Feb 25, 2010

TDS @ 20% will be charged if PAN not available from 01-04-2010

10:46 PM 0
TDS @ 20% will be charged if PAN not available from 01-04-2010
As per new provision of tax deduction at source (TDS) under the Income Tax Act 1961 effective from April 1, 2010, TDS at higher of the prescribed rate or 20% will be deducted on all transactions liable to TDS, where the Permanent Account Number (PAN) of the deductee is not available

Full notification is as under
No.402/92/2006-MC (04 of 2010)
Government of India / Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
***
New Delhi dated 20th January 2010
PRESS RELEASE
A new provision relating to tax deduction at source (TDS) under the Income Tax Act
1961 will become applicable with effect from 1st April 2010. Tax at higher of the prescribed
rate or 20% will be deducted on all transactions liable to TDS, where the Permanent Account
Number (PAN) of the deductee is not available. The law will also apply to all non-residents
in respect of payments / remittances liable to TDS. As per the new provisions, certificate for
deduction at lower rate or no deduction shall not be given by the assessing officer under
section 197, or declaration by deductee under section 197A for non-deduction of TDS on
payments shall not be valid, unless the application bears PAN of the applicant / deductee.
2. All deductors are liable to deduct tax at the higher rate in all transactions not having
PAN of the deductees on or after 1st April 2010. In order that there is no dispute regarding
quoting / non-quoting of PAN or accuracy thereof, the law requires all deductees and
dedutors to quote PAN of deductees in all correspondences, bills, vouchers and other
documents sent to each other. All deductors are, therefore, advised to intimate their
deductees to obtain and furnish their PAN so as to avoid TDS at a higher rate. All deductees,
including non-residents having transactions in India liable to TDS, are advised to obtain PAN
by 31st March 2010 and communicate the same to their deductors before tax is actually
deducted on transactions after that date.
3. The procedure for obtaining PAN is simple, inexpensive and quick. Application for
PAN can be filed in Form 49A to National Securities Depository Ltd. (NSDL) or Unit Trust
of India Investor Services Ltd. (UTIISL) or their intermediaries. Non-residents can apply
through the local embassy / consulate of India. Applications can also be filed, paid for or
tracked online through the Internet on the following web-sites:-
http://incometaxindia.gov.in/
https://incometaxindiaefiling.gov.in/portal/index.jsp
http://www.tin-nsdl.com/
http://www.utitsl.co.in/
4. The Central Board of Direct Taxes (CBDT) has issued Notification No.94/2009
relating to taxation of perquisites / profits in lieu of salary and Circular No.1/2010 for the
guidance of tax dedutors for salaries. These documents are available on the department’s web
site at http://incometaxindia.gov.in/

E-PAYMENT for Service Tax Mandatory from 1-04-2010

9:55 PM 0
E-PAYMENT for Service Tax Mandatory from 1-04-2010
E- payment for service tax mandatory as e-payment with effect from 01-04-2010 on or above the payments of 10 lakhs. Full notification is as under

Notification No. 01/2010 – Service Tax- New Delhi, the 19TH February 2010

G.S.R. (E).- In exercise of the powers conferred by sub-sections (1) and (2) of section 94 of the Finance Act, 1994 (32 of 1994), the Central Government hereby makes the following rules further to amend the Service Tax Rules, 1994, namely :-

1. Short title and commencement.- (1) These rules may be called the Service Tax (Amendment) Rules, 2010.(2) They shall come into force on the 1st day of April, 2010.

2. In the Service Tax Rules 1994 (hereinafter referred to as the said rules), in rule 6, in sub-rule (2), for the proviso, the following proviso, shall be substituted, namely:-“Provided that where an assessee has paid a total service tax of rupees ten lakh or more including the amount paid by utilisation of CENVAT credit, in the preceding financial year, he shall deposit the service tax liable to be paid by him electronically, through internet banking.”

3. In the said rules, in rule 7, after sub-rule (2), the following proviso shall be inserted, namely:-“Provided that where an assessee has paid a total service tax of rupees ten lakh or more including the amount paid by utilisation of CENVAT credit, in the preceding financial year, he shall file the return electronically”.
[F. No. 137/13/2010 - CX.4]
(Madan Mohan)
Under Secretary to Government of India

All the Truth behind Insurance Plans

9:17 AM 0
All the Truth behind Insurance Plans
Generally people were either bulldozed into buying an insurance policy by persistent agents or were statutorily required to buy one. As a

result, there is a mental block against insurance. The soaring Sensex did spark an interest in unit-linked insurance plans as agents positioned insurance as an investment channel rather than a protection. But a few years on, buyers are again wary about ULIPs, what with regulators getting into a turf war over these products.

There is also confusion over comparing motor insurance plans. Until now plans were compared based on price. Now there are additional features to compare as well. Here is a five-minute guide which will cover most of what you need to know about insurance.

Truth about ULIPs

The most efficient method to earn stock market-related returns is to invest in equity. If you have got the capacity to analyse performance of industries and companies and are disciplined enough not to be swayed by the madness of markets, invest directly. For those who understand equities and have a good idea of their own risk appetite, but do not have the time to do the research or a regular review of their portfolio, mutual funds are the best option.

Particularly, systematic investment plans. For the rest (which is a very sizeable number) ULIPs are the best way to get a piece of action from the equity markets. If you make investment of Rs 4,000 every month of which Rs 2,000 is in a ULIP and the remaining Rs 2,000 is in an MF, if both funds turn in an identical performance, you will have a bigger accumulation under your mutual fund scheme. But should you die, your investment targets can remain on course under a ULIP unlike in an MF.

Also, after the recent reduction in charges, net of life insurance charges, ULIPs will offer a superior return over the long-term because they will have lesser charges compared to MFs. The biggest strength of a ULIP is that unlike a mutual fund scheme, ULIP fund managers do not come under any pressure to liquidate assets in a crashing market. The only catch is that investors should not fall prey to the marketing pitch, positioning them as short-term investments. In any case, tax reforms in future are likely to ensure that tax breaks are restricted to only long-term investments.

Truth about term plans

This is one cover that you must chase your agent for and not the other way round. First, let us consider the alternatives to term insurance. One option is to ensure that you have enough assets that generate enough returns to make up for the loss of your salary

the second alternative is that you live in a joint family structure where your relatives will take care of your family. In present times,

neither is really a viable option. Considering that term insurance rates have fallen by over 50% since liberalisation, there is no reason not to buy term cover. There is also no reason for not buying term cover in your 20s. And if you do not find an agent, there is always the online option. Aegon Religare’s term cover, which is the cheapest one in the market, is only available online.

Truth about single premium plans

These are really covers for people that do not otherwise need insurance. Guaranteed return single premium plans do make some sense when interest rates are at a high since these products offer an opportunity to lock into higher rates for a longer period. Plus they are tax free. Last year, LIC’s Jeevan Aastha provided a reasonably high-guaranteed return over the long-term. This year LIC has launched Jeevan Nischay which offers a much lower yield.

Truth about auto insurance

Until last year, it was easy to make a choice between two policies. You bought the one which offered cashless service at the cheapest rate. With insurance rates falling to around 1.5% of the car’s market value, it was not difficult to get a fix on how much the cover would cost either. All that has changed this year with a host of companies offering value-added services.

For the same premium as you paid last year, companies are now offering covers where you can get claims settled without any deduction for depreciation, free car wash coupons and replacement cars. But the truth is it makes little sense to claim for damages that are below a couple of thousands rupees. By doing so, you lose your no claim bonus. The bonus could result in substantial savings when a few years later you upgrade to a costlier car as no-claim bonuses move along with the owner.

Health insurance

The most comprehensive cover under health insurance is not sold to individuals, but their employers. Check if your employer has one and make sure that all your dependents are enrolled. Most group policies do not exclude pre-existing illness. Some even cover treatment related to chronic illnesses such as diabetes which are excluded under individual plans.

Individual health plans sold by public sector companies are becoming increasingly restrictive with sub-limits on how much you can claim. Like in auto insurance, there is a reward for policyholders for every claim-free year under health insurance. This is either in the form of an increase in sum insured or a free health check up. Availing of benefits from your employers cover therefore, makes sense

Feb 24, 2010

TDS/TCS RULES 2010

10:01 AM 0
TDS/TCS RULES 2010
[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (ii)]

GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
CENTRAL BOARD OF DIRECT TAXES
New Delhi, the 18th February, 2010

NOTIFICATION
INCOME-TAX

S.O. 424 (E).– In exercise of the powers conferred by section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:-

1. (1) These rules may be called Income-tax ( First Amendment) Rules, 2010.
(2) They shall come into force from the 1st day of April, 2009.

2. In the Income-tax Rules, 1962, -

(a) for rules 30, 31 and 31A the following rules shall be substituted, namely:-

“Time and mode of payment to Government account of tax deducted at source or tax paid under sub-section (1A) of section 192.

30. (1) All sums deducted in accordance with the provisions of sections 192 to 194, section 194A, section 194B, section 194BB, section 194C, section 194D, section 194E, section 194EE, section 194F, section 194G, section 194H, section 194-I, section 194J, section 194K, section 194LA, section 195, section 196A, section 196B, section 196C and section 196D shall be paid to the credit of the Central Government—
(a) in the case of deduction by or on behalf of the Government, on the same day;
(b) in the case of deduction by or on behalf of persons other than those mentioned in clause (a),—
(i) in respect of sums deducted in accordance with the provisions of section 193, section 194A, section 194C, section 194D, section 194E, section 194G, section 194H, section 194-I, section 194J, section 195, section 196A, section 196B, section 196C and section 196D—
(1) where the income by way of interest on securities referred to in section 193 or the income by way of interest referred to in section 194A or the sum referred to in section 194C or the income by way of insurance commission referred to in section 194D or the payment to non-resident sportsmen or sports associations referred to in section 194E or the income by way of commission, remuneration or prize on sale of lottery tickets referred to in section 194G or the income by way of commission or brokerage referred to in section 194H or the income by way of rent referred to in section 194-I or the income by way of fees for professional or technical services referred to in section 194J or the interest or any other sum referred to in section 195 or the income of a foreign company referred to in sub-section (2) of section 196A or the income from units referred to in section 196B or the income from foreign currency bonds or shares of an Indian company referred to in section 196C or the income of Foreign Institutional Investors from securities referred to in section 196D is credited by a person to the account of the payee as on the date up to which the accounts of such person are made, within two months of the expiration of the month in which that date falls;
(2) in any other case, within one week from the last day of the month in which the deduction is made; and
(ii) in respect of sums deducted in accordance with the other provisions within one week from the last day of the month in which the deduction is made:

Provided that the Assessing Officer may, in special cases, and with the approval of the Joint Commissioner—
(a) in cases falling under sub-clause (i), permit any person to pay the income-tax deducted from any income by way of interest, other than income by way of interest on securities or any income by way of insurance commission or any income by way of commission or brokerage referred to in section 194H quarterly on July 15, October 15, January 15 and April 15; and
(b) in cases falling under sub-clause (ii), permit an employer to pay income-tax deducted from any income chargeable under the head “Salaries” quarterly on June 15, September 15, December 15 and March 15.

(1A) All sums paid under sub-section (1A) of section 192 shall be paid to the credit of the Central Government—

(a) in the case of payment on behalf of the Government, on the same day;
(b) in all other cases, within one week from the last day of each month on which the income-tax is due under sub-section (1B) of section 192.

(2) The person responsible for making the deduction from any income chargeable under the head “Salaries” or, the person who pays tax, referred to in sub-section (1A) of section 192 or, in cases covered by sub-section (5) of section 192, the trustees shall pay the amount of tax so deducted to the credit of the Central Government by remitting it within the time prescribed in sub-rule (1) into any branch of the Reserve Bank of India or of the State Bank of India or of any authorized bank accompanied by an income-tax challan :

Provided that where the deduction or payment, as the case may be, is made by or on behalf of Government, the amounts shall be credited within the time and in the manner aforesaid without the production of a challan.

(3) The person responsible for making deduction under sections 193, 194, 194A, 194B, 194BB, 194C, 194D, 194E, 194EE, 194F, 194G, 194H, 194-I, 194J, 194K, 195, 196A , 196B , 196C and 196D shall pay the amount of tax so deducted to the credit of the Central Government by remitting it within the time prescribed in sub-rule (1) into any branch of the Reserve Bank of India or of the State Bank of India or of any authorized bank accompanied by an income-tax challan, provided that where the deduction is made by or on behalf of Government the amount shall be credited within the time and in the manner aforesaid without the production of a challan.

Certificate of tax deducted at source or tax paid under sub-section (1A) of section 192.
31. (1) The certificate of deduction of tax at source or, the certificate of payment of tax by the employer on behalf of the employee, under section 203 to be furnished by any person deducting tax in accordance with the provisions of—
(a) section 192 shall be in Form No. 16 :
Provided that in the case of an individual, resident in India, where his income from salaries before allowing deductions under section 16 of the Income-tax Act, 1961 does not exceed rupees one lakh fifty thousand, the certificate of deduction of tax at source shall be in Form No. 16AA;
(b) section 193, section 194, section 194A, section 194B, section 194BB, section 194C, section 194D, section 194E, section 194EE, section 194F, section 194G, section 194-I, section 194J, section 194K,section 194LA, section 195, section 196A, section 196B, section 196C and section 196D shall be in Form No. 16A.
(2) The certificate mentioned in sub-rule (1) shall be furnished within a period of one month from the end of the month during which the credit has been given or the sums have been paid or, as the case may be, a cheque or warrant for payment of any dividend has been issued to a shareholder:

Provided that where the income by way of interest on securities referred to in section 193 or the income by way of interest referred to in section 194A or the sum referred to in section 194C or the income by way of insurance commission referred to in section 194D or the payment to non-resident sportsmen or sports associations referred to in section 194E or the income by way of commission, remuneration or prize on sale of lottery tickets referred to in section 194G or the income by way of commission or brokerage referred to in section 194H or the income by way of rent referred to in section 194-I or the income by way of fees for professional or technical services referred to in section 194J or the interest or any other sum referred to in section 195 or the income of a foreign company referred to in sub-section (2) of section 196A or the income from units referred to in section 196B or the income from foreign currency bonds or shares of an Indian company referred to in section 196C or the income of Foreign Institutional Investors from securities referred to in section 196D is credited by a person to the account of the payee as on the date up to which the account of such person are made, the certificate under sub-rule (1) shall be issued within a week after the expiry of two months from the month in which income is so credited :

Provided further that the certificate in the case of deduction of tax under sub-section (1) of section 192 or, payment of tax by the employer on behalf of the employee, under sub-section (1A) of that section or section 194D may be furnished within one month from the close of the financial year in which such deduction was made :

Provided also that the certificate in cases, other than those mentioned in the second proviso, where payment of income-tax deducted is permitted quarterly in accordance with clause (a) of the proviso to clause (b) of sub-rule (1) of rule 30 may be furnished within fourteen days from the date of payment of income- tax:

Provided also that where more than one certificate is required to be furnished to a payee for deductions of income-tax made during a financial year, the person deducting the tax, may on request from such payee, issue within one month from the close of such financial year a consolidated certificate in Form No. 16A for tax deducted during whole of such financial year.

(3) Where in a case, the TDS certificate issued under this rule is lost, the person deducting tax at source may issue a duplicate certificate of deduction of tax at source on a plain paper giving necessary details as contained in Form No. 16 or Form No. 16A , as the case may be.

(4) The Assessing Officer before giving credit for the tax deducted at source on the basis of duplicate certificate referred to in sub-rule (3), shall get the payment certified from the Assessing Officer designated in this behalf by the Chief Commissioner or the Commissioner and shall also obtain an Indemnity Bond from the assessee.




Quarterly statement of deduction of tax under sub-section (3) of section 200.

31A.(1) Every person, being a person responsible for deducting tax under Chapter XVII-B shall, in accordance with the provisions of sub-section (3) of section 200, deliver or cause to be delivered to the Director-General of Income-tax (Systems) or the person authorized by the Director General of Income-tax (Systems), quarterly statement—
(i) in Form No. 24Q in respect of deduction of tax at source under sub-sections (1) and (1A) of section 192; and
(ii) in Form No. 26Q in respect of other cases of deduction of tax at source,

on or before the 15th July, the 15th October, the 15th January in respect of the first three quarters of the financial year and on or before the 15th June following the last quarter of the financial year :

Provided that where,—
(a) the deductor is an office of Government; or
(b) the deductor is a company; or
(c ) the deductor is a person required to get his accounts audited under section 44AB in the immediately preceding financial year; or
(d) the number of deductees’ records in a quarterly statement for any quarter of the immediately preceding financial year is equal to or more than fifty,
the person responsible for deducting tax at source, and the principal officer in the case of a company shall deliver or cause to be delivered such quarterly statements on computer media (3.5” 1.44 MB floppy diskette or CD-ROM of 650 MB capacity):

Provided further that a person other than a person referred to in the first proviso, responsible for deducting tax at source, may at his option, deliver or cause to be delivered the quarterly statements on computer media (3.5” 1.44 MB floppy diskette or CD-ROM of 650 MB capacity):

Provided also that a person responsible for deducting tax at source from the payments referred to in rule 37A shall furnish quarterly statements in accordance with the provisions of rule 37A and rule 37B.

(2) The person responsible for deducting tax at source and preparing quarterly statements shall,—

(i) quote his tax deduction and collection account number (TAN) and permanent account number (PAN) in the quarterly statement:
Provided that the permanent account number shall not be required to be quoted where tax has been deducted by or on behalf of the Government;
(ii) quote the permanent account number of all persons in respect of whose income, tax has been deducted:
Provided that the permanent account number shall not be quoted in respect of the persons to whom the second proviso to sub-section (5B) of section 139A of the Act applies;
(iii) furnish particulars of the tax paid to the Central Government.

(3) The person responsible for deducting tax at source and preparing quarterly statements on computer media shall, in addition to the provisions in sub-rule (2),—

(i) prepare the quarterly statement as per the data structure provided by the e-filing Administrator designated by the Board for the purposes of administration of Electronic Filing of Returns of Tax Deducted at Source Scheme, 2003 supported by a declaration in Form No. 27A in paper format:
Provided that in case any compression software has been used for preparing the quarterly statement on computer media, such compression software shall be furnished on the same computer media;
(ii) affix a label indicating name, permanent account number, tax deduction and collection account number and address of the person responsible for deduction of tax at source, the period to which the statement pertains and the volume number of the said computer media in case more than one volume of such media is used”.

(b) after rule 31A the following rule shall be inserted, namely:-

“Quarterly statement of collection of tax under sub-section (3) of section 206C.

31AA. (1) Every person, being a person responsible for collecting tax under section 206C shall, in accordance with the proviso to sub-section (3) of section 206C, deliver or cause to be delivered to the Director-General of Income-tax (Systems) or the person authorized by the Director General of Income-tax (Systems), quarterly statement in Form No. 27EQ on or before the 15th July, the 15th October, the 15th January in respect of the first three quarters of the financial year and on or before the 30th April following the last quarter of the financial year :

Provided that where,—
(a) the collector is an office of Government; or
(b) the collector is a company; or
(c) the collector is a person required to get his accounts audited under section 44AB in the immediately preceding financial year; or
(d) the number of collectees’ records in a quarterly statement for any quarter of the immediately preceding financial year is equal to or more than fifty,
the person responsible for collecting tax at source, and the principal officer in the case of a company shall deliver or cause to be delivered such quarterly statements on computer media (3.5” 1.44 MB floppy diskette or CD-ROM of 650 MB capacity):

Provided further that a person other than a person referred to in the first proviso, responsible for collecting tax at source, may at his option, deliver or cause to be delivered the quarterly statements on computer media (3.5” 1.44 MB floppy diskette or CD-ROM of 650 MB capacity).

(2) The person responsible for collecting tax at source and preparing quarterly statements shall,—
(i) quote his tax deduction and collection account number (TAN) and permanent account number (PAN) in the quarterly statement:
Provided that the permanent account number shall not be required to be quoted where tax has been collected by or on behalf of the Government;
(ii) quote the permanent account number of all persons in respect of whose income, tax has been collected;
(iii) furnish particulars of the tax paid to the Central Government.

(3) The person responsible for collecting tax at source and preparing quarterly statements on computer media shall, in addition to the provisions in sub-rule (2),—
(i) prepare the quarterly statement as per the data structure provided by the e-filing Administrator designated by the Board for the purposes of administration of Electronic Filing of Returns of Tax Collected at Source Scheme, 2005 supported by a declaration in Form No. 27B in paper format:
Provided that in case any compression software has been used for preparing the quarterly statement on computer media, such compression software shall be furnished on the same computer media;

(ii) affix a label indicating name, permanent account number, tax deduction and collection account number and address of the person responsible for collection of tax at source, the period to which the statement pertains and the volume number of the said computer media in case more than one volume of such media is used.”




(c) after rule 37 the following rule shall be inserted, namely:-

“Returns regarding tax deducted at source in the case of non-residents.
37A. The person making deduction of tax in accordance with sections 193, 194, 194E, 195, 196A, 196B, 196C and 196D of the Act from any payment made to—

(i) a person, not being a company, who is a non-resident or a resident but not ordinarily resident, or
(ii) a company which is neither an Indian company nor a company which has made the prescribed arrangements for the declaration and payment of dividends within India ;

shall send within fourteen days from the end of the quarter a statement in Form No. 27Q to the Director General of Income-tax (Systems) or the person or agency authorized by the Director General of Income-tax (Systems) referred to in rule 36A :
Provided that where the income by way of interest on securities referred to in section 193 or the payment to non-resident sportsmen or sports associations referred to in section 194E or the interest or any other sum referred to in section 195 or the income of a foreign company referred to in sub-section (2) of section 196A or the income from units referred to in section 196B or the income from foreign currency bonds or shares of an Indian company referred to in section 196C or the income of Foreign Institutional Investors from securities referred to in section 196D is credited by a person to the account of the payee as on the date up to which the accounts of such person are made, the statement in Form No. 27Q shall be sent within fourteen days after the expiry of two months from the month in which income is so credited.”

(d) for rules 37CA and 37D the following rules shall be substituted, namely:-

“Time and mode of payment to Government account of tax collected at source under section 206C.

37CA. (1) All sums collected in accordance with the provisions of sub-section (1) or sub-section (1C) of section 206C shall be paid to the credit of the Central Government within one week from the last day of the month in which the collection is made.
(2) The person responsible for making collection under sub-section (1) or sub-section (1C) of section 206C shall pay the amount of tax so collected to the credit of the Central Government by remitting it within the time prescribed in sub-rule (1) into any branch of the Reserve Bank of India or of the State Bank of India or of any authorized bank accompanied by an income-tax challan:

Provided that where the collection is made by or on behalf of the Government, the amount shall be credited within the time and in the manner aforesaid without the production of a challan.

Certificate for collection of tax at source under section 206C (5).

37D. (1) The certificate of collection of tax at source under sub-section (5) of section 206C to be furnished by any person collecting tax at source under sub-section (1) or sub-section (1C) of that section shall be in Form No. 27D.
(2) The certificate referred to in sub-rule (1) shall be furnished within a period of one month from the end of the month during which the amount is debited to the account of the buyer or licensee or lessee or payment is received from the buyer or licensee or lessee, as the case may be:

Provided that where more than one certificate is required to be furnished to a buyer or licensee or lessee for tax collected at source in respect of the period ending on the 30th September and the 31st March in each financial year, the person collecting the tax, may on request from such buyer or licensee or lessee , issue within one month from the end of such period, a consolidated certificate in Form No. 27D for tax collected during whole of such period.

(3) Where in a case, the certificate for tax collected at source issued under this rule is lost, the person collecting tax at source may issue a duplicate certificate of collection of tax at source on a plain paper giving necessary details as contained in Form No. 27D.

(4) The Assessing Officer before giving credit for the tax collected at source on the basis of duplicate certificate referred to in sub-rule (3), shall get the payment certified from the Assessing Officer designated in this behalf by the Chief Commissioner or Commissioner and shall also obtain an Indemnity Bond from the assessee. ”;

For full notification here is a link
NOTIFICATION

Feb 21, 2010

Types of Taxes which American Pays

2:31 PM 0
Types of Taxes which American Pays
Taxation History: - Taxes was firstly introduced in Ancient Egypt as the records we have showed that the pharaoh would collect taxes from the people of Egypt for the kingdom. Taxation also described in the Bible “when the crop comes in, give a fifth of it to Pharaoh. The other four-fifths you may keep as seed for the fields and as food for yourselves and your households and your children."
What is tax? Tax is derived from the Latin word ‘taxare’ meaning ‘to estimate’

A fee charged by a government on a product, income, or activity. If tax is levied directly on personal or corporate.
Too Short But full defines taxes on India.
"The State taxes alcohol heavily"; "Clothing is not taxed in our state”
We generally bother about our Indian taxes but I found some article elsewhere about the American taxes, how much American pays the taxes. There are 12 ways that American would be taxed. Means 12 type of taxes American pay generally.
Tax is the universal and applies to almost every country but the type of tax and the rate structure differs to every country.
Tax is the main source of revenue of every country which she can distribute in different type of expenses like defense and public health.
There is also a saying that ‘nothing is certain but death and taxes’. So taxes are certain and there is the list of 12 taxes which American need to pay.
1) Income Taxes
Income tax is the main tax in the United States as most of the Americans divert to income tax while hearing the word tax. The reason is simple. American pays as much as 35% of their income as income tax which is very heavy. So income tax is the main tax in America.
2) Business Taxes
Also known as corporate taxes, these are direct taxes levied on the profits of businesses. Expenses that are deemed necessary to the business can usually be deducted to lower the amount of profits subject to taxation.
3) Payroll Taxes
Payroll taxes are the taxes which employees pay from their wages. The employer must cut the tax amount to their wages and pay to the government of America. Some payroll taxes include federal withholdings, disability insurance, Medicare, and other state withholdings.
4) Capital Gains Taxes
Capital gains are the income generated from sale of an assets or stock. Capital gains are generated from the sale price deducting to the purchase price of any stock or property. In the United States a tax is levied on all income generated from a taxpayer’s capital gains. Alternatively, if a taxpayer suffers from capital losses they can deduct the full loss amounts. The most common capital gains are created from the sale of stocks, bonds, and property.
5) Inheritance Taxes
The inheritance tax is the tax which is also known as death tax. Any property transferred due to death of a taxpayer is inheritance tax. However, when they are left to a spouse or a charity, the tax usually does not apply.
6) Consumption tax
Consumption taxes –consumption tax are also known as sales tax. Sales tax levied on the point of purchase to different goods. The rate of consumption tax are different to different goods and the location wise as due to large area the state and local authority charge sales tax at different level.
7) Property Taxes
Property taxes are the taxes which are imposed on the assets and properties for the ownership. These taxes levied on different types of assets like real estate as well as some personal properties.
8) Excise Taxes
Excise taxes are the taxes which are taxed on product cost. The same as in India excise taxes are on manufacturing units and the tax rate are high. Excise taxes are high on some products as well as some products are free from excise whereas some products have some exemption limit in America.

9) Gift Taxes
A gift tax is the tax which is taxed of transfer the property from one hand to another. Gift is considered to some value products to be transferred with no cost or less than actual cost. There is gift tax in America but a few exemptions thereon.
10) Retirement Taxes
Retirement tax is those which are levied on taxpayer retirement in America.
11) Tariffs
In India it is also known as custom duty. Tariffs are the tax which is levied on import and export of the goods. In America the import duty is high whereas export duty is low to encourage domestic manufactures and to increase the prices of foreign goods.
12) Tolls
Tolls are the fees or the tax which is charged when some vehicle cross specific boundary or some bridge which is very costly in view of manufacturing. Every time the vehicle crosses the toll it needs to pay a specific amount of money as the fees of toll or tax.

Feb 20, 2010

Notification dated 19 febuary regarding section 80-IA(4)(iii) of Income Tax

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Notification dated 19 febuary regarding section 80-IA(4)(iii) of Income Tax
Section 80-IA(4)(iii) of the Income-tax Act, 1961 – Deductions – In respect of profits and gains from industrial undertakings, etc., in certain cases – Notified undertaking which develops, operates and maintains an industrial park – Kolte Patil Developers Ltd. notified u/s 80-IA(4)(iii)

NOTIFICATION NO  10/2010
Dated: February 19, 2010
Whereas the Central Government in exercise of the powers conferred by clause (iii) of sub-section(4) of section 80-IA of the Income-tax Act, 1961(43 of 1961)(hereinafter referred to as the said Act), has framed and notified a scheme for industrial park, by the notification of the Government of India in the Ministry of Finance (Department of Revenue, Central Board of Direct Taxes) vide number S.O. 51(E), dated the 8 th January, 2008 and amended vide number S.O. 1605 (E) dated 2 nd July, 2008;
And whereas M/s. Kolte Patil Developers Limited, having its registered address at 2 nd Floor, City Point, Boat Club Road, Pune-411 001, has developed an Industrial Park at Survey No. 198/1B, Lohgaon, Pune, Taluka Haveli, District Pune, Maharashtra [(Project Giga Space), (Building Alpha-1, Alpha-2, Beta-1, Beta-2, Gamma & Delta-2)];
Now, therefore, in exercise of the powers conferred by clause (iii) of sub-section (4) of section 80-IA of the said Act read with Rule 18 C of the Income Tax Rules, 1962, the Central Government hereby notifies M/s. Kolte Patil Developers Limited, Pune as an undertaking and the project at Survey No. 198/1B, Lohgaon, Pune, Taluka Haveli, Districti Pune, Maharashtra [(Project Giga Space), (Building Alpha-1, Alpha-2, Beta-1, Beta-2, Gamma & Delta-2)], being developed and being maintained and operated by the said undertaking, as an industrial park for the purposes of the said clause (iii) subject to the terms and conditions mentioned in the annexure to this notification.
ANNEXURE
The terms and conditions on which the approval of the Government of India has been accorded for setting up of an industrial park by M/s. Kolte Patil Developers Limited, Pune.
1. (i) Name of the Industrial Undertaking,
Kolte Patil Developers Limited
(ii) Location
Survey No. 198/1B, Lohgaon, Pune, Taluka Haveli, Districti Pune, Maharashtra [(Project Giga Space), (Building Alpha-1, Alpha-2, Beta-1, Beta-2, Gamma & Delta-2)].
(iii) Minimum Constructed Floor Area
15,000 Square Meters
(iv) Proposed industrial activities
As defined in Industrial Park Scheme, 2008
(v) Percentage of allocable area earmarked for Industrial use
75% or more
(vi) Percentage of allocable area earmarked for commercial use
10% or less
(vii) Minimum number of industrial units
30 Units
(viii) Date of commencement of the Industrial Park
09.05.2007

2. The Industrial Park shall be construed as developed on the date of commencement certificate from the local authority which is 09.05.2007.
3. The industrial park should be owned by only one undertaking.
4. The tax benefits under the Act will be available to the undertaking only after minimum number of thirty units are located in the Industrial Park. For the purpose of computing the minimum number of industrial units, all units of a person and his associated enterprises will be treated as a single unit.
5. No industrial unit, along with the units of an associated enterprise, shall occupy more than twenty five per cent of the allocable area.
6. The tax benefits under the Act will be available only to the undertaking notified vide this notification and not to any other person who may subsequently develop, develops and operates or maintains and operates the notified industrial park, for any reason.
7. The Industrial units shall undertake only those activities as specified in Industrial Park Scheme, 2008.
8. The undertaking must keep separate books of accounts for the industrial park and must file its income tax returns by the due date to the Income-tax department.
9. The notification will be invalid and M/s. Kolte Patil Developers Limited shall be solely responsible for any repercussions of such invalidity, if
(i) the application and subsequent documents furnished by it, on the basis of which the notification is issued by the Central Government contains wrong information/misinformation or some material information has not been provided in it.
(ii)  it is for the location of the industrial park for which notification has already been issued in the name of another undertaking.
10. The undertaking shall furnish an annual report to the Central Board of Direct Taxes in Form IPS-II.
11. The conditions mentioned in this notification as well as those included in the Industrial Park Scheme, 2008 should be adhered to during the period for which benefits under this scheme are to be availed. The Central Government may withdraw the above approval in case the undertaking, fails to comply with any of the conditions.
12. Any amendment of the project plan without the approval of the Central Government or detection in future, or failure on the part of the applicant to disclose any material fact, will invalidate the approval of the industrial park.
F.No. 178/63/2009-ITA-I]
(PADAM SINGH)
Under Secretary to the Government of India

Feb 18, 2010

How to Apply for Import Export Code Number (IEC)

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How to Apply for Import Export Code Number (IEC)
If someone starts the business of import and export one need to apply and get IMPORT EXPORT CODE number which is also called (IEC NUMBER) in India. Today there is a lot of potential in import and export business as in this business manufactures as well as traders get a very big market to purchase or sale the goods with big money into the pocket. The data of import and export are very rising every year. Earlier, import and export were considered very risky as well as high legal formalities but now a day’s government made it so easy that anyone can do this business. Government also makes some exceptions like income from export business are exempted to some extend to the income tax as well as there is no VAT/SALES TAX on export. Government also allows importing some duty free raw material in various circumstances as well as time to time. So for applying & getting IEC number in India there is a procedure to which you will get IEC number very soon & without any headache. The procedure become simpler with the policy circular no. 15(RE-2006) dated 27th July 2006.

Eligibility & other provision for IEC
1- No import and export will be made without a valid IEC number unless exempted.
2- An application for grant of IEC number shall be made by the Registered/Head Office of the applicant to the licensing authority concerned (to the office of the Zonal Joint Director General of Foreign Trade, Mumbai if the Registered/Head office of the applicant is located in the form specified in Appendix 2A below and shall be accompanied by documents prescribed therein.
3- The IEC number will be valid for its all braches mentioned in IEC.
4- If the IEC code misplaced, the holder can request for duplicate number with an affidavit.
5- If IEC user wants to surrender the number he can request issuing authority and the authority will immediately informs the entire channel that IEC number is inactive.
Paper required for getting IEC
1- Request letter on company’s letter head.
2- Application in appendix 2 and appendix 3 format duplicate.
3- Application fees of Rs, 1000 in favouring of licensing office.
4- Bank certificate duly signed by bank manager on bank’s letter head.
5- Pan card copy
6- Self addressed envelop with stamp of Rs. 25.
7- Signature in declaration.
8- Two colored passport sized photos.
9- All documents should be self attested.
10- All pages of the application form should be duly signed by the applicant.
11-IEC code is 10 digit numeric code issued by DGFT (Director General of Foreign Trade) Ministry of commerce on behalf of government of India
 How to Apply for Import Export Code Number (IEC)

Feb 15, 2010

Last date of filling ITR-5 of income tax extended

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Last date of filling ITR-5 of income tax extended

Central Board of Direct Taxes has decided to extend the time limit for filing ITR-V form relating to income-tax returns filed electronically (without digital signature) on or after 1st April 2009, up to 31st March 2010 or within a period of 120 days from the date of uploading of the electronic return data, whichever is later. The ITR-V form should continue to be sent by ordinary post to Post Bag No.1, Electronic City Post Office, Bengaluru – 560100 (Karnataka). However, in cases where email acknowledgement for ITR-V form is not received by the taxpayer from the CPC Bengaluru, the taxpayer may send another duly signed ITR-V form by speed post to Centralized Processing Centre, Electronic City Post Office, Bengaluru, Karnataka – 560100.
 
This has been done in relaxation of the stipulation in Circular No. 3/2009 dated 21.05.2009 which allows taxpayers who file their income tax returns in electronic form without digital signature to submit their ITR-V form duly verified and signed, within a period of 30 days thereafter to Post Bag No.1, Electronic City Post Office, Bengaluru, Karnataka-560100, by ordinary post.
 
The relaxation has been made following requests from taxpayers that, as a one-time measure, the time limit for filing of ITR-V form may be extended to 31st March 2010 and that alternative modes of submission of ITR-V form may also be provided in cases where an ITR-V form has not been received at CPC, Bengaluru by ordinary post.
 
To assist taxpayers, a limited call center service with two agents has been established at ITD-CPC, Bengaluru. Taxpayer queries on status of ITR-V receipt at CPC, Bengaluru will be answered on080-43456700 between 9:30 AM to 6 PM between Monday to Friday. The service will be available in English, Hindi and Kannada
 

Feb 13, 2010

INCOME TAX RETURN PREPRATION SOFTWARE FOR 2009-10

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INCOME TAX RETURN PREPRATION SOFTWARE FOR 2009-10
INCOME TAX RETURN PREPRATION SOFTWARE FOR 2009-10: "INCOME TAX RETURN PREPARATION SOFTWARE FOR THE ASSESSMENT YEAR 2009-10

It's very hard to submit income tax challan in india now a days as very hard to learn about income tax forms and how to prepare them.

There are different forms for different return in income tax for example form 16 a is used to show tds file for personal income tax so above all it's really difficult to work individually and we need to take help from charter accountant.

I am publishing INCOME TAX RETURN PREPARATION UTILITY FOR THE ASSESSMENT YEAR 2009-2010 in the excel form which will be very helpful to you in preparation of the annual return as well as filling forms like ITR-1,ITR2,ITR3,ITR4

It's the new release by INCOME TAX DEPARTMENT in the MS-EXCEL FORM

For download the INCOME TAX RETURN PREPARATION UTILITY 2009-2010 go to

RETURN PREPARATION UTILITY ITR-1 TO ITR-8"

Feb 12, 2010

All About Capital Gain Tax

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All About Capital Gain Tax


Capital Gain:- As per Indian Income Tax laws, a capital gain tax is a voluntary tax payable on the sale of assets, investments, capital accumulation, and productivity
Capital Gain can be divided into two parts with its name suggests one is capital and second is gain.
Capital investment: - is generally income earned from sale of Capital Investment, these investment may be as house or farmhouse, any stock, bond or shares and securities etc.
Gain: - Gain is generally the difference between sale and purchase price of the capital investment.
Capital Gain is of two types:-
1- Short term capital gain
2- Long term capital gain
Short term capital gain: - if any assets are sold with in three years to the date of purchase, it will be treated as short term capital gain. But in the contest of shares and securities the duration of short term is one year
Taxability of short term capital gain on shares and securities: - Section 111A of the income tax act 1961 provides that if the shares, bonds etc. are sold within 1 year to the purchase date, income derived from that sale will be treated as short term capital gain. The rate of income tax on short term capital gain on share is 10% up to assessment year 2008-09 and 15% from the assessment year 2009-10. The short term capital gains other than those u/s 111A shall be added to the income of the assesses and no such benefit is available on short term capital gains arising in other cases and they will be taxed normally at slab rates applicable to the assesses.
If someone does the business of selling and purchasing shares or securities, he/she can not take the advantage of Section 111A of the income tax act and the income of the assesses will be treated as ‘business income’ and will be taxed accordingly.
To know more go to
All About Capital Gain Tax

Feb 9, 2010

Clarification for deduction in respect of contribution to pension scheme under Section 80 CCD

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Clarification for deduction in respect of contribution to pension scheme under Section 80 CCD
 A new clarification is made by income tax department about section 80 CCD of income tax act


Clarification regarding deduction under Section 80 CCD for contribution made under pension scheme in the light of Circular No-1 /2010 dated 11th Jan'2010 issued on the subject of Deduction of Tax at Source.
Clarification about section 80 CCD is as under:-
F.No. 275/192/2009-IT (B)
New Delhi Dated the 9th February, 2010.
Sub: Clarification regarding deduction in respect of contribution to pension
scheme under Section 80 CCD – matter reg.

A number of representations have been received regarding deduction under
Section 80 CCD for contribution made under pension scheme in the light of
Circular No-1 /2010 dated 11th Jan’2010 issued on the subject of Deduction of
Tax at Source etc.
It is clarified that in accordance with the provisions of Section 80 CCD, deduction
in respect of contribution made by an individual in the previous year to his account
under a pension scheme notified, is allowed in computation of his total income –
(a) in the case of an employee, ten per cent of his salary in the previous
year; and
(b) in any other case, ten per cent of his gross total income in the
previous year.
2. It is further clarified that where the Central Government or any other
employer makes any contribution to the account of employee for the pension
scheme, the assessee shall also be allowed a deduction in the computation of his
total income of the whole of the amount contributed by the Central Govt. or any
other employer as does not exceed 10% of his salary in the previous year.
3. Salary for the purpose of above section (80 CCD) includes dearness allowance
if the terms of employment so provide, but excludes all other allowances and
perquisites.
4. It is further clarified that aggregate limit of deduction under this section (80
CCD) along with Sections 80 C, 80 CCC shall not in any case exceed Rs. one
lakh.
Yours faithfully,
(Ansuman Pattnaik)
Director (Budget)
To,
All DDOs of Central Government, State Governments, CAG & other persons as
per standard list


Income Tax Notification about M/s School of Human Genetics and Population Health Kolkata

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Income Tax Notification about M/s School of Human Genetics and Population Health Kolkata
The Organization M/s School of Human Genetics and Population Health, Kolkata, has been approved by the Central Government for the purpose of clause (ii) of sub-section (1) of section 35 of the Income-tax Act 1961 (said Act), read with Rules 5C and 5E of the Income-tax Rules, 1962 (said Rules) from Assessment year 2008-2009 onwards in the category of 'Other Institution', partly engaged in research activities
Full Notification is as under in the link

Income tax Notification about M/s Sundar Lal Jain Charitable Eye Hospital New Delhi

1:54 PM 0
Income tax Notification about M/s Sundar Lal Jain Charitable Eye Hospital New Delhi
The Organization M/s Sundar Lal Jain Charitable Eye Hospital, New Delhi, has been approved by the Central Government for the purpose of clause (ii) of sub-section (1) of section 35 of the Income-tax Act 1961 (said Act), read with Rules 5C and 5E of the Income-tax Rules, 1962 (said Rules) from Assessment year 2009-2010 onwards in the category of 'Other Institution', partly engaged in research activities

INDIAN LAW INSTITUTE NEW DELHI HAS APPROVED IN RESEARCH ACTIVITIES FOR INCOME TAX

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INDIAN LAW INSTITUTE NEW DELHI HAS APPROVED IN RESEARCH ACTIVITIES FOR INCOME TAX
The Organization "The Indian Law Institute, New Delhi", has been approved by the Central Government for the purpose of clause (iii) of sub-section (1) of section 35 of the Income-tax Act 1961 (said Act), read with Rules 5C and 5E of the Income-tax Rules, 1962 (said Rules) from Assessment year 2009-2010 onwards in the category of 'Other Institution', partly engaged in research activities
Full Notification is as under

Notification dated 28-01-2010

WILL MOBILE TAKE THE PLACE OF ATM IN INDIA

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WILL MOBILE TAKE THE PLACE OF ATM IN INDIA
Brick and mortar banks had better be prepared to face a potential threat of mobile service providers breaking into their bastion. If Mr Sunil Bharti Mittal, Chairman and Managing Director of India's largest mobile services provider Bharti, has his way then banks need not set up branches in remote villages or for that matter ATMs in every nook and cranny of the country!
His solution to the problem of financial exclusion across the country is the ubiquitous mobile in the hands of millions of Indians.
“There is no need to set up a branch in every village or for that matter an ATM in every corner of the country. Every mobile phone is a bank on the move. The technology is at work,” said Mr Mittal in his remarks at a panel discussion on ‘World is Transformed' hosted by the State Bank of India late Sunday evening to celebrate the implementation of 100 per cent core banking across the State Bank Group.
Given that information and communication technology is at the root of modern banking, it remains to be seen if mobile service providers will diversify into banking.
India is on its own march to find its own destiny in the 21 {+s} {+t} century. We (corporates) cannot be something on the global stage without being something in India first……The world is rebalancing itself.
We will be among the top 5 economies in the world in the next few decades,” said Mr Mukesh Ambani, Chairman and Managing Director, Reliance Industries, at the panel discussion. Samutkarsha (growth and progress for all) and Samskruti (age-old culture) should underpin India's economic growth, he added.
According to Mr Wim Elfrink, Chief Globalisation Officer, CISCO, his company took the decision to locate its second headquarters outside the US in India as “if you can't be relevant in this part of the world (India) then there is no future.”
India, with its young and educated population, democratic government, growing economy, is a compelling story.
Meanwhile, SBI and its associate banks have completed implementation of one of the biggest core banking solution (CBS) platforms in the world in association with Tata Consultancy Services.
Implementation of CBS now allows the SBI Group to execute an average of about 30 million transactions per day with peak transactions reaching 37 million through a vast network of over 17,700 branches and around 20,000 ATMs covering over 267 million customer accounts across the country and overseas

Feb 8, 2010

WHAT IS SENIOR CITIZEN SCHEME,HOW THE RETURN TREATED

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WHAT IS SENIOR CITIZEN SCHEME,HOW THE RETURN TREATED
I have deposited Rs. 15 lakh in a post office under the Senior Citizens’ Deposit Scheme and I have nominated three of my children to receive the deposited amount on my death indicating the amounts for each of them. All these three children are income tax assessees. I would be grateful if I am advised on the following two points: (i) Whether the nominees concerned have to pay income tax on the moneys received by them. (ii) If yes, whether the payments will be exempted for levy of income tax by including them in the Will of the depositor (senior citizen) indicating inter alia that such payments should be treated as gifts.
Senior Citizens’ Deposit Scheme is not a tax-oriented investment. It was meant for securing a fairer rate of interest for senior citizens at 9 per cent, when the prevailing rate for banks deposits and other safe investments was less.
Deduction under Sec. 80C is available only to the extent of Rs. 1 lakh, which is the overall ceiling for deductions under Sec. 80C. The excess over the ceiling of Rs. 1 lakh will not qualify for deduction under Sec. 80C. Irrespective of the benefit of Sec. 80C to this limited extent, the interest from such deposit is taxable, but not the principal amount when it is returned. Even the amount for which deduction is available under Sec. 80C is not taxable, when the amount is received back on maturity.
It is only deduction availed under annuity schemes covered by Sec. 80CCC that the investment is allowed as a deduction but the return including the principal amount becomes taxable. As for the query regarding taxability of the nominees, where the legal heirs are entitled to the same in their own right, the principal amount received would not be taxable, since it would not have been taxable if the depositor had received it during his life time. Interest, if any, which had accrued during his life time would form part of the estate of the deceased liable in the hands of legal heir/s as representative/s of the deceased. Even interest prior to his death will not form part of their income

Feb 6, 2010

EDUCATIONAL AND MEDICAL institutions under the tax lense

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EDUCATIONAL AND MEDICAL institutions under the tax lense
The Associated Chambers of Commerce and Industry of India (Assocham) has made a strong case for bringing in all educational and medical institutions, including hospitals run on commercial considerations, under the tax net. Also, the personal account number (PAN) and bank account data should be used in a scientific manner to identify individuals evading tax. In a representation sent to the Finance Minister, Assocham has stated that most of the educational and medical institutions and hospitals are being run on a commercial basis but they pay no tax.
The reason for this is that an educational institution is not recognised by the education board or university unless it comes under a society or trust. Accordingly, many of the educational institutions operate under charitable trusts or society and become eligible for exemption either under Section 10(23C) or Section 11 of the Income Tax Act.
Assocham has said that there is an urgent need to utilise the data with the Income Tax Department scientifically to identify persons who are not within the tax net. This needs a focused strategy and can initially be started as a pilot project in metropolitan cities.
For this purpose, a comprehensive analysis is required of the PAN data, the voter list and the list of bank accounts. Banking in the metropolitan cities, by and large, is computerised and as such it will not be very difficult to obtain a list of bank accounts with names and addresses of customers from these banks.
At present, there is no linkage of PAN with the bank account.
Earlier, directions were given that no bank account should be opened unless the account holder gave his PAN or gave a declaration that he or she did not have one. However, the same could not be implemented because of the objections raised by banks as it hampered their business.
The banks can be asked to submit a list of all bank accounts without PAN. A timeframe may be given to the banks to collect PAN from each of their account holders within a time-bound period, say one month or two months. Thereafter, every year, the bank may be asked to submit two lists of bank accounts, one with PAN and another without, giving the aggregate of the deposits and withdrawals during the year.