Do you know the A,B,C,D of GST?

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A uniform nationwide goods and services tax (GST),

India’s most ambitious reform initiative that aims to stitch together a common market by dismantling fiscal barriers between states, is staring at fresh hurdles with no signs of an early end to the logjam in Parliament.

The government had targeted to rollout the new tax structure from April 1, 2016, an unlikely possibility given the current impasse in Parliament. The system can be rolled out only when Parliament passes the Constitution Amendment Bill, which can be passed only if at least two-thirds of the members vote in its favour. In addition, at least half of the state Assemblies will also have to pass the Bill.

The delay in the passage of the Constitution Amendment Bill implies that India’s indirect tax system will continue to remain mired in multi-layered taxes levied by the Centre and state governments at different stages of the supply chain such as excise duty, octroi, central sales tax (CST), value-added tax (VAT) and octroi tax, among others.

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Under GST, the Centre and states will tax goods and services at identical rates. For instance, if 20% is the agreed rate on a certain good, the Centre and states will collect 10% each, called the CGST and SGST rates. The delay will likely cause other consequences as well, since states would not be able to decide on the tax rates until the Bill is passed.

The government has commissioned Delhi-based think-tank National Institute of Public Finance and Policy to work out the GST rates that will not bring down either the states’ or Centre’s existing revenue levels. Separately, a panel headed by the chief economic adviser Arvind Subramanian is also looking into what could be the possible revenue neutral rates.

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Revenue-neutral rates, as these are called in technical parlance, have been a bone of contention between states and the Centre, with the state governments pressing for higher rates as a hedge against lower tax earnings after migrating to GST. The Bill has not specified the rate, which will be decided by a GST Council headed by the central finance minister with state finance minister as members.

Pending the passage of the Bill, the Council cannot be formed and rates cannot be decided. In addition, it is also imperative to have a robust country-wide information technology (IT) network and infrastructure to make the implementation seamless across state boundaries.

The IT network is still work in progress, which was to be tested in the run-up to April 1, 2016, before its final roll out. This exercise cannot take place and glitches ironed ahead of implementation unless the Bill is passed and GST rates on specific goods and services are decided.

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New Income Tax Rules Come Into Effect.

The Finance Bill 2017 was approved by Parliament on March 30. Two days after a green signal from the Lower House, President Pranab Mukherjee gave his ‘historical’ assent to the bill thus turning it into a law.

The government tagged along the Finance Bill 2017 some 40 amendments in different acts and passed them under the "cover" of Money Bill to get a speedy clearance.

The Parliament on Thursday approved the Finance Bill 2017. Starting April 1, 2017, some income tax laws will change. Finance Minister Arun Jaitley had announced a number of income tax changes in Budget 2017.

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The Finance Bill 2017 was passed with some sweeping changes to country’s existing tax system. Here are a few things that you must know what you have to do when you file your tax returns and apply for important documents like PAN and Aadhaar cards.

(How GST Will affect Taxation as common man ?)

In addition, 

Some amendments were also introduced in the Finance Bill. Aadhaar number will be a must while applying for PAN as well as filing of income tax returns. To curb black money, the limit on cash transactions has been set at Rs. 2 lakh

• Instead of raising income tax limit, the government opted for a reduction in income tax rate. This for the first time in recent years, the minimum valid rate of income tax was reduced from 10 per cent to 5 per cent. There will be only 5 per cent tax on an income from Rs 2.5 lakh to Rs 5 lakh. However, rebate under Section 87A gets reduced from Rs. 5,000 to Rs. 2,500. And no rebate will be applicable for taxpayers having income above Rs. 3.5 lakh. This means tax savings of up to Rs. 7,700 for those with a taxable income between Rs. 3 lakh and Rs. 5 lakh

• The government has decided a 10 per cent surcharge for an income of Rs 50 lakh to Rs 1 crore Existing surcharge of 15 per cent will remain the same for individuals having income above Rs.1 crore.

• Aadhaar, a unique identity handed out to all Indians, has been made compulsory for applying for a Permanent Account Number (PAN) card as well as filing for income tax returns. This has been introduced to avoid duplicity in filing of income tax.

• The Central Board of Direct Taxes (CBDT) launched a new simple one-page form - ITR-1 'Sahaj' - on Friday for taxpayers who have income from salary, a house property or earn interest income totalling up to Rs. 50 lakh. Part-E of the ITR-1 form seeks information on cash deposits made by the assessee between November 9, 2016 and December 30, 2016 if the "aggregate cash deposits" during this period were Rs. 2 lakh or more.

• The government has put a limit on cash transactions to prevent occurrence and recurrence of incidents of black money. From now on, a cap of Rs 2 lakh for cash transaction has been brought under amended rules in Finance Bill 2017. The Finance Bill had originally proposed the cap at Rs. 3 lakh. If a person receives any sum in contravention of the tax law, he/she will be liable to pay, by way of penalty, a sum equal to the amount.

5 THINGS TO KNOW BEFORE SUBMITTING YOUR INVESTMENT PROOF

It is that time of the year where you, as a salaried tax payer, have to submit Income Tax Investment Proof in order to avoid excess tax deduction.

There are things that you must be aware of pertaining to investment proofs which an individual needs to provide to their employer at the time of tax-saving season. In case you are not aware of them, read on to get complete details on the same. It will not only help you to save tax but also ensure that you are understand why and how it helps. It can be divided in 5 basic ideas, to help you remember these things.

Educating yourself a bit about taxes and tracking your expenses can go a long way in saving the taxes and avoiding the hassle of claiming the refund for excess taxes paid. ? Just leave a missed call on Moneymindz.com India’s Best Financial Advisor 022-62116588 or Download Financial Freedom application and post to expert your Queries. Moneymindz.com offers Free, Unbiased and on-call financial advice on Investment Assistance for insurance, Loan Assistance Retirement, Planning, Money Management Investment, Advisor, Retirement Planning, Best Health Insurance.

Ensure that you submit the bills for your reimbursement claims

There are certain perquisites which are exempt under the Income Tax Act only if you submit the proof of actual expenses to your employer, like telephone reimbursement, reimbursement on books and periodicals, research allowance, etc. “Unless you submit the proof of the related expenses to your employer within the given time, these will be considered to be taxable allowances in your hand and you may not be able to claim exemptions while filing the tax return. Hence ensure that you submit the proof of these tax deductible expenses to your employer,” says Chetan Chandak, Head of Tax Research, H&R Block India.

Know the regulations as well as pros and cons of making investment declaration

Declaring your investment helps the employer deducting correct and appropriate tax amount from the salary of the employees. As certain investments are subject to tax exemption by declaring them the employee can reduce the tax load on their income. Knowing which investments can help you saving tax and and to what extent is important. Besides medical reimbursement and few other expenses like house rent and traveling allowance are also subject of tax exemption. Employers begin collecting the documents as proofs of investment from the month of December and January to validate the declaration made by the employees earlier. This take 2 to 3 months and the process becomes complete by March every year.

(Misconceptions can make offenders of law-abiding taxpayers)

You need to furnish proofs of investments in the month of February and March against your earlier mentioned investments

It is understandable that for premiums and investment installments that are due in March cannot always be validated with receipt or any document months ago. In case you do not have the premium receipts with you or your SIP or ELSS statement does not reflect the installments paid, you have the option of making a declaration and employers will provide you a form for this purpose. When the year-end tax filing would be done you will be given the exemptions based on the declaration made by you.

Finally, you can always get your excess taxes returned to you by furnishing the documents for investment made by you. While it is always better to declare and furnish things in time, you can always furnish investment information and supporting documents later to claim your rightful deductions

Declaration of Additional Income to the employer to avoid penal interest.

You might not be aware, but declaring your other income to your employer can work to your advantage. Other income can be in the kind of rentals from your property, interest on your fixed deposits, etc. If you declare these incomes to your employer, they can then deduct and pay the taxes on your behalf. “The important point to note here is that you may be liable to pay advance tax in respect of such additional income in four quarterly installments. Further, if you have not done this you may be liable to pay interest at 1% p.m. on the quarterly shortfalls. But the benefits of declaring this ‘other income’ to your employer is that they will calculate the due taxes on such income and pay it in the form of TDS. This will save you from the interest for default in payment of advance taxes,” says Chandak.

Do remember to submit the Proof of TDS on Additional Income.

The next important point to note is that if you have declared your other income to your employer, you should also ensure that you submit the details of tax deduction on such income to your employer. Else your employer will deduct the taxes due at full rate and this will result in you paying excess taxes.

A gift for yourself before 31st March

It is 9.30 pm in the night. There are 12 missed calls on her mobile from home. Reena is still searching for tax-saving tips online on the office computer. The mad rush for saving taxes is in full swing as the financial year-end i.e. March 31 approaches like a speeding freight train. If you have been lazy, your employer would have given you the bad news that tax deduction at source (TDS) from your salary will be bigger. Do not worry. Even if you did not plan taxes, here are a few sure-shot tips to save taxes.

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Money invested in tax saved: 

First check if you have used all the tax saving investments under Section 80C. We are talking beyond insurance ULIPs. You can invest up to Rs 1.5 lakh in a financial year and save over Rs 40,000 on taxes alone if you fall in the highest income-tax slab.

There are many options like PPF or public provident fund (15 years lock-in), equity linked saving scheme (3 years lock-in), national saving certificate or NSC and tax saving bank deposit (both have 5 year lock-in). If you are extremely traditional, you can also invest up to Rs 1.5 lakh in employee provident fund (EPF). Like ELSS and PPF, the EPF amount at maturity is tax-free.

In case of NSC and tax-saving FD, interest is taxable. If you have a girl child, you can save tax by opening a Sukanya Samriddhi Yojana account where the maturity proceeds are not taxed.

Beyond section 80C: 

If you have extinguished the section 80C limit, no need to worry.

The NPS or National Pension System can help you save tax over and above the 80C window. Your contribution in the scheme is deducted from income tax up to a maximum of Rs.50,000. 37-year old Om had exhausted the Rs 1.5 lakh savings limit in Section 80C. When he found out about additional NPS sops, it took him less than a week to use the window.

Medical insurance is also an area where you can save tax. This is not an unnecessary expense even if you have employer insurance. Ask Om who was left with any medical cover when he change his job. The transition period was not covered by Om’s previous employer nor his new company. Section 80D allows him to get an individual cover and save taxes, Individuals can save up to Rs 60,000 deduction if they take care of the sub-limits.

If you have a disabled person in close family, the tax authorities up to Rs 75,000 per annum deduction under section 80DD. You can claim this deduction during filing of tax return.

Lastly, if you are a self-employed person paying rent or a salaried employee who does not get House Rental Allowance (HRA), then under section 80GG you can claim the lowest among 25% of the total income, Rs 2000 per month or excess of rent paid over 10% of total income. Do note you can take advantage only if you, your spouse or child does not own any residential accommodation in India or abroad.

How To Complete Tax-Related Issues Before March 31, 2017

With hardly a fortnight left for the end of the financial year 2016-17, the March 31 deadline remains sacrosanct for several tax-related matters. Leaving things to the last minute has its own share of risks. So, keep a 2-4 days buffer to finish all tax-related tasks

A taxpayer invests through a cheque on March 30 (or even on March 29), but the payment doesn’t go through for some reason, say, wrong date or signature mismatch, and by the time the taxpayer rectifies the mistake, it’s the new financial year (FY), i.e., 2017-18. Something may go wrong when it comes to online payments too if things are left to the last minute.

Here are few tax-related matters to attend to now so that they can be wrapped up by March 31.

Filing tax returns

If you are one of those taxpayers who has not filed income tax returns (ITRs) in time, March 31 could be the last date for some of you, depending on the FY that you wish to file for. Archit Gupta, Founder & CEO, ClearTax.com, says, “In one financial year, you can file your IT returns for the previous two financial years. So, in FY 2016-17, you can file returns for FY 2015-16 and FY 16-17. Returns for FY 2014-15 cannot be filed after March 31, 2017.”

If tax remains to be paid
If you are filing ITR for any previous year, make sure you are adding interest on the unpaid tax, if any. Under Section 234A of the I-T Act, interest is levied for delay in ITR filing. The taxpayer is liable to pay simple interest at 1 per cent per month or part of a month for delay in filing ITR. Gupta informs, “To avoid penal interest on tax dues, one must pay all taxes by March 31. However, if advance tax applies to you and you didn’t deposit advance tax as per instalments, interest under section 234C may still apply to you. Businesses covered under presumptive income scheme must also make sure the deposit all their tax dues by March 31.”

More than one employer
If an employee switched jobs in 2016-17, he needs to inform the present employer about the details of income, provident fund (PF) contributions, Section 80C, leave travel allowance (LTA), etc., already made with the previous employers. In fact, this should be done at the time one joins the new job, and by March 31 in any case. Information about salary earned from the previous employer and Tax Deduction at Source (TDS) can be communicated to the current employer by using Form 12B. Besides, one can make disclosures about tax deductions one wants to claim in Form 12BB to their current employer, says Gupta.

Complete your tax savings

The tax saving investments done in FY 2016-17 will help you lower your tax liability for the year. Choosing the right tax saver may not be an easy task for all, hence do not wait till March 31. Click here to find out the right tax saver that suits you.

Ensure continuity

Several tax savers such as PPF, National Pension Scheme (NPS), etc., require a minimum amount to be deposited each year in order to keep them active. Else, one would have to pay the unpaid amount along with penalty to make them active again. Make sure you deposit the requisite minimum amount in them by March 31. Ideally, putting in the minimum amount doesn’t help much in meeting long term goals. It’s better to link one’s investment to a goal and invest the estimated amount accordingly and not just pay the minimum amount as it doesn’t help in the long run in meeting the goal.

While PPF require a minimum deposit of Rs 500 a year to keep it active, the minimum yearly contribution for NPS (Tier I) is Rs 1,000, excluding charges and taxes, but for Tier II, there is no minimum contribution requirement for the financial year. Tier I also requires at least one minimum number of contribution in a year. Keep a tab on these minimum limits as it can be changed at any point of time by the government.

Informing your employer

For salaried individual, merely making a tax saving investment may not be enough. One needs to submit documentary evidence of the same to the employer. Most employers have a cut-off date for such submissions, which could be anytime between January and February 2017. For those who have made tax saving investment after the employer’s cut-off date, the same can be shown while filing ITR. Here is a recap of things to inform your employer.

Conclusion

Investments made on ad-hoc basis have high probability of not giving the desired results. From the start of the next FY, prepare a plan in advance, taking care of your tax savings requirement and the goals to achieve. Unless you begin now, March 31, 2018 will not be any different from what it is this year.

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Tax scenario after demonetisation...

The Central Board of Direct Taxes has cracked down on 18 lakh people who made suspicious deposits of over Rs 5 lakh during the 50-day demonetisation period, as part of its Operation Clean Money. Here is how taxmen are expected to further investigate these possible cases of black money and tax evasion.

Individuals

1. Individuals are exempt from verification for deposits of up to Rs 2.5 lakh (other than minors). No verification required for deposits of Rs 5 lakh for those over the age of 70 years.

2. In case of cash receipts from exempt income such as agriculture, officials will verify these against earlier returns. They may also seek information on land holdings, etc.

3. I-T may seek bank statements to cross-check individuals' bank withdrawals.

4. Those claiming cash receipts from third party as 'gifts', may be asked to pay tax.

5. No need for additional information for those in business if cash holdings are lower than level at the end of March 2016.

Businesses
1. Assessing officer will verify if cash transactions are in line with normal practice by seeking data on monthly sales, stock register entries, bank statements.

2. Investigators will look at abnormal jump in cash sales during November-December 2016 and tally it with sales history.

3. More than one deposit of scrapped Rs 500 and Rs 1,000 notes closer to Dec 30 deadline may trigger attention

4. Non-availability of stock or attempts to inflate stocks by introducing fictitious purchases will also attract scrutiny.

5. Transfer of cash deposits to another entity or account which is not in line with earlier history may invite queries.

To know more about taxation and how to save income_tax

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Let us make advices be your priority

It was Monday morning, when people who regularly play with their TV remote for stock market news suddenly switched their channel to see the fluctuations of players for the tenth season in IPL bifurcating from their regular keenness on stock indices. Indeed, it is truly a magnificent event as of pollsters predicting election outcomes and analysts for stock market, cricket gurus were no behind in analysing who would be the most expensive player yesterday. Every season amazes us with a wonder kid sold for a walloping amount, usually a familiar face most of the time. But, in this season, it was something different when the trend line changed its course and some not so well known players were sold for crores. T. Nataranjan, MD. Shiraj and Aniket Chaudhury all came out from the ashes beating notable players like Pujara and Ishant Sharma, for whom viewers went crazy to be a part of their territorial team. Another underdog from Karnataka, K. Gowtham caught our eyes when Mumbai Indians took him for two crores. Finally, people may call it luck but dedication and sheer hard work always pays off even during a series of unfortunate events like Brexit and Demonetization, Ben stokes was the man with the longest smile.

Big companies are expected to perform and people like going there – It is like for safety and backup. Little do they know that they might end up failing to understand what they are planning, what they are buying and what they are getting? Advices are similar to preaching. People speak, plead or argue in favour of someone. Likewise, before getting into a big company for insurance policy, mutual funds etc., it is better to have a hand on them or precisely an “idea” on the products that you are likely to buy.  When people expected big players to come out wealthiest, some unknown figures became the news on Monday. It was truly unexpected and surely, this world is full of equivocality.

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A brief version of the essential meaning of Personal tax to watch out for

1.With the accessibility of home loans-

Investing in house property is a remarkable venture. If the property is self-occupied then the interest on home loan allowed: with a deduction of up to two lakh. In cases, where an individual owns more than one house the interest is fully allowed if the property has been let out. However, in some cases it might result in a loss according to tax laws, under the head “Income from house property”. The loss could be set off fully against income under other heads – such as salary income, during that particular financial year. Now, there is a cap of two lakh for set off such loss from house property, against other heads of income. The unabsorbed loss carried forward and set off over a period of eight years, but such adjustment is possible only against income from house property.

 2. Social service oriented professionals 

Such as doctors or advocates, or even those engaged in occupations, like fitness trainers or beauticians, have the authority now to invest up to 20% of their gross total income in the National Pension Scheme (NPS). This would result in a tax deduction from their taxable income. However, here is the twist, which states that the overall limit of aggregate should be standing in investments worth 1.5 lakh.

3.Taxes attracted just by withdrawals from National Pension Scheme.

Forty per cent of the total amount standing in a persons’ credit in the NPS is not taxable on closure or counting out of the scheme. From April 1, 2017, the employees’ contribution on partial withdrawal is tax- free up to 25%. While investments made by self-employed personalities in NPS provided with a fillip, the benefits on withdrawal are available only to the salaried. 

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