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Month: May 2017

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Basic Overview of GST – Part-II

We have understood in the last article that GST will consolidate all the indirect…

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We have understood in the last article that GST will consolidate all the indirect taxes levied by State as well as Central Government.

There are so many problems or hindrances in the existing tax system. They creates hurdles for any business to grow. Some of them are as under :

  •  VAT is being charged by each state government at different rates for same product.
  •  We can’t take tax credit of Excise against VAT.
  •  There is also tax on tax as VAT is being also charged on Excise amount.
  •  In case of Inter-state transactions CST is being levied. The credit of the same can also not be taken in the existing tax system.

So, it is very difficult for any business to grow in India. There is also a very complex tax system of indirect taxes. The compliance of taxes are also varied from state to state. After implementation of GST there will be only one tax rate for one product. So, there will be One Nation One Tax. The advantages of the GST are as under :

  •  One Nation and One Tax on all product categories
  •  As there is only one tax called GST so, there is no question of cascading effect of tax
  •  In case of inter-state transaction or purchase from manufacturer, full tax credit can be availed by the buyer.
  •  All the indirect taxes are integrated to GST. So lesser complication and compliance as compared to present system.

Now, we will understand with an example how the GST is different or beneficial from current indirect tax structure.

Example :

Current System : Under GST if within state transaction
ParticularsAmt(Rs.)ParticularsAmt(Rs.)
Basic Price of Product :100Basic Price of Product :100
Excise Duty :12.50SGST @ 9%9
Sub total :                           112.50CGST @ 9%9
VAT @ 12.5% :14.06Total :                                   118
Add. VAT @ 2.5% :2.82
Total :                                   129.38

If we see in the above example for current tax system, excise duty levied on the product can’t be utilized for the payment of VAT. Moreover, VAT is also chargeable on excise duty. It is called cascading effect as there is tax on tax. However, in case of GST, there is no cascading effect of tax and there is no complexity of taxation.

The Government recently decided Tax rate for 98 categories of goods and also for services. The tax rates for various categories are fixed at any of these four rates, i.e., 5%, 12%, 18% and 28%. Government is very  keen to implement the new tax system from 1st Jul, 2017.

Link of GST rate for services

http://www.cbec.gov.in/resources//htdocs-cbec/gst/Schedule%20of%20GST%20rates%20for%20services.pdf

Link of GST rate for goods

http://www.cbec.gov.in/resources//htdocs-cbec/gst/chapter-wise-rate-wise-gst-schedule-18.05.2017.pdf

By CA Jigar Patel

Posted on by admin-s20

Free Corporate Accounting Career Seminar on May 20, 2017

Many young graduates are looking forward to build their career in Corporate Accounting. To…

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Many young graduates are looking forward to build their career in Corporate Accounting. To guide these students Super 20 Training Institute (S20) is organizing Free Corporate Accounting Career Seminar at their Head Office. The seminar is open for all interested students. The focus of the seminar will remain on Accounting, Taxation, Corporate Skills etc. Timing of the seminar will be 5:30 pm to 7 pm on May 20, 2017. For free registrations, students may call 7069646028. Students attending the seminar will get guidance from expert Chartered Accountants as well as discount on various courses offered by the institute.

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Services offered by banks

In today’s article, we will discuss briefly about various services offered by the banks.…

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In today’s article, we will discuss briefly about various services offered by the banks.

  1. Primarily banks accept deposits and provide loans and advances while earning interest rate differential between the two activities.

With these being major functions, there are other services banks provide for which they charge fees, commission, charges, brokerage etc. We will discuss about various loan schemes offered by banks in another article.

  1. Payment services:

Banks provide various payment services to their clients like cheques, drafts (demand drafts / bank drafts), pay orders, electronic payment services like NEFT, RTGS, IMPS, UPI, SWIFT etc., credit cards, debit cards, ATMs, POS machine services etc.

Without payment services our routine life will halt. Banks generally levy bank charges or fees for such services.

  1. Foreign Exchange services:

Banks also provide various foreign exchange services to their client like currency exchange-buy-sell, currency management, currency hedging, currency derivatives etc. Banks generally charge fees / brokerage / commission on such services.

  1. Distribution of financial products:

Today many banks earn their significant income from distribution of financial products like insurance, mutual funds etc. With their wide reach banks are able to reach to the last customer of the country and in turn provide access to financial products to everyone. Banks generally don’t charge customers for these services instead gets commission income from financial service providers.

  1. Advisory services:

Today many banks are providing various consultancy and advisory services like investment banking, financial advisory, wealth management, treasury management, project management etc. Banks charge fees from the clients for proving these kind of services.

  1. Other services:

Banks have wide network, healthy financial and commercial ties with business entities and financial companies and trustworthiness among general public. Hence, people / businesses entrust banks to provide multiple services like locker facility, collateral management, trustee services, custodian services, depository etc.

We will discuss about above services in detail in further articles. You can put in your comments about feedback to the above article or your expectations for the coming articles.

– By Tejas Patel

Posted on by admin-s20

Income Tax for Individual

What is Income Tax? Income tax is the tax levied by the government on…

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What is Income Tax?

Income tax is the tax levied by the government on the total income earned by the assessee.

Types of Income

There are 5 head of income in which the earning or total income can be catogarised as per Income Tax Act, 1961.

  1. Income from Salary
  2. Income from Business and Profession
  3. Income from House Property
  4. Income from Capital Gain
  5. Income from Other Sources

Available Deduction

If any individual makes investment in some of the specified investment schemes or does expenses for some specific purposes, then it would be available as deduction from the gross total income earned by the assessee as given under :

SectionParticularsLimit

80C

MF-ELSS, PPF, PF,LIP, Tax saving Fixed Deposit, Repayment of housing loan, tuition fees of children, etc.

150000

80D

Mediclaim of self, child and spouse

For parents (Rs. 30,000/- in case of senior citizen instead of 25000)

25000

25000

80GDonation to charitable Institute

  50% of net total income

80E

Interest on Higher Education  Actual Interest paid

24(b)

Interest on Housing Loan  Max uptoRs. 2 Lacs

 

 

Taxability of the income (For the A.Y. 2018-19)

Income tax is levied on the income earned by the assessee as per the slab of the income as mentioned hereunder

For Ind/HUFSenior CitizenVery senior CitizenRate of Income Tax

Upto 250000

Upto 300000Upto 500000Nil

250001-500000

300001-500000

5%

500000-1000000

500000-1000000

500000-1000000

20%

Above 1000000Above 1000000Above 1000000

30%

 

Rebate uptoRs. 2500/- is available to the assessee if total income of the assesseedoes not exceeds Rs. 3,50,000/-

On the Income tax calculated as above education cess and secondary and higher education cess is to be calculated @ 3%.

The surcharge will be 10% of the taxable Income between Rs. 50 lakhs to Rs. 1 crore

The surcharge will be 15% of the taxable Income above Rs. 1 crore