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BUDGET 2018, Business, Income Tax, LONG TERM CAPITAL GAIN, LTCG, Uncategorized

ALL ABOUT LONG TERM CAPITAL GAIN TAX OF 10% UNDER FINANCE BUDGET 2018 ON GAIN OVER RS. 1 LAKH

Finance Minister Arun Jaitley introduced in Finance Budget 2018 Long Term Capital Gains tax (LTCG) on sale of listed securities on gains of over Rs1 lakh.

Earlier, if you sold the listed shares or equity oriented mutual funds after 1 year, the resulting capital gains were exempt from income tax.

Finance Minister introduced a long-term capital gains tax of 10 percent if the gains exceed Rs 100,000 without allowing the benefit of indexation.

However, all gains till 31st January 2018 will be grandfathered and short term capital gains remains unchanged at 15 percent.

For Example if you have purchased the stock on May 08, 2017 at Rs 100 and the highest stock price on January 31, 2018 (or the ending NAV on January 31, 2018) is Rs 130.

Now, suppose you sell the stock/equity mutual fund on June 01, 2018 at Rs 180. Since the holding period is greater than 1 year, the resulting gains will qualify as long-term capital gain.

You will have to pay tax on Rs 50 (Rs 180-Rs 130).

Your purchase price was Rs 100 and Rs 130 was the highest price on January 31, 2018.

Even though your LTCG is Rs 80, you have to pay tax at 10% only on the Rs 50.

Do note the tax is applicable if such LTCG exceeds Rs 1 lac in the financial year.

 Under the older regime, you wouldn’t have to pay any tax on the gains since LTCG on the sale of listed shares and equity MF units was exempt from tax.

Dividends from Equity funds to be taxed at 10%.

This is in line with the introduction of Long-term capital gains tax on the sale of listed shares and equity fund units.

Since LTCG is now 10%, the dividend income from such equity funds will also be taxed at 10%. The AMC will deduct the tax in form of dividend distribution tax (DDT) of 10%. So you will not have to pay any tax. Earlier, there was no DDT for equity-oriented funds.

However, if you see, your effective tax hit will be higher than 10% due to surcharge (12%) and cess (now 4%). Your tax liability will be 11.65%.

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HELPDESK, Income Tax, Penalty, QUERY, RECTIFICATION, REFUND, Uncategorized

INCOME TAX DEPARTMENT HELP DESK CONTACT DETAILS

INCOME TAX DEPARTMENT HELP DESK CONTACT DETAILS
CONTACT NO. OF INCOME TAX DEPARTMENT, PHONE NO.
S. NO. PURPOSE HELPDESK HELPDESK NUMBER WORKING HOURS
1 General Queries related to Income Tax Aaykar Sampark Kendra (ASK) 1800 180 1961 (or)
1961
08:00 hrs – 20:00 hrs (Monday to Saturday)
2 Rectification, Refund, Intimation and other Income Tax Processing Related Queries Centralized Processing Center 1800 103 4455 (or)
91-80-46605200
08:00 hrs – 20:00 hrs (Monday to Friday)
3 e-Filing of Income Tax Return or Forms and other value added services provided through e-Filing Portal e-Filing 1800 103 0025 (or)
91-80-46122000
09:00 hrs – 20:00 hrs (Monday to Saturday)
4 Form 16, Tax Credit (Form 26AS) and other queries related to TDS statement, Form 15CA processing TDS Reconciliation Analysis and Correction Enabling System (TRACES) 1800 103 0344 (or)
91-120-4814600
10:00 hrs – 18:00 Hrs (Monday to Saturday)
5 Queries related to PAN & TAN application for Issuance/Update through NSDL Tax Information Network – NSDL 91-20-27218080 (or)
91-20-25658300
07:00 Hrs – 23:00 Hrs (All Days)

Continue reading “INCOME TAX DEPARTMENT HELP DESK CONTACT DETAILS”

Customs, DRAWBACK, E-commerce, EXPORT INCENTIVE, FOCUS, Import-Export, MEIS, Merchant Exporter, Uncategorized

SCHEMES UNDER FOREIGN TRADE POLICY (FTP) 2015-2020 FOR EXPORTERS

CONCEPT

Foreign Trade Policy (FTP) is regulated by the Government of India by way of the Foreign Trade (Development & Regulation) Act, 1992. This Act is concerned with the development and regulation of foreign trade by facilitating imports into and augmenting exports from India. FTP is a set of guidelines and instructions formulated by Central Government covering a period of 5 years. The latest FTP has been issued covering period 2015-2020. Following schemes are mainly covered in the policy of 2015-2020.

 MERCHANDISE EXPORTS FROM INDIA SCHEME (MEIS)

The scheme has been designed by merging 5 different schemes of earlier policy (Focus Product Scheme, Market Linked Focus Product Scheme, Focus Market Scheme, Agri. Infrastructure Incentive Scrip, VKGUY) in one scheme. Duty credit script is granted on making export of specified products to specified countries. The scripts can be used for payment of duty liability and is freely transferable in market.

 SERVICE EXPORTS FROM INDIA SCHEME (SEIS)

This scheme has replaced the earlier Served From India Scheme (SFIS). SEIS provides for rewards to all Service providers of notified services, who are providing services from India, regardless of the constitution or profile of the service provider. The rate of reward under SEIS would be based on net foreign exchange earned. The reward issued as duty credit scrip, would no longer be with actual user condition and will no longer be restricted to usage for specified types of goods but be freely transferable and usable for all types of goods and service tax debits on procurement of services / goods.

ADVANCE AUTHORISATION

This scheme endeavours to neutralise the incidence of customs duties of the imported inputs. Advance authorisation are exempted from payment of basic customs duty, additional customs duty, anti-dumping duty and safeguard duty, if any. To avail such benefit under the scheme, there is a condition to fulfil export obligation. The scheme necessitates export with minimum value addition of 15%. Advance authorisations are issued to the exporters on the basis of their annual requirements.

DUTY FREE IMPORT AUTHORISATION

DFIAs are issued to exporters to allow duty free import of inputs, fuel, oil, energy sources, catalyst which are required for production of export products. The DFIA authorisations are issued only for the specific products for which SION have been notified. Unlike certain exceptions, most of the provisions of DFIA are similar to the provision of Advance Authorisation Scheme.

DUTY DRAWBACK SCHEME (DBK)

DBK has been one of the popular and principal methods of encouraging exports. It is a relief by way of refund/recoupment of customs and excise duty paid on inputs or raw materials and service tax paid on input services used in manufacture of export goods. Duty Drawback is beneficial provision given under the Customs Act, 1962 and Drawback Rule, 1995. Drawback is not allowed when assessee opts for advance authorisation scheme. DBK could be all industry rate or brand rate. Latest Notification through which DBK allowed is 110/2015-cus.

EXPORT PROMOTION CAPITAL GOODS (EPCG) SCHEME

EPCG Scheme allows import of capital goods at Zero customs duty. Alternatively, the Authorisation holder may also procure Capital Goods from indigenous sources. Import under EPCG Scheme is subject to an export obligation equivalent to 6 times of duty saved on capital goods to be fulfilled in 6 years. The scheme covers manufacturer exporters with or without supporting manufacturer(s), merchant exporters tied to supporting manufacturer(s) and service providers.

DEEMED EXPORTS

“Deemed Exports” refer to those transactions in which goods supplied do not leave country, and payment for such supplies is received either in Indian rupees or in free foreign exchange. It mainly covers supplied made to SEZ/ EOU / STP / EHTP / BTP. Deemed exports are allowed most of the benefits which are extended to exporter making physical exports outside India.

Amazon FBA in UK from India, Amazon.in, Business, Customs, E-commerce, E-commerce Business, EXPORT INCENTIVE, FOCUS, GST, GST Registration, GST Returns, Import-Export, Merchant Exporter, Uncategorized

CBEC NOTIFIES 0.1% GST RATE FOR SUPPLIES OF GOODS TO MERCHANT EXPORTERS FOR EXPORTS

CBEC has notified that inter-state/ domestic supply of taxable goods by a registered supplier to a registered recipient/ merchant exporter, for exports, shall attract a nominal GST rate of 0.1%, under CGST/ IGST/ UTGST, in line with recommendations of the 22nd GST Council Meeting held on 6 Oct. 2017, subject to fulfillment of certain conditions, as under:

  1. The registered supplier shall supply the goods to the registered recipient on a tax invoice;
  2. The registered recipient shall export the said goods within a period of ninety days from the date of issue of a tax invoice by the registered supplier;
  3. The registered recipient shall indicate the Goods and Services Tax Identification Number of the registered supplier and the tax invoice number issued by the registered supplier in respect of the said goods in the shipping bill or bill of export, as the case may be;
  4. The registered recipient shall be registered with an Export Promotion Council or a Commodity Board recognised by the Department of Commerce;
  5. The registered recipient shall place an order on registered supplier for procuring goods at concessional rate and a copy of the same shall also be provided to the jurisdictional tax officer of the registered supplier;
  6. The registered recipient shall move the said goods from place of registered supplier –
    1. directly to the Port, Inland Container Deport, Airport or Land Customs Station from where the said goods are to be exported; or
    2. directly to a registered warehouse from where the said goods shall be move to the Port, Inland Container Deport, Airport or Land Customs Station from where the said goods are to be exported;
  7. If the registered recipient intends to aggregate supplies from multiple registered suppliers and then export, the goods from each registered supplier shall move to a registered warehouse and after aggregation, the registered recipient shall move goods to the Port, Inland Container Deport, Airport or Land Customs Station from where they shall be exported;
  8. In case of situation referred to in condition (vii), the registered recipient shall endorse receipt of goods on the tax invoice and also obtain acknowledgement of receipt of goods in the registered warehouse from the warehouse operator and the endorsed tax invoice and the acknowledgment of the warehouse operator shall be provided to the registered supplier as well as to the jurisdictional tax officer of such supplier; and
  9. When goods have been exported, the registered recipient shall provide copyof shipping bill or bill of export containing details of Goods and Services Tax Identification Number (GSTIN) and tax invoice of the registered supplier along with proof of export general manifest or export report having been filed to the registered supplier as well as jurisdictional tax officer of such supplier.

The registered supplier shall not be eligible for the above mentioned exemption if the registered recipient fails to export the said goods within a period of ninety days from the date of issue of tax invoice.

  • 1% GST Rate for Supplies to Exporters: CBEC Notification 40/2017 Central Tax Rate 23 Oct. 2017
  • 1% GST Rate for Supplies to Exporters: CBEC Notification 41/2017 IGST Rate 23 Oct. 2017
  • 1% GST Rate for Supplies to Exporters: CBEC Notification 40/2017 UT Tax Rate 23 Oct. 2017
Business, Customs, GST, GST Registration, GST Returns, Import-Export, Indirect Taxes, Uncategorized

THE MAJOR HIGHLIGHTS OF THE GST COUNCIL IN THE 22ND MEETING AT NEW DELHI ON 6TH OCTOBER, 2017

THE MAJOR HIGHLIGHTS OF THE GST COUNCIL IN THE 22ND MEETING AT NEW DELHI ON 6TH OCTOBER, 2017  ARE AS UNDER:

  1. In a relief to exporters, it was announced that IGST paid for the month of July and August will be refunded from October 10 and October 18 respectively.
  2. An e-wallet will be created for each exporter by April 1, 2018 to facilitate the refunding of their returns.
  3. Quarterly filing of returns and quarterly payment of tax for taxpayers having turnover up to Rs. 1.5 Cr from third quarter i.e. from October,2017.
  4. The due dates for filing the quarterly returns shall be announced in due course. Meanwhile, all tax payers have to file Form GSTR 1,2 & 3 for the month of July, August and September, 2017 on the monthly basis.
  5. GSTR 3B shall be required to be filed on monthly basis till December, 2017.
  6. The threshold for composition scheme has been hiked from Rs 75 lakh to Rs 1 crore.
  7. No requirement to pay GST at the time of receipt of advances on account of sale of goods for taxpayers having turnover up to Rs. 1.5 crore.
  8. Manufacturers and restaurants will pay 1 per cent, 2 per cent and 5 per cent respectively under composition scheme
  9. Exemption from registration for service providers making inter-State supply of services up to Rs. 20 lakh (Rs. 10 lakh in special category States except J&K)
  10. Suspension of reverse charge mechanism under Section 9(4) of the CGST Act and 5(4) of the IGST till 31st March 2018.
  11. Items including unbranded namkeen, unbranded ayurvedic medicines, ICDS food packages, khakra chapati, waste obtained from rubber, plastic and paper have been brought under the 5% slab.
  12. Job work rates rationalized on several services.
  13. Rate for Synthetic yarn; artificial yarn; spun yarn of manmade fiber reduced from 18% to 12%.
  14. Invoice Rules are being modified to provide relief to certain classes of registered person.

 Author: CA Rinki Mittal

GST, GST Returns, Uncategorized

MECHANISM OF GST MONTHLY RETURNS

MECHANISM OF GST MONTHLY RETURNS

Every registered dealer (except Input service distributors, composition dealers, suppliers of online information and database access or retrieval services who have to pay tax themselves, NR, Tax payer liable to collect TCS, Tax payer liable to deduct TDS) have to file a monthly return that contains details of all outward supplies i.e. sale made in Form GSTR1.

Suppose Ram is the registered dealer filing GSTR1               

⇓⇓⇓⇓Details of outward supplies filed by Ram in his GSTR1 will be auto-populated in GSTR2A of all the dealer to whom Supplies were made by Ram suppose Shyam is one of the dealer to whom supplies were made by Ram.

Now every dealer whose details filed above (Shyam in our example) shall verify, validate, modify or delete the details received under form 2A as per his records.

If any changes are made by dealer (Shyam) in form GSTR2A then such changes will be available in Form GSTR1A of Supplier (Ram). He can either accept or reject the details. If form 1A is accepted by Supplier (Ram), form GSTR1 furnished earlier shall stand amended to the extent of modifications accepted by him.

 

If changes made by Shyam are accepted by Ram then his form GSTR2A will be amended accordingly. On the basis of this form GSTR2 will be generated. GSTR2 is prefilled for a tax payer based on the detail filed in GSTR1 and validation made by both the parties.

Now dealer (Ram) has to file form GSTR3 from the information which is auto – populated through GSTR1 and GSTR2.  And have to pay any tax liability, interest, Penalty if any.

 

Author: CA Rinki Mittal

Income Tax, Penalty

ALL ABOUT SECTION 234F PENALTY FOR LATE FILING OF INCOME TAX RETURN (ITR) AFTER DUE DATE U/S 139(1)

A new section 234F has been inserted by the government in the Income Tax Act. As per this section, an individual would have to pay a fee of up to Rs 10,000 (maximum) for filing income tax return after the due dates specified in section 139(1) of the Act.

The fee to be levied is based on the time period of delay which is as follows:

  1. A fee of Rs 5,000 in case returns are filed after the due date but before the December 31 of the relevant assessment year or
  2. Rs. 10,000 in case it is filed after December 31 of the relevant assessment year.

However, as a relief to the taxpayers earning less than Rs 5 lakh the maximum penalty will be Rs. 1000.

Penalty for filing income tax return after due date is only applicable from FY 2017-18
i.e. this fee is applicable with effect from April 1, 2018 and will not apply for returns filed for FY 2016-17 for which the deadline is July 31, 2017.

For the purpose of filing income tax returns, financial year (FY) refers to the year in which you have earned the income through various sources such as salary, rent etc.

The financial year immediately following the above mentioned year is the assessment year for the preceding FY.

You are required as per income tax rules to file your income tax returns for the income earned in a financial year in the related assessment year.

This penalty will be applicable from assessment year April 1, 2018 and onwards and therefore apply to returns filed after this date. This means that all income tax returns to be filed for the financial year 2016-17 or assessment year 2017- 18 and before will not come under the purview of this section.

Currently, section 271F allows an assessing officer at his sole discretion to levy penalty of Rs 5,000 only if an individual fails to file his/her return before the end of relevant assessment year. This section will not be applicable from assessment year 2018-19 and thereafter but will be applicable for returns filed for FY2016-17 and before.

However, the current provisions of section 234A will still be applicable along with the newly introduced fees. According to Section 234A, simple interest is levied at the rate of 1% per month or part of it on any tax amount if not paid within due dates.

This interest will be payable for the period starting from due date of filing return till the date the return is filed. In case the return has not been filed at all then interest will be calculated from the due date till the date of completion of assessment order passed by the assessing officer.

However, the amount already paid via advance tax or TDS will be subtracted from the total tax payable plus interest along with the fees, applicable from April 1, 2018, as per section 140A of the Act.

If you have claimed a refund in your return which is filed after due date even then, fees provision will be applicable under section 234F.

Since all the new changes will be applicable from assessment year 2018-19 and onwards so even if you have missed the deadlines for earlier income tax returns, the penalty of maximum of Rs 10,000 will not be applicable.

GST, GST Registration

ALL ABOUT GST REGISTRATION EXEMPTION

ALL ABOUT GST REGISTRATION EXEMPTION

  • A trader dealing only in exempted goods or where his aggregate turnover is below Rs 20 lakh in the financial year, but not engaged in inter-state supplies, is not required to register under GST.
  • As per Section 2(6) – “aggregate turnover” means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number, to be computed on all India basis but excludes central tax, State tax, Union territory tax, integrated tax and cess;
  • Rs 20 lakh registration limit is only for intra-state traders.
  • Traders, thus, will not be able to avail of threshold exemption of Rs 20 lakh turnover, if they have inter-state supplies.
  • They have to register if they have inter-state Rs 20 lakh Threshold exemption is only for traders who are trading within the state.
  • But once registered, the traders will have to pay taxes on all supplies, even if turnover is less than Rs 20 lakh.
  • Even if there were no transactions in a certain month, return would have to be filed once registration was done.

As per section 22 Registration of CGST Act

  1. (1) Every supplier shall be liable to be registered under this Act in the State or Union territory, other than special category States, from where he makes a taxable supply of goods or services or both, if his aggregate turnover in a financial year exceeds twenty lakh rupees:

Provided that where such person makes taxable supplies of goods or services or both from any of the special category States, he shall be liable to be registered if his aggregate turnover in a financial year exceeds ten lakh rupees.

(2) Every person who, on the day immediately preceding the appointed day, is registered or holds a licence under an existing law, shall be liable to be registered under this Act with effect from the appointed day.

Business, E-commerce, EQUALIZATION LEVY, Google Tax, Income Tax

ALL ABOUT GOOGLE TAX (EQUALIZATION LEVY) IN INDIA

ALL ABOUT GOOGLE TAX (EQUALIZATION LEVY) IN INDIA

The Google Tax was brought in by the honorable Finance Minister of India, Arun Jaitley in the Union Budget 2016. However, it is known as Google Tax around the world, yet in India it is known as the “EQUALIZATION LEVY”.

WHAT IS THIS GOOGLE TAX (EQUALIZATION LEVY)?

As per the Union Budget 2016, the budget states that any individual or entity who use Non-Resident technology services shall pay 6% of the total gross payment as the equalization levy to the government, but only if the total gross payment exceeds one lakh rupees for the single financial year. It is known as Google Tax or Equalization Levy.

This Law is specially made for the foreign e-commerce companies who has no permanently fixed establishments in India.

WHICH SERVICES COME UNDER THIS LAW?

As of now, this tax law is applicable only on online advertisements. This tax applies to advertisers, not publishers. Means it will not affect your AdSense earning. If you Publish ads on your website with AdSense, this tax doesn’t apply because you are a publisher.

But if you are an advertiser and wants to publish your company’s/product’s ads then this tax will be applicable to you. And for the better or worse the government is preparing rules to expand the list of services under this rule which may be including app marketing and many others.

For example: Let’s suppose you run an organization and need to pay Rs. 10 lakhs to a foreign company for using their online ad benefits like the way many of the populace use Google ads or Facebook ads.

With this new tax, you have to withhold 6% of Rs. 10 lakh i.e. Rs. 60,000/ – and need to pay the equalization of Rs. 9,40,000/- only. Google tax of Rs. 60,000/ – should be paid to the legislature. Assuming that the companies will bear the loss of tax and do not increase their advertising rates.

Facebook, Google, Yahoo, and LinkedIn are major payers of this tax. Excluding the LinkedIn other companies have simply burdened the users with this additional tax.

In such case you have to withhold 6% of Rs. 10 lakh i.e. Rs. 60,000/ – and need to pay the equalization of Rs. 10,00,000/-. Google tax of Rs. 60,000/ – should be paid to the legislature totalling to Rs. 10,60,000/-

Currently, the equalization levy is applicable only on online advertisements, but news of including cloud computing and online entertainment services have been reported, if this turns out to be true then companies like IBM, Microsoft, Amazon Web Services, Apple and Netflix will also be affected.

WHAT IF AN INDIAN BUSINESS OWNER OR COMPANY FAILS TO DEDUCT THIS TAX?

The Budget has proposed that any  individual or entity  fails to deduct this tax or equalization levy or doesn’t deposit it with the government, then the entity will not be allowed to consider the expenses in calculating taxable profits. This will increase the taxable income, thereby hiking the company’s tax liability.