Tax & Accounting

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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GST – 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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India’s GST Bill – A Critical Evaluation

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By Siddhartha Thyagarajan & Kabir Narang 

The original blueprint of the Goods and Services Tax (GST) bill was first introduced in 2001. It aims to adopt a value added tax (VAT) model, and replace the current national-level central excise duty and state-level sales tax model. Heated debates in parliament has hindered the passage of the bill, which has been modified several times.

India’s current tax system is complex and multi-layered. Cross-border compliance, compounding of taxes on domestically produced goods and services, in addition to several central and state taxes, exacerbate the complexity of the system. This is why the government has realized the need for an efficient, transparent, and simple method of indirect taxation in the form of the GST bill. The bill indicates that the GST will be a tax on the final consumption or the actual supply of goods and services. The basic provision of the tax is that economic activity at each stage of production is taxed at the same rate, preventing further fragmentation. The GST will comprise of three main taxes: CGST (Central), SGST (State), and IGST (Inter-State). This article critically evaluates the bill. The first section looks at the benefits of the GST, the second section addresses the drawbacks of the GST, and the final section looks at how the GST will affect the landscape of the Indian economy.

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An Introduction to Doing Business in India 2016 – New Publication from Dezan Shira & Associates

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Doing Business in India 2016 CoverAn Introduction to Doing Business in India 2016, the latest publication from Dezan Shira & Associates, is out now and available to subscribers as a complimentary download in the Asia Briefing Bookstore

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India’s Tax Bodies Pledge Better Service, Expanded Reforms

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By Dezan Shira & Associates
Editor: Tracie Frost

For the first time, India’s Central Board of Direct Taxation (CBDT) and the Central Board of Excise and Customs (CBEC) met together for their annual conference of tax administrators.  The national conference aimed to give the two taxation bodies the opportunity to assess the performance of the previous year and deliberate on emerging issues.  Prime Minister Narendra Modi opened the inaugural session with remarks designed to reassure taxpayers and foreign investors alike. 

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