Tax Implications

Income Tax Deductions

Deductions to be made in computing total income U/S 80C
Tuition Fee Interest Contribution towards Insurance Premium NSC and other specified Instruments

Income Tax Schedule

1. GROSS SALARY BASIC SALARY DEARNESS ALLOWANCE HOUSE RENT ALLOWANCE 2. Less: Allowance to the extent exempt u/s 10 HOUSE RENT ALLOWANCE (Least of the three) 1) Actual HRA Received

2) 40% of Salary (50% of salary in case of Metro Cities) 3) Excess of rent paid over 10% of Salary Salary for the purpose of HRA (Basic + DA) 3. Balance (1-2)

Income Tax Schedule

4. Any other income reported by the Employee
5. Total Income (3+4) 6. Interest on Housing Loan (u/s24) 7. Gross Total Income(5-6) 8. DEDUCTION UNDER CHAPTER VI-A Mediclaim Insurance Premium (sec 80D)

Medical for handicapped dependents (sec 80DD)

Medical for specified diseases (Sec 80DDB) Higher Education Loan Interest Repayment (Sec 80E) Donation to approved fund and charities (sec 80G)(Eligible Amount, 100% for 1200 50% for the remaining amount) 9. TAXABLE INCOME (7-8)

Income Tax Schedule

10. Deduction U/S 80C: Investment in Pension Fund (Sec 80CCC) NSC Public Provident Fund Employees Provident Fund & Voluntary PF Children's Tuition Fees (Regular) Housing loan principal repayment Insurance Premium Infrastructure Bonds & others (MF, ULIP ,etc.)

Total (Maximum limit Restricted to Rs.1,00,000)

11. NET TAXABLE INCOME (9-10)

Income Tax Schedule

PERSONAL TAX RATES For individuals, HUF, Association of Persons (AOP) and Body of individuals (BOI): For the Assessment Year 2008-09 Taxable income slab (Rs.) Rate (%) Up to 1,50,000 Up to 1,80,000 (for women) Up to 2,25,000 (for resident individual of 65 years or above) NIL 1,50,000 3,00,000 10 3,00,001 5,00,000 20 5,000,001 upwards 30* *A surcharge of 10 per cent of the total tax liability is applicable where the total income exceeds Rs 1,000,000. Note : Education cess is applicable @ 3 per cent on income tax, inclusive of surcharge if there is any.

Wealth Tax In India

This Act may be called the Wealth-tax Act, 1957. It extends to the whole of India. It shall be deemed to have come into force on the 1st day of April, 1957. The Wealth Tax Act is an important direct tax legislation. Wealth tax is tax on the benefits derived from property ownership. The tax is to be paid year after year on the same property on its market value, whether or not such property yield any income.

Wealth Tax Chargeable Assets In India

Any guest house, residential house, commercial property, urban farm house. However an exception is provided in this clause regarding the following: A residential house allotted by a company to an employee, officer or director, drawing annual salary of less than Rs. 200000. A residential or a commercial house forming part of stock in trade. Residential property let out for minimum of 300 days in a year. Commercial house used in own business of the assessee. The implication of this clause is that while wealth tax is chargeable on house properties , it is exempt in respect of the exceptions provided.

Wealth Tax Chargeable Assets In India

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. Provided that where any of the said assets is used by the assessee as stock-in-trade, such asset shall be deemed as excluded from the assets specified in this sub-clause. Yachts, boats, and air-crafts used for non-business purposes.

Wealth Tax Chargeable Assets In India

Urban land, subject within the juridiction of municipality or cantonment board with a population of no less than 10,000 according to the preceding census or within 8 kilomerers or such local limits. However, the following types of land are exempt: On which constructon is not permissible under any law. Unused land for industrial purposes held for less than 2 years. Held a stock-in-trade for 10 years. Occupied by a building constructed with the approvel of an appropriate authority.

Wealth Tax Chargeable Assets In India

Cash in hand exceeding Rs. 50000 of individuals and HUFs and in other cases, amount not recorded in the 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.

Gift tax in India

Gift tax in India was regulated by the Gift-tax Act which came into effect on 1st April, 1958 and is applicable in the entire country except in Jammu and Kashmir. As per the Gift-tax Act of 1958, a gift in excess of Rs. 25,000 (cash, demand draft, check, online money transfer) received from anyone who is not your blood relative, is taxable. Even if your best friend has just won a huge lottery and gifts you Rs. 30,000 in cash/draft/check, you'll have to declare pay a Gift-tax on it.

Gift tax in India

Exemptions ,Gift-tax need not be paid if: The gift was given by a blood relative, irrespective of the gift value. The value of the gift is less than Rs. 25,000. The gift money was in return of something. So if you receive Rs. 100,000 from someone and in turn you give her a designer dress, you need not pay Gift-tax on the money received. This transaction will be considered a purchase and is therefor exempt from Gift-tax. The gift was received on your wedding, irrespective of the gift value. But a gifts in excess of Rs. 25,000, received for any other occasion (birthday, anniversary, etc.) is taxable.

Gift tax in India

Procedures There is no standard procedure to be followed for receiving a taxable gift. When you file your returns, you should add the gift amount to your annual income under 'Income from other sources'. You'll then be taxed depending on your total taxable income. However, make sure that you: Accept the gift in writing via a gift deed. The deed will mention the value of the gift and the names of the persons giving and receiving the gifts. Sign the gift deed and get it signed by the person giving you the gift. Register the gift deed by paying the requisite stamp duty.

Capital Gain tax in India

Capital Gain can be defined as an any income generated by selling a capital investment. A capital investment can be anything from business stocks, paintings, and houses to family businesses and farmhouses. The 'gain' here, refers essentially to the difference between the price originally paid for the investment and money received upon selling it. A capital gain can be categorized under the following heads, depending on how long the investment has been under your possession: Short-term: If you sell an investment within three years from the date of its purchase, it will be defined as a short-term capital gain. But if the investment is in the form of mutual funds/company shares, the allowed time duration is one year. Long-term: If you sell an investment after three years from the date of its purchase, it will be defined as a long-term capital gain. However, selling mutual funds and company shares after one year will also constitute a long-term capital gain.

Capital Gain tax in India

Capital gain tax rates For short-term capital gains, you will be taxed depending on the tax slab relevant to you after you have added the capital gain to your annual income. Short-term capital gains are taxed at the normal corporate income tax rates. For stocks, Tax rate of 10% if STT is charged. For long term capital gains, you will be taxed 20%. For stocks, if the transaction was levied with STT, you need not pay any tax on your gain. In case of long term capital gains, you can either calculate your capital gain using an indexed acquisition cost, or you can choose not to opt for indexing.

Capital Gain tax in India

if one wants to avoid taxes on the sale of a immovable property, the proceeds can be invested in capital gains bond within 6 months after sales of property for three years before repatriating the money. The limit is Rs 50 lakh.

Securities transaction tax (STT) Rates In the case of the capital market segment, the tax is 0.1 per cent.

Excel File

Sales tax
In pursuance to agreement reached between Central Government and Empowered Committee of States for implementation of Vat, it has been agreed to phase out Central Sales Tax in stages. CST has been reduced from 4% to 2% w.e.f. 1-6-2008. It is proposed reduce CST by 1% every year and to make it Nil by 1-4-2010.

Sales tax
So far, sale to Government was treated at par with sale to registered dealers. CST rate applicable for sale to Government was 4% if Government issued D form.
Sales to Registered dealer Sales to Unregistered dealer

Declared Goods

4%

Twice the state rate

Undeclared Goods

10%

10% or state rate which ever is higher

Now, Distinction between declared goods and goods other than declared goods has been abolished .

Rate of Central Sales Tax , w.e.f. 16-2008

Sales tax rate for CST rate in case of sale to sale within the registered dealers State (applicable to declared goods as well as other goods) Nil Nil 1% 1% 2% 2% 3% 2% 4% 2% 8% 2% 10% 2% 12.5% 2% 20% 2% CST rate in case of sale to unregistered dealers (applicable to declared goods as well as other goods) Nil 1% 2% 3% 4% 8% 10% 12.5% 20%

Excise tax
Excise is a tax levied on goods manufactured or produced in India. Central Excise duties are the single largest source of Revenue for the Central Government of India. EXCISABLE GOODS
The goods should be MOVABLE. (no duty on immovable goods). The goods should be MARKETABLE (capable of being bought and sold). The goods should arise out of MANUFACTURING process. The goods should be MENTIONED in the Central Excise Tariff Act. (if one of the criteria mentioned above is absent, the item cannot be described as goods to attract Excise levy, even if there is entry in the tariff).

Excise tax
Excisable Goods are of two kinds:
Unmanufactured Goods (Coffee, Tobacco). Manufactured Goods. Rates of duty are of three kinds:

The rates of duty are of three kinds

Specific; i.e., per kg. Ad valorem; i.e., on the value of goods expressed in terms of % of the value. Duty on production capacity : On certain Notified Goods under section 3A.

Excise tax
Most of the products attract excise duties at the rate of 16%. Some products also attract special excise duty/and an additional duty of excise at the rate of 8% above the 16% excise duty. 2% education cess is also applicable on the aggregate of the duties of excise. Excise duty is levied on ad valorem basis or based on the maximum retail price in some cases.