RETURN [SECTION 139(4)] REVISED RETURN [SECTION 139(5)] DEFECTIVE RETURN [SECTION 139(9)]
Every assesse should have PERMANENT ACCOUNT NUMBER (PAN) to file the return It is 10 alphanumeric digits
QUESTIONS & ANSWERS ON RETURN OF INCOME Question 1. What is the due date of filling of return of income in case of a non-working partner of a firm whose accounts are not liable to be audited? Answer : Due date of furnishing return of income in case of non-working partner shall be 31st July of the assessment year whether the accounts of the firm are required to be audited or not.
Q&A
Can a revised return be further revised? Answer : If the assessee discovers any omission or any wrong statement in a revised return, it is possible to revise such a revised return provided it is revised within the same prescribed time
CASE: Joseph engaged in profession filed his return of income for assessment year 2011-12 on 15th November, 2011. He disclosed an income of `4,00,000 in the return. In February, 2012 he discovered that he did not claim certain expenses and filed a revised return on 3rd February, 2012 showing an income of `1,80,000 and claiming those expenses. Is the revised return filed by Joseph acceptable? Answer: Joseph is engaged in profession. The due date for filing income tax return for assessment year 2011-12 as per section 139(1) of the Income-tax Act is 30th September, 2011 if his accounts are required to be audited under any law. The due date is 31st July, 2011 if the accounts are not required to be audited under any law. CASE: Chandra Sinha v. CIT
EXCISE DUTY
Excise duty levied on manufacture Packing/re-packing, labeling / re- labeling of certain products amount to manufacture Excise duty is payable on transaction value i.e. usually sale price.
Indirect taxes
SERVICE TAX
Who is liable to pay duty? Rule 4(1) of the Central Excise Rules, 2002 provides that every
person who produces or manufactures any excisable goods, or who stores such goods in a warehouse, shall pay the duty leviable on such goods in the manner provided in Rule 8 or under any other law, and no excisable goods, on which any duty is payable, shall be removed without payment of duty from any place, where they are produced or manufactured or from a warehouse, unless otherwise provided.
CASE: Hindustan General Industries v. CCE 2003Ownership of raw material is not relevant for duty liability
Specific
CUSTOMS DUTY:
Customs duty on imports and exports Customs duty is on imports into India and export out of India. Section 12 of Customs Act, often called charging section, provides that duties of customs shall be levied at such rates as may be specified under The Customs Tariff Act, 1975', or any other law for the time being in force, on goods imported into, or exported from, India.
CUSTOMS DUTY:
Similarity between excise and customs There are many common provisions and/or similarities in provisions Central Excise and customs Law. Administration, Settlement Commission and Tribunal are common. Provisions of Tariff, principles of valuation, refund, demands, exemptions, appeals, search, confiscation and appeals are similar.
Territorial waters and exclusive economic zone Territorial waters of India extend upto 12 nautical miles inside sea from baseline on coast of India and include any bay, gulf, harbour, creek or tidal river. (1 nautical mile = 1.1515 miles = 1.853 Kms). Sovereignty of India extends to the territorial waters and to the seabed and subsoil underlying and the air space over the waters. Exclusive economic zone' extends to 200 nautical miles from the base -line. Area beyond that is high seas. Indian Customs Waters ,Indian Customs waters extend upto 12 nautical miles beyond territorial waters. Powers of customs officers extend upto 12 nautical miles beyond territorial waters.
SERVICE TAX
Service tax is imposed under Finance Act, 1994 as amended from time to time. There is no Service Tax Act. Service Tax @ 5% was introduced from 1-7-1994. Service tax rate has been reduced to 10.30% w.e.f. 24-2-2009. Service tax is payable on taxable services as defined in various clauses of section 65(105) of Finance Act, 1994. Presently, about 117 services are taxable. Service tax is payable on gross amount charged for taxable service provided or to be provided [Section 67]. If consideration is partly not in money, valuation is required to be done as per Valuation Rules. Tax is payable when advance is received. Small service providers upto ten lakhs are exempt. Export of service is exempt from service tax under Notification No. 6/2005-ST dated 1-3-2005. Services provided in J&K are not taxable [section 64(1)] Cenvat credit is available of inputs, input services and capital goods used for providing taxable output Services.
OCTROI
The state government levies the octroi charges when the product enters the state. This charge is applicable to certain states and fluctuates as per the Government regulations and we are unable to confirm the amount. The octroi charge is payable by the recipient at the time of delivery. Octroi/entry tax amount paid by Clearing & Forwarding Agent, CHA or Transporter on behalf of owner of goods/Principal. Customs duty, dock dues, transport charges etc. paid by Customs House Agent on behalf of client. Advertisement charges paid by Advertising Agency to newspaper on behalf of clients. Ticket charges paid by Travel Agent and recovered from his customer. Reimbursement of goodown, salary and loading/unloading expenses by Principal to C & F Agent.
OCTROI
CASE :In Bhatat Sanchar Nigam Ltd. v. UOI (2006) It has been clearly held that price of goods cannot be included in value of services. As an obvious corollary, service tax cannot be imposed on value of material.
VAT
VAT- Value Added Tax VAT is a sales tax collected by the government (of the state in which the final consumer is located) which is the government of destination state on consumer expenditure. The mechanism of VAT is such that, for goods that are imported and consumed in a particular state, the first seller pays the first point tax, and the next seller pays tax only on the value-addition done leading to a total tax burden exactly equal to the last point tax. CENVAT - Central Value Added Tax CENVAT is related to central excise. CENVAT means, Tax on Value Addition on the goods manufactured according to Central Excise & Customs Act
Definition. Here the value addition means the Additional Services/Activities etc. which converts
the Input in to Output, and the output is newly recognised as per the this act as Exciseble goods..