GST (Goods and Services Tax) is consumption tax that charged the buyers to pay for a wide range of domestic and international products as well as goods and services. GST is a multi-stage tax on domestic consumption levied on taxable supplies of goods and services. GST is imposed on every level of a product from raw materials all the way to finished goods. However, consumers still need to pay income tax as GST and income tax is totally different. It is a consumption tax charged on imports items and also value added to goods and services provided by a business to the end user. Goods And Services Tax will be borne by the end-user or consumer and is not intended to add burden to businesses. Benefits of Goods and Services Tax (GST) Following are are the benefits of Goods and Services Tax. 1. Revenue Source GST system is a comprehensive Continue reading
Indian Taxation System
Taxation Aspects of Multinational Corporations in India
Foreign non-resident business entities may have business activities in a variety of  ways. In its simplest form this can take the form of individual transactions in the nature of  exports or import of goods, lending or borrowing of money, sale of technical know how to an  Indian enterprise, a foreign air-liner touching an Indian airport and booking cargo or  passengers, etc. various tax issues arise on accounts of such activities. The government wants  to encourage foreign enterprises to engage in certain types of business activities in India,  which in its opinion its desirable for achieving a balanced economic growth. This takes us to  the last aspect of activities which enjoy tax incentives in India. The related issues about the  taxation of the Multinational Corporations (MNCs) are as follows: 1. Taxation of Transactions and Operations of MNCs in India Taxation of transactions and operations of MNCs fully depends on the definition Continue reading
Direct and Indirect Taxes
Taxes are classified as direct tax and indirect tax. But the meaning of these two types of taxes is not clear. For a long time economists interpreted these two types in different ways. For instance, one group of economists considered taxes on production as direct taxes and those on consumption as indirect taxes.  J.S. Mill distinguished these two types of taxes in terms of the ability to shift the tax. Any person on whom the tax is imposed, if he himself pays the tax, it is called direct tax and if he is able to shift the tax to somebody who ultimately pays it then it is called indirect tax. For example, income tax is paid by a person as it is levied on the income earned by him, so it is a direct tax. On the other hand the sales tax imposed on the seller is shifted to the Continue reading
Overview of Tax Regime in India
DIRECT TAXES Individual Income Tax & Corporate Tax The provisions relating to income tax are contained in the Income Tax Act 1961 and the Income Tax Rules 1962. The Income Tax Department is governed by the Central Board for Direct Taxes (CBDT) which is part of the Department of Revenue under the Ministry of Finance. In terms of the Income Tax Act, 1961, a tax on income is levied on individuals, corporations and body of persons. Tax rates are prescribed by the government in the Finance Act, popularly known as Budget, every year. The Government of India has recently taken initiatives to reform and simplify the language and structure of the direct tax laws into a single legislation – the Direct Taxes Code (DTC). After public consultation the Direct Taxes Code 2010 was placed before the Indian Parliament on 30 August 2010, when passed DTC will replace the Income Tax Continue reading
Goods and Services Tax (GST) in India
Goods and Services Tax (GST) is part of the proposed tax reforms that centre round evolving an efficient consumption tax system in the country. Presently, there are parallel systems of indirect taxation at the central and state levels. In the Union Budget for the year 2006-2007, Finance Minister proposed that India should move towards national level Goods and Services Tax that should be shared between the Centre and the States. He proposed to set April 1, 2010 as the date for introducing the goods and service tax (GST). Goods and Services Tax is proposed to be an indirect tax levied on manufacture, sale and consumption of goods and services at a national level concurrently by Central and State Governments. This Integration of goods and services taxation would end the distortions of differential taxation treatments of manufacturing and service sector. The Central and State governments both charge a multitude of indirect Continue reading
Income from Other Sources
Income from other source is a residuary head of income. Any item of income which does not fall under any other four specific heads of income is to be charged under this head. According to sec 56(2) following incomes are chargeable under this head. Dividend declared by a foreign company Family pension Winnings from lottery, crossword puzzles, horse race etc Income from plant, machinery or furniture let out on hire where it is not the actual business of the assessee. Interest from securities, bank deposits Income from sub letting Any other receipts which doesn’t fall under any other heads of income. Income from agricultural land situated outside India Examiner ship fees received by college teachers Income from undisclosed source Ground rent etc Receipts without consideration in certain cases Dividend It means any amount paid by a company, out of divisible profits, whether taxable or not taxable, to its share holders Continue reading