Tax Law

How to Calculate income tax of Individual

2009-10-20T05:14:00.000-07:00

Calculation of income tax of individual is full based on the assessment which an assessee can do himself or take the help of CA or advocate. If you want to calculate your income tax liability by yourself , then . First of all calculate your different incomes in the following heads .
1. Calculate total incomes under the head of salary less deductions of gross salary according to current finance bill .
2. Calculate total rent earning .
3. Calculate total business or profession earning less expenses which are allow under income tax law 1961.
4. Calculate the income from capital gain . In this income we can include earning from sale of shares and debentures also .
5. Calculate any other income .

Now first deduct section 80 deduction and calculate pure income and calculate your tax under tax slab . and deduct after any rebate . After this you can deposit your tax to bank account by income tax challen and return can be deposited in income tax department .

New Amendment in Section 194 I of TDS

2009-07-12T03:55:00.000-07:00

TDS under 194 I is relating to payment of Rent more than Rs. 120000 annually in Finance bill 2008 , it was the duty of individual to deduct tax of 15 % of rent and deposit in Govt. account and other can deduct 20% of rent of building

Now , in finance bill July 2009 Govt. of India thinks that it is very doubtful for all parties , So , Govt. of India has amended this provision . Now all person who pay rent , are responsible to deduct tax at source 10% of rent and deposit it in Govt. account .

New deduction for National housing bank ( NHB )

2009-07-11T23:16:00.000-07:00

NHB is wholly owned by RBI and Govt. of India has provided new deduction for this bank . From 1st April 2010 , NHB has right to get deduction of 20% of net profit for paying income Tax . Finance manager has provided this deduction due to watching its social and promotional works relating to finance of House construction in rural area.

Suppose NHB earn Rs. X profit
Now after Ist April 2010

Less deduction = X X 20/100
___________________________________
Taxable profit for payment of Tax = xxxxx
__________________________________

New amendments of Charging Income tax on Tea business

2009-07-10T16:13:00.000-07:00

Union budget 2009-10 has made some amendments for charging income tax on tea business. If you are doing tea business . Then , you have to deduct 10% depreciation on total sale proceed of tea. After this you can deduct other expenses. For income tax purpose , 60% of balanced amount is not chargeable to income tax .
We can explain it with example
Sale proceeds of tea business = Rs. 1000
less depreciation on sale proceed
(10% ) = Rs. 100
_____________________________
balance = Rs. 900
less other expenses = Rs. 300
_____________________________
balance = Rs. 600
less 60% of this balance = Rs. 360
_____________________________
Income subject to charge under IT act = Rs. 240
____________________________________
____________________________________

No tax upto 220000 earning of senior citizen

2009-06-28T23:32:00.000-07:00

If you are senior citizen and your age is more than 65 , then your earning of 220000 is out of from any income tax liability . According to new rates of income tax . Senior citizen's pension is only taxable if it is more than Rs. 220000 . But in both situation , senior citizen has to file return in assessment year 2009 to 2010 .

System of preparation of Income tax

2009-02-22T05:28:00.000-08:00

System of calculating and preparing of income tax is very scientific . For calculating income tax , we collect all incomes of a person . It may received from salary , house buildings , business and profession and rest will include in other incomes .
After this, we deduct different deductions from his total income which are valid under income tax laws . After this we calculate income tax . When we calculate income tax , then we deduct different rebates out of income tax which are provided under income tax laws . After above procedure , we calculate and prepare our income tax .
Moreover , we deduct tds or advance tax out of total tax liability and net amount of tax liability will deposit in the accounts of income tax department . If advance or tds is more than total tax liability , then income tax authority will refund , your extra income tax to you .

Video on VAT dicussion

2009-02-17T06:02:00.000-08:00

I think above video will be helpful for understanding vat with enjoyable way . So , I have made above Video , If you are not seeing , then download flash player here .

Read full article on above discussion :-

Value Added Tax , its history , feature and calculation

Value added tax - List of Informational pages

2009-02-17T05:48:00.001-08:00

Value Added Tax , its history , feature and calculation

2009-02-17T04:49:00.001-08:00

Definition of Value added tax

" Value added tax ( generally known VAT ) is a sale tax and it is payable when a businessman sells goods to his customer . VAT is on the price which is added in purchase or raw material . Businessman has facility to deduct VAT ( Input ) out of VAT Output . Then he is liable to deposit net VAT to Govt. account . "

History of VAT

VAT is applied first in mid 1960 in Brazil .
VAT is started in European countries in 1970 .
After this 130 countries accepted VAT .
In India VAT on sale stage applied in 2005 . VAT at manufacturing stage is already in India for 18 years in the form of Mod VAT .
Now , 145 countries has given acceptance for VAT .

Feature and Benefits

It is just conversion of sale tax , earlier business paid sale tax and now pays VAT .
It comes in existence due to defects of sale tax because sale tax law provide double tax burden on businessman .
Saving of businessman due to a set off is given for input Tax .
Overall tax burden will be rationalised .
Price will decrease with ending of cascading effect .
Simplicity
Higher revenue growth

So , Now you want to learn how to calculate VAT , then see below table and learn the simple system of Calculation of VAT

Read Also

Direct Tax Inspection Committee ( Vanchoo Committee )

2009-02-01T05:48:00.001-08:00

Central Govt. of India made the Committee in the direction of Shri K.M. Vanchoo previous head Judge of Supreme Court of India for reducing the black money . This committee presented his report in the front of Parliament in 20 March 1972 . According to this report , in 1968-69 , 1400 Crores of Rs. saved from income tax .
In 31st Dec. 1975 , VDS showed 1500 Crores of Rs. which saved by public.
Today , according to new estimation , approximate 144000 Crores of Rs. is black money. It is true story that , Income tax theft is at large scale . Every year 500 to 600 crores of Rs. are saved tax by Income tax thieves .

History of Development of Income tax

2009-02-01T05:32:00.000-08:00

In 1798 , England had received income tax for facing the problems of international War. Same position was in USA and USA started to get Income tax in 1864 . But Income tax started in India after 1857 Gadar when British Govt. received income tax from Indian people and started to transfer to England . Because , it is new in that time so , it was opposed by several persons . There are many defects in levy of income tax at that time . After correcting all defects , it became permanent source of Govt. Income.

Indian Income Tax Law 1961

In 1956 , income tax law is transfer to Law Commission . Govt. Of India made Direct taxes Administration Enquiry Committee . This committee gave his report to Govt. of India in 30 Nov. 1959 and On this report Govt. of India presented the bill in Lok Sabha in 24 April 1961 and it passed in Sept. 1961 . It applied from 1 April 1961 for Whole Country.
In Income Tax Law of India 1961 , there are 298 sections , and thousands subsections and 11 shedules .

Introduction of Income tax

2009-02-01T05:15:00.000-08:00

Income tax is a subject which change every year. With financial provisions and amendments , Income tax law is changed every year. For writers , it is so difficult to walk with time . But , after all , I try to include all new amendments of next financial bill .
Govt. expenses are increasing day by day for the welfare of public . So , income tax has become so important . Income tax is main source to reduce inequality . With this Govt. can create Socialist Society .
Main feature of Income tax is that it is unbiased , if we compare it with sale tax or excise duty . Because , it is on the income of assessee according to the capacity to tolerate the burden of income tax . This is the base of economic structure of India .

Income Tax

2009-02-01T04:57:00.000-08:00

Income tax is a source of Govt. Income . Govt. works for the welfare of public . For doing welfare , Govt. needs money . Govt. collects tax and uses this fund for making parks , Govt. hospital , Govt. Schools and Govt. College . So , that poor people also develop . It is the duty of general public to pay income tax because , If we do not pay income tax how Govt. works properly. Blood line for Govt. is income tax . 60% of total income gets from this source . If you want to live with pride , it is your duty to pay the income tax . Govt. of India collects income tax under rules and regulations mention in Income tax law 1961 . Every year finance bill is passed for amendments in the rules and regulations of Income tax law 1961 . So , keep touch with these amendments because , we are seeing that Govt. of Indian is changing tax rate slab . Many incomes now exempted so , if you have earned an exempted income then , there is no need to pay any income tax on that income . Govt. encourage savings , for this Govt. allowed rebate on income tax if , you save your earning in LIC or NSS . Rules and regulations of rate of rebates are changing from time to time . For knowing current year rate of rebate , should touch with finance bill of Govt. of India. Govt. also provide you facility of different deductions under section 80 and its subsection , if public uses these funds for the purpose of Govt. , like donation to Prime minister fund etc. So , following are the links which are related to income tax law which will be helpful to understand whole income tax law 1962 with easy way .

Central Excise Duty

2009-02-01T04:33:00.000-08:00

Government Link

2008-12-27T03:52:00.000-08:00

Amendments

2008-12-27T03:35:00.000-08:00

Income tax ( Eight Amendment ) Rules , 2008

In exercise of the powers conferred by section 295 with subs section of 11c of section 80IB of income tax act 1961 , the central board of direct taxes hereby makes the following rules further to amend the Income tax rules 1962
1. (i) These rules may be called the income tax rules
ii) In the income tax rules 1962 , after rule 18DD , the following rule shall be inserted namely :
" 18DDA . Form of report for claiming deduction under sub section 11C of section 80 IB . The report of an accountant which is required to be furnished by the assessee along with the return of income under sub section 11 c of section 80 IB shall be in Form No. 10 CCBD.

Amendments to the Industrial Park Scheme, 2008
Central Government has made some amendments to the Industrial Park Scheme, 2008. See the Notification dated 28th November, 2008 for the details.
INDUSTRIAL PARK SCHEME, 2008 - AMENDMENTS IN FORM IPS-1
Notification No. 106/2008 [F.No. 149/278/2006-TPL], dated 28-11-2008

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), the Central Government hereby makes the following amendments to the Industrial Park Scheme, 2008, namely :
In the Industrial Park Scheme, 2008, in FORM IPS - I,
(i) for para 2.III, the following para shall be substituted, namely:
"2.III Details of industrial activity to be undertaken by industrial units:
______________________
______________________
______________________

(ii) for para 3.VI, the following para shall be substituted, namely:
"3.VI Whether all the criteria as mentioned in para 4 of the industrial Park Scheme, 2008 are met or not:

(a) The date of commencement of the Industrial Park should be on or after the 1st day of April 2006 and not later than the 31st day of March 2009;
Yes/No
(b) The area allocated or to be allocated to industrial units shall not be less than seventy-five per cent of the allocable area;
Yes/No
(c) The area allocated or to be allocated for commercial activity shall not be more than ten per cent of the allocable area;
Yes/No
(d) There shall be a minimum of thirty industrial units located in a industrial park;
Yes/No
(e) For the purpose of computing the minimum number of industrial units; all units of a person and his associated enterprises shall be treated as a single unit.
Yes/No
(f) The minimum constructed floor area shall not be less than 15,000 square metres;
Yes/No
(g) No industrial unit, along with the units of an associated enterprise, shall occupy more than twenty-five per cent of the allocable area;
Yes/No
(h) The industrial park should be owned by only one undertaking; and
Yes/No
(i) Industrial units shall undertake only such industrial activity as defined in clause (j) of para 2 of the Industrial Park Scheme, 2008
Yes/No

2. This notification shall come into force on the date of its publication in the Official Gazette

TDS Return Preparation Slideshow
A Slide Show (demonstration) has been prepared for the preparation of the TDS Returns. Kindly see the TDS Section on the Home page.
Direct Tax Collections appear to be on course
Net direct tax collections during first eight months of the present fiscal (up to November 2008) stood at Rs. 177,251 crore, up from Rs.145,053 crore, registering a growth of 22.2%. Growth in Corporate Taxes was 26.82%, while Personal Income Tax grew at 15.28%. Direct tax collections have already reached 48.56% of the Budget Estimates of Rs.3,65,000 crore, which is pegged at 16.07% above the actual collection of Rs.3,14,468 (provisional) during the last fiscal (2007-08). Press Release
Signing of Double Taxation Avoidance Agreement between Indian and Tajikistan
A Double Taxation Avoidance Agreement has been signed between India and Tajikistan on 20th November, 2008. The Agreement has also provided for the exchange of information between the tax authorities of the two countries.

Regularization of qualified workers appointed against sanctioned post in irregular manner

Regularization of qualified workers appointed against sanctioned post in irregular manner as well as casual workers in Non-statutory Canteens/Tiffin Rooms located in Central Government offices.
Board Letter & Office Memorandum
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Allocation of waiting list candidates for appointment to the post of Tax Assistant
220 candidates, who were in the waiting list for appointment to the post of Tax Assistant, have now been allocated to the various Regions/ Charges in the CBDT. List of candidates

TDS Return Preparation Slideshow

A Slide Show (demonstration) has been prepared for the preparation of the TDS Returns. Kindly see the TDS Section on the Home page.
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Allocation of waiting list candidates for appointment to the post of Tax Assistant

220 candidates, who were in the waiting list for appointment to the post of
Tax Assistant, have now been allocated to the various Regions/ Charges in
the CBDT.
List of candidates
-->
Growth in Direct Tax Collections for the first seven months indicative of improved tax administration
Net direct tax collections during first seven months of the present fiscal (up to October 2008) stood at Rs.166,905 crore, up from Rs.128,864 crore, registering a growth of 29.52%. Growth in Corporate Taxes was 33.49%, while Personal Income Tax grew at 23.14%. The momentum of growth in direct taxes could be maintained, despite present global financial crises / recession and its resultant impact on the Indian economy, mainly on account of a shift in the tax collection strategy of the Central Board of Direct Taxes (CBDT) towards improving the tax deduction at source (TDS) mechanism and encouraging better tax compliance. Press Release
CBDT has issued a new Form of report for claiming deduction u/s 80-IB(11C)
CBDT has issued a new Form of report for claiming deduction under sub-section (11C) of Section 80-IB of the Income-tax Act vide Notification dated 22nd October, 2008.
Option Form for the Steno Grade III in the CBDT
Staff Selection Commission has recommended 118 candidates for appointment to the post of Steno Gr. III in CBDT. The Region/Charge wise allocation of the candidates on merit-cum-preference basis has been issued by the CBDT. List of Successful Candidates. The successful candidates are directed to indicate/exercise his/her preferences in the proforma, duly filled/completed in all respect immediately by speed post or Currier, so as reach it within 21 days from the date of issue of this letter. Memorandum

Definition of Exempted Income

2008-12-27T02:37:00.000-08:00

Income tax laws 1961 provide the clear definition of exempted income . Exempted income means all those income of assessee which does not include in the total taxable income . The complete list of exempted income is provided by this law and every year finance bill can change some or all exempted income in this act . The most benefit of this that some of income is excluded in total income while we calculate our taxable or non taxable income .

Income and its type

2008-12-26T21:20:00.000-08:00

Income tax law 1961 defines the term income . According to law , " Income is receipt of money from any resource . For living every person does any work and get some money from his work . That money is called income .

Types of Income

Income tax law divides income into five major parts :-

1. Salary Income

If a person is a employee or worker in any factory , school or govt or private institute , he gets remuneration or wages . This amount is called salary. Both employees and labourer includes in this category. Law sees only the amount how much the employee get after the limit of exemption , it is the duty of employee to pay the tax out of his salary income .

2. Rent Income or income from houses

If a person have more than one houses and gets rent income , then it is the main type of income in the eye of law and it will include in the clubbing of total income .

3. Income from business or profession

If a person has own business or profession and gets profit from this . After deducting all allowable expenses from this profit , the net profit is a type of income and it includes in the taxable total income of assessee .

4. Capital Gain

If any person have some short term or long term capital in the form of shares , bonds , debentures , and other securities . If he sells it and get gain then this is the main type of his income .

5. Other income

If any person gets any income other than above type then it will include in other income . AdSense income is in the form of other income . If a person gets income from lottery then this is also other income . All other income also include in total income .

See Also
Source of Income Tax Law

Source of Income Tax Law

2008-12-10T06:54:00.000-08:00

The levy of income tax in india is governed by the income tax act 1961 . This act came into force on the first day of April 1962 . The act contains 298 sections and X11 shedules . These undergo change every year with additions and deletions brought about by the finance act passed by parliament . In pursuance of the power given by the income tax act , many rules have been framed to faciliate proper administration of the Income tax act .

Clearance of imported and exported goods

2008-10-15T03:16:00.000-07:00

What is provision , procedure and rules of import and export clearance ?
Ans. There are 5 methods in which we can take goods for import or export and transfer of goods from India to any other country and import to India is generally called clearance for import and export . But Three point must see by custom officer
Duty is paid or not
Goods are prohibited or not
Goods are illegal or not

1st method of import and export and their procedure of clearance:-

Goods can be import for
i) home consumption
ii) For transfer to ware house

In above both cases clearance can be done importer himself or by authority in charge
If Authority in charge do the activity for clearance of imported goods.
a) It is duty of master of vessel to show Import general manifest . In this IGM there will be the detail of goods in ship
b) It is duty of custom officer to check the IGM and the allow the master of vessel to land and unload the cargo
c) It is the duty of port trust to take the goods in their custody.
d) It is duty of importer to show the bill of lading to port trust for taking the goods.
e) If importer is taking the goods for home consumption, then he pay the duty of custom and the show the bill of entry after this he can clear and take the goods for home consumption.
f) If importer wants to keep goods in warehouse, then he will take the bonds in the double amount of custom duty and can transfer his goods to warehouse without paying custom duty.

After sending the warehouse, he can clear the goods from warehouse. For this he will pay the custom duty, rent of warehouse and other charges. After paying this amount assessee can use these goods for home consumption.
2nd method of import or export through baggage – clearance procedure

In real sense , this is not import or export because it includes some necessary goods which needs for traveling from one country to another country but due to cheating they carry goods for commercial use so govt. has started to levy custom duty on all imported baggage except Cvd duty and exempt the custom duty of baggage of laptop
3rd method of import or export through post office – Clearance procedure
1st step
when goods reached on airport or port then these all parcel will go to post office. Some were special post office for taking the delivery of all imported posts like foreign post offices.
2nd step
then post master personally examines the entire parcel imported from any other country. If he any doubt about any parcel he will inform the owner of parcel if he will not come then inform the custom officer and custom officer will open this parcel if there will be the prohibited goods in it , then custom officer will send it to custom department .
3rd step
If there is not any prohibited goods, then importer will pay the custom duty and get his delivery of goods.
4th step
after collecting the custom duty from customer post office department will deposit the custom duty to custom department periodically.
4th Method
– Clearance of Crew stores
It is very necessary for crew member to buy the goods from any country for their own needs. Because they wonder from one country to another country. They are the employees of ship or airplanes department so; there is no duty on crew stores.
5th Method – Clearance of courier
This is private post services which is provided by any company who do the work of imported or exported courier .All rules are regulated by courier import and export clearance rules 1998. These rules approximately same as post office of govt. But value more than 25000 rupees good can not be exported through courier.

Levy of Customs duties

2008-10-09T09:07:00.000-07:00

Q:- Explain the provision of determination of duty under the customs act where goods consists of articles liable to different rates of duty.
Or
Explain the procedure for assessment and collection of customs.
Ans.

Ist step

for assessment and collection of custom duty:-
(a) Determination the rate of duty

Govt. of India fixes the rate of custom duty under CTA 1975 or any other law on goods imported.
(b) Clearance of goods:-

Clearance means transfer of goods from port or airport for home consumption or warehouse.

☻If goods are going for home consumption .It is duty of importer to pay his duty immediately
☻In case goods are going for depositing in warehouse .In such case duty is not collected but govt. can get written statement from assessee that he will pay when goods takes from warehouse for home consumption and pay interest rent and charge of store.
☻Treatment of derelict or wreck goods :-
When somebody export his derelict or wreck goods to India.
The Indian importer is liable to pay custom duty unless he wants to show the proof of goods are free from custom duty under act .
2nd Step of collection of custom duty
☻ duty of master of vessel

It is the duty of master of vessel to show the detail of goods in Import general manifest
☻ Duty of custom officer
It is the duty of custom officer to check IGM and its no. and permit master of vessel to land and unload the cargo.
☻ Duty of port trust:-
It is the duty of port trust to custody the imported goods .
☻Get the delivery of imported goods
Importer gives the bill of lading to master of vessel or port trust and obtain the delivery of goods
☻ Importer shows the bill of entry for clearance of goods for home consumption or for depositing in warehouse
☻ goods cleared for home consumption after duty is paid
☻ goods cleared for warehouse if importer takes the bonds of double of custom duty.
☻ organization

♦ Import department :- for check IGM
♦ Appraising department:- for making assessment
♦Dock examination center :- for physical examination of goods
♦ cash and account department :- for collection of duty
♦bond department :- For dealing of bonds when goods are sent to warehouse
3rd step of collection of custom duty
☻ Remission and abatement
Assessee will not pay duty on pilferage goods.
Pilferage means loss of goods due to pilferage means stealing in small quantities.
♦Pilferage before the arrival of goods into India. :- means no import so no pay the duty by assessee.
♦ Pilferage after the arrival into India but before custom examination :- Duty extinguished upto pilferage :
♦pilferage after examination :- duty is payable on pilferage .
4th step
☻ assessee is not pay duty on damaged goods and lost goods
5th step Power of central govt . to make rules for denaturing or multilation of goods.

Import Quotes

2008-10-06T04:18:00.000-07:00

Import quotes is a limit of quantity or value of goods import .

Discrimination

Discrimination means different rate of tariffs for different countries.

Our mission

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Our mission is to give prefect education of tax laws. We feel that tax laws are most complicate to manufacturer, producers, businessman and other companies’ .So we are trying to present the rules of different tax laws in very simple way. Our aim is to support you on voluntary and social work basis. Our aim is not to earn by giving you tax consultation but we want to give our services free of cost. We welcome all of you to tell us your tax problems so that I and my team can give you correct solution of your tax problems. With this we are trying to give free service to Govt., businessmen, companies and manufacturer and firms. For sending you your tax problems, you can write comment on the end of articles or send the problems to our email id vinod_13242002@yahoo.com
We will feel happy when you get solution of your tax problems. Please help us to fulfill our mission. Because we are on the initial point, we can not make this website as tax solution portal if you do not send you tax problem queries.

Exempted goods from custom duty

2008-10-06T01:14:00.000-07:00

Goods imported under one of the following international organization or programme:- exempt from custom duty under custom tariff act 1975

1. United nations development programme
2. united nations international children fund
3. WHO
4. World Bank
5. ADB
6. ILO
7. FAO
8. United nations population fund
9. united nations world food programs.

Definition of Subsidies

2008-10-06T01:08:00.000-07:00

Subsidy is a financial help given by the Govt. to the domestic producers to make them more competitive in the international markets.