Tax Gram

Tax Gram I want to share my professioinal experience to others.

01/06/2017

Certain Important points to be noted in respect of GST:- Pls read carefully

1. GST will 100% be implemented on 1st july 2017
2.IGST - Integrated GST
3.CGST:- Central GST which with replacement CST
4.SGST :- State GST which will replace VAT
5.W.e.f 1st june 2016 ;- Migration btowards enrolment of GST will start till 15th Jun 2017
6.Registration certificate will be isuued online
20.All travel & tour expenses related to business have to be claimed under firm nameactory to C& F agents , go down to shop .,scrap material. For example If you buy a tv for 30k & return back your old tv for 4k , you have to pay tax on 34k
8. 5 Forms on different dates have to be submitted every month
R1 - by 10th
R2- BY 13TH
R3- BY 15TH
R4- ON 17TH
R5 or final returns on 20th
You can not file revised returns at all . once filed on 20th is final
9. Tax payment will be accepted only by E payments . Tax payments via debit or credit cards also added
10. in Present system you upload sales and purchase every month . In GST you have to upload every sales & purchase bill
11. Be careful , every thing in GST is system driven . Once uploaded by you can not be revised . No officer can help you in this .
12. Your firm rating will be done by the system. Based on the rating audit trials will be conducted
13.Prposed e Sugam for Rs 50,000 & above value only
14.You need to submit 17 documents for migration to GST
15.Most product MRP will come down
16.All these category which were not taxed will now be taxed , Replacement /return goods, barters, free samples, disposables,scrap material. For example If you buy a tv for 30k & return back ypour old tv for 4k , you have to pay tax on 34k
17.All movement of material will be taxable like HO To branch ( stock transfer ) , factory to C& F agents , godown to shop .
18.All books and records to be maintained on daily bases
19.You will need a full time accountant in your shop / office to maintain books under GST
20.All travel & tour expences related to business have to be claimed under firm name
21. If your vendor does not upload his bills within 180 day , you will not get tax credit
22.You can not claimed credit for material in stock beyond 1 year
23They have proposed that you have to dispose all your old stocks purchased under vat/cst within September 17
24Your vat credit will not be carry forward to GST.

24/05/2017

The deadline for filing income tax returns for FY2016-17 is July 31. It is the right time to chalk out the deductions that may be claimed in the tax return. Here are some insights on applicable deductions while computing the income from let out house property. Property taxes Actual property taxes as levied by any local authority paid during a FY can be claimed as a deduction. It is essential that the property tax has been paid before March 31 to claim a deduction. It is pertinent to note that the property tax paid for earlier years is eligible for a deduction in the year in which the payment is made.

For instance, if a taxpayer has paid the property taxes for two earlier years in March 2017, the deduction can be claimed in FY 2016-17. Standard deduction Flat 30% deduction is available on the annual value (rental income less any property taxes paid) of the house property. The deduction is available irrespective of the expenditure incurred towards repairs and maintenance of the house property. Accordingly, no documentation is required to claim the deduction.

Interest payable on the housing loan is available as a deduction from the rental income

Effective June 1, 2017, individuals who are paying a monthly rent of more than Rs 50,000 have to withhold tax at source at 5% of the rent payments. Taxpayers should ensure that their tenants are withholding the taxes during March or in the last month of tenancy, and are depositing the same using simplified 1 page challan cm return.

22/05/2017

Let's face it—taxes are among our biggest expenses over a lifetime. And this includes indirect taxes. We pay excise duty for manufacturing of goods, VAT on purchases, service tax on availing the taxable services, entertainment tax on movies, luxury tax, entry tax and the list goes on. Today, GST is labelled as the biggest indirect taxation revolution since Independence, and it is important to know how it will impact our bank balance. Will our wallets become lighter or heavier?
The seamless input tax credit across the value chain will eliminate a cascading effect. This is expected to result in a reduction of prices of products...

Let us discuss the other factors that will help you in saving the extra pennies under GST.
1. Elimination of double taxation
In the realm of indirect taxes, double taxation has long been a challenge in India. This is because a single transaction is considered as a sale as well as a provision of service. Consider an example of a restaurant with AC. The restaurant bill will have service tax and VAT. Wondering why VAT and service tax? The food and beverages are considered to be commodities and other additional services such as air conditioning and seating are considered as services. Hence, you pay VAT on 100% of the value of food and 40% of the value of the bill, and service tax may be levied at 15%. For example, a bill of ?1000 will attract service tax of ?60 and VAT@ 14.5% of ?154.

Under GST, supply being a single taxable event, which is either classified as supply of goods or services, the concept of double taxation will be eliminated. This will contribute to reduction in price.
2. The concept of "furtherance of business"
Today, a VAT dealer who pays excise duty and service tax on her purchases is not eligible to claim input tax as he is not registered. In GST, the concept of input tax credit is broadened to include any input or input services "used or intended to be used in the course of or for furtherance of businesses..
3. Reduction of tax rate
Today, excise duty is levied on manufacture and VAT on sale of goods. Let us consider a case of purchase where these taxes are levied. The standard rate of excise duty prevalent in most states is at 12.5% and VAT around 14.5%. On an average, you pay around 27-28% of value as taxes. The four-tier GST structure as finalized stands at 0%, 5%, 12%, 18% and 28%. Thus you can expect an overall reduction in rate of taxes

4. Anti-profiteering measure
In order to ensure that the benefit of input tax credit by businesses and subsequent reduction of tax rate is passed on to the final consumer, an anti-profiteering clause has been proposed.

19/05/2017

Tax Implication of Life Insurance Policies

Mostly life insurance polices are being purchased for Tax saving U/S 80c .Condition for eligibility under section 80C is that premium should not exceed 10% of the sum assured.

Taxability of Traditional / Ulip Plan
There would be three cases wherein taxation comes into consideration for these plans – Upon death of the insured, Surrendering the policy before maturity and Maturity proceeds of the policy.

Case -1 Upon death of the insured
Insurance policy proceeds received by the family members in the event of death of the policy holder is completely tax exempt under section 10 of income tax act

Case 2: Surrendering the policy before maturity
If you surrender the policy before maturity, the taxability would depend on whether you have paid 5 premiums on the policy or not. If you have paid so, taxability would be nil. Else, the surrender value will be added to your total income for the year and taxed accordingly

Case 3: Upon maturity

If you stay with the policy till maturity, the maturity proceeds are completely tax free.

18/05/2017

Voluntary retirement payments
Payment received on voluntary retirement, by employee of a public sector undertaking is exempt from income tax subject to a limit of Rs 5 lakh. Such an exemption is available only when such compensation is received in accordance with the scheme of voluntary retirement or in the case of a public sector company, under a scheme of voluntary separation.

15/05/2017

Salary earned from working abroad
Is salary earned from working abroad taxed in India? If so, how?
Compensation received outside India for work performed by an employee abroad, which is not in connection with the services being rendered in India, is not taxable in India, unless the same is received in India, where the employee qualifies as NR or NOR in India.
If the expatriate qualifies as a resident and ordinarily resident of India, the salary earned for working abroad may be taxable in India even if the same is received outside India and the subject to Treat benefits or benefits under the domestic tax laws of India.

11/05/2017

VAT in UAE

1) VAT in UAE is to be implemented from 1st January 2018

2) The following items are going to be exempted from the ambit of VAT
- Healthcare
- Education
- Local Transport
- Residential Real Estate, including long term leases on residential properties
- 100 other Essential items

3) Registration Criteria for VAT
- Taxable person having revenue of more than AED 375,000 in year shall be liable to register for VAT.
- If a taxable person having revenue or expenditure above AED 187,500 upto AED 375,000 shall have the voluntary option to register for VAT.
- VAT Registrations shall begin in Third Quarter of 2017
4) There shall be no Input Tax Credit available on the Custom Duty paid by taxable person, (i.e. VAT Shall be payable over and above the Custom Duty paid by the importer of goods).
Custom Duty shall form a part of the Cost of Goods on which the VAT shall be levied.
5) Taxable Person shall include persons located within UAE or outside UAE or GCC.
6) The rules of Place of Supply shall be applied for test of applicability of VAT
- For Goods
Location of the Goods where the supply takes place shall be considered for VAT. (i.e. if the goods are being exported outside UAE or GCC then VAT shall not be levied on such goods.)
- For Services
Location of Service Provider shall be considered for applicability of VAT.
7) Import of Goods shall be charged VAT upon the purchase by the importer under reverse charge mechanism and can claim input tax credit if the goods are re-exported. (i.e. if the Goods are imported, the importer will have to pay the VAT on behalf of the supplier to the VAT authorities.)
8) Conditions for availing the input tax credit
- Recipient of Supply must be a taxable person (i.e. end consumer cannot claim VAT refund or credit)
- Tax should be charged correctly.
- The recipient of the supply must supply the documentary evidence (i.e. Purchase Invoice) of the VAT paid.
- The goods and services received are for making further taxable supplies (i.e. only business which make further sale shall be entitled to reclaim credit on VAT Paid)
- VAT input tax credit can be claimed only on the amount paid or intended to be paid in 6 months by the recipient.
9) It is unlikely that a VAT refund shall be made to Tourists purchasing goods in UAE.
10) Gold, Silver. Platinum etc (of 99% purity) as well as investments shall be subject to 0% VAT.
(However Gold, SIlver or Platinum or Diamond in Jewellery form shall be subject to 5% VAT)
11) VAT applicability on freezones shall be clarified at a later date.
12) VAT on financial services and services provided by Banks shall be clarified at a later date.
13) VAT Returns shall be filed on a quarterly basis in UAE.
14) VAT returns shall be filed online and shall be filed in Arabic.
15) Record of VAT invoices shall be maintained for a period of 5 years.

11/05/2017

The GST will subsume almost all state and central level indirect taxes and levies in India. The Goods and Service Tax (GST) that is slated to come into force from July 1 will subsume all these taxes into one. Taxes that will collapse under GST are as under
-Central Excise Duty
-Service Tax
- Countervailing Duty
- Special Countervailing Duty
-Value Added Tax (VAT)
-Central Sales Tax (CST)
-Octroi
-Entertainment Tax
-Entry Tax
-Purchase Tax
-Luxury Tax
-Advertisement taxes
-Taxes applicable on lotteries

All transactions such as sale, transfer, barter, lease, or importation of goods and/or services made for consideration will attract GST

10/05/2017

GST Schedule for 1st July rollout

09/05/2017

Deduction for tution fees of 2 childern is allowed as deduction to parent who is paying it u/s 80C.

05/05/2017

Deadline for bank saving account holders to give PAN extended to June 30, 2017

03/05/2017

Tax News

Govt of India declare 8.65% interest rates on Employee Provident Scheme

04/24/2017 - No income tax on salary recovered for not serving notice period - Nandinho Rebello v. DCIT (ITA No. 2378/Ahd/2013)

04/05/2017 - Claim for exemption in respect of House Rent Allowance rejected where rent paid by married daughter to her mother

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