Tax & Accounting

Filing GST Returns in India

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By Vasundhara Rastogi

GST Returns In India

The Goods and Services Tax (GST) will come into effect from July 1, 2017.

Under the new indirect tax system, every business and professional entity in India with an annual turnover exceeding US$31,054 (Rs 20 lakh), and US$15,527 (Rs 10 lakh) in the north-eastern states of India, will be required to obtain GST registration. 

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Indian Government Notifies New Safe Harbor Rules

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By Vasundhara Rastogi

On June 7, 2017, the Central Board of Direct Taxes (CBDT) in India revamped safe harbor rules to align safe harbor margins with industry standards and enlarge the scope of international transactions under it. ‘Safe harbor’ in tax parlance refers to the circumstances under which income-tax authorities accept the transfer price declared by the company, at which it transacts with its subsidiaries or an associated company, without any question.

The new safe harbor rules come into effect from April 1, 2017, and will continue to remain in force for two years, up to the assessment year (AY) 2019-2020. 

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Capital Gains Tax in India: An Explainer

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By Vasundhara Rastogi

In India, any profit or gain arising from the sale of a capital asset is deemed as capital gains and is charged to tax under the Income-tax Act, 1961.  According to the Act, a capital asset is any kind of property held by an individual, such as buildings, lands, bonds, equities, debentures, and jewelry. It excludes stock-in-trade, agricultural land, and certain specified bonds.  

Profits arising from the sale of capital assets is classified as Short-Term Capital Gains (STCG) or Long-Term Capital Gains (LTCG), depending on the period for which the capital asset has been held. 

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Direct Taxes in India Explained

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By Vasundhara Rastogi

In India, there are two types of taxes levied by the government: Direct taxes and indirect taxes. Indirect taxes are levies imposed on goods and services, whereas direct taxes are levied on the income and profits of individuals and organizations. Direct taxes are directly paid to the government by the tax payer.

Income tax is a direct tax, paid on personal income by an individual or a company, to the federal government.

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India’s GST Rates for Goods and Services Released ahead of July 1 Implementation

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By Dezan Shira & Associates

With the Goods and Services Tax (GST) set to be rolled out on July 1, the GST Council finally released its tax schedule for goods and services.

During the Council’s 14th session held from May 18 to 19, 1,211 goods and various service categories were fitted into the tax slabs – 5, 12, 18, and 28 percent.

In addition, the GST Council finalized the goods and services that will be exempted from paying GST.

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Calculating Expatriate Income Tax in India

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By Dezan Shira & Associates

Editor: Tracie Sloop Frost

In India, an individual’s income is taxed at graduated rates, depending on his/her residential status in India and income level. Non-employment income is taxed at a variable rate according to income type. In this article, we outline the rates and calculation methods for both income sources, and summarize common deductions and inclusions in income for expatriates working in India.

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Filing Income Tax Returns in India

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By Dezan Shira & Associates

An Income Tax Return (ITR) is a declaration that you have an income for which you have paid tax.  Filing of ITR is a mandatory obligation where you detail your income from salary and other sources, allowances and reliefs claimed, and investments made through the financial year (FY). ITRs have to be filed in the assessment year following the financial year during which income was earned.

Previously, one could file income tax returns for the previous two years; this has now been reduced to one year. Tax returns must be filed by the deadline of July 31, 2017, where income earned during FY 2016-17 will be accounted for.

In this article, we highlight the key steps necessary for filing tax returns in India.

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Income Tax Return Forms in India

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By Dezan Shira & Associates

Assessees who earn a taxable income must declare their total income earned by filing an income tax return form. Tax returns for a financial year must be filed by July 31 of the next financial year.

India’s Central Board of Direct Taxes (CBDT) has introduced new and simplified Income Tax Returns (ITR) forms for the financial year (FY) 2016-17 and assessment year (AY) 2017-18.

In its most recent update, the income tax department has inserted new columns in every ITR form seeking details on cash deposits made during the demonetisation window, i.e., from November 9, 2016 to December 30, 2016. Any such deposit needs to be reported only if it exceeds Rs 200,000 (US$3,100).

The CBDT has now made it compulsory for individuals and businesses to quote their Aadhaar number while filing tax returns.

Moreover, all income tax returns have to be filed electronically. Paper returns can only be filed by ‘super senior’ citizens (above 80 years of age) or by an individual whose income is less than Rs 500,000 (US$7,754) and who has not claimed any refund in his/her return.

The ITR forms notified for AY 2017-18, their applicability, and key changes are stated below:

ITR-1 (Sahaj)

The previous seven-page form is now replaced by a simplified one page form, called Sahaj, making it easier for taxpayers to file their annual income tax returns. 

ITR-1 Sahaj is to be used by salaried employees, individuals, and Hindu Undivided Family (HUF), who have income under the following heads, totalling up to Rs 50 lakh (US$77,000) and dividend income up to Rs 10 lakh (US$15,509):

  • Income from salary or pension;
  • Income from one house property; or
  • Income from other sources like interest income, etc. (excluding winning from lottery and income from race horses).

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