Tax & Accounting

Service Tax for Internet Based Services in India from December 2016

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By Koushan Das

Overseas companies providing online information and database access (‘OIDAR’) services will have to pay service tax from December 1, 2016, making electronic services potentially costlier for consumers. The Central Board of Excise and Customs (CBEC) defines OIDAR to include services delivered via information technology (over the internet or an electronic network), which is essentially automated involving minimal human intervention.

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Lower Income Tax on Digital Turnover for Small Businesses in India

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By Melissa Cyrill

Responding to the challenges arising from the demonetization of high value currency, the government has been keenly promoting digital financial literacy across the country. In fact, a new mantra has emerged towards the development of a cashless economy. Towards this, several new initiatives have been unveiled including widespread campaigns to spread the adoption of digital payment mechanisms, such as the ‘Digi Dhan Abhiyan’ by the Ministry of Electronics and IT (MeitY). Through the Digi Dhan Abhiyan over 55,000 merchants have begun offering digital payment options to rural customers, and more than 2.5 million people in rural areas (districts and blocks) have started using digital modes of payments. Moreover, upon new RBI regulations, Paytm has begun allowing its “registered” merchant customers to transfer US$ 737 (Rs 50,000) to their bank accounts; the maximum limit was US$ 368 (Rs 25,000) earlier.

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Tax Planning for NRIs Returning to India

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By Tracie Sloop Frost

Editor’s Note: This article was first published on July 29, 2015 and has been updated to accommodate regulations.

The decision to return permanently to India is a serious matter for many Indians living abroad. Not only does this decision involve questions of familial and social benefits, health considerations, and nostalgia for home, it also requires careful financial planning and preparation. In this article, we examine some of the most common areas of financial planning for returning Non-Resident Indians (NRIs).

In general, investment and tax provisions relating to NRIs returning to live in India are fairly generous. However, NRIs should carefully plan their return to India to ensure there are no surprises with respect to managing their overseas income and investments.

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The Applicability and Calculation of Gratuity in India

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By Dezan Shira & Associates

Editor’s Note: This article was originally published on June 4, 2013, and has been updated as of November 23, 2016, to include the latest gratuity regulations.

Gratuity is a lump sum that a company pays when an employee leaves an organization, and is one of the many retirement benefits offered by a company to an employee.

In India, the basic requirements for gratuity are set out under the Payment of Gratuity Act 1971. An employer may also choose to pay gratuity outside of that which is required by this Act.

In this article, we discuss gratuity in terms of:

  • Applicability;
  • Calculation;
  • Tax exemption;
  • Payment; and
  • Forfeiture.

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Simplifying Personal Tax Filing in India – Digital Solutions and New Initiatives by the Government

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By Melissa Cyrill

India’s Central Board of Taxes (CBDT) is gradually unveiling a slew of initiatives that seek to expand the country’s taxpayer base by increasing institutional transparency and easing assessment and payment process for taxpayers. Mostly in the form of digital solutions, the CBDT aims to revamp the country’s laggard tax administration infrastructure by implementing an efficient paperless system and simplifying the existing communication interface.

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Taxation of Job Work under the Model GST Law

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By Dezan Shira & Associates
Editor: Melissa Cyrill

The upcoming Goods and Services Tax (GST) is a landmark reform consolidating India’s indirect taxes. It will also widen the tax ambit by covering those potential taxpayers who were hitherto not under the tax net either due to the nature of their activity not being taxable or due to exemption claims. One such category will be the expanded taxation scope for job workers.

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Tax, Accounting, and Audit in India 2016-2017: New Publication from India Briefing

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India Tax Guide cover

Tax, Accounting, and Audit in India 2016-2017, the latest publication from India Briefing, is out now and available to subscribers as a complimentary download in the Asia Briefing Bookstore. The publication is designed to introduce the fundamentals of the tax regime as well as the critical accounting and auditing practices in India. As such, this comprehensive guide is ideal for not only businesses looking to enter the Indian market, but also for companies who already have a presence here and want to stay up-to-date with the most recent and relevant policy changes.

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Goods and Services Tax – A Paradigm Shift in Indian Taxation

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By Rahul Grover, Associate, Corporate Accounting Services, Dezan Shira & Associates

The Indian system of taxation of goods and services is characterized by cascading, distortionary tax on production of goods and services which leads to misallocation of resources, hampered productivity, and slower economic growth. To remove this hurdle, the Goods and Service (GST) Tax had been proposed. Finally, after a decade since its first proposal, the Constitutional Amendment Bill (to implement the GST) was passed in the upper house of parliament on August 3, 2016. The government is now committed to rolling out the GST by April 1, 2017.

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