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Tag Archives: India Tax
Individual Income Tax Rates and Deductions in India
Apr. 23 – Individual income tax (IIT) is the direct tax paid on personal income by an individual or a company to the central government. The Indian Income Tax department is governed by the Central Board for Direct Taxes (CBDT) and is part of the Department of Revenue under the Ministry of Finance. In this article, we discuss income source and residency, income tax payment, the definition of salary, income tax rates and tax deductions at source. Income Source and Residency Personal taxation in India depends on the income source and a person’s residential status, which is determined by the
Income Taxation for an Off-Shore Fund
By Himanshu Joshi, Accounts Associate, Dezan Shira & Associates Apr. 16 – In India, the Income Tax Act, 1961, provides special treatment for the taxation of the income of an off-shore fund. An off-shore fund is classified as a fund, institution, association or body, whether incorporated or not, established under the laws of a country outside India, which has entered into an arrangement for investment in India with any public sector bank, public financial institution, or mutual fund in an arrangement approved by the Securities and Exchange Board of India (SEBI). Special tax rates are applicable on the following kinds
Posted in Business, Finance, Tax and Accounting
Tagged Income Tax, India Tax, Off-shore funds
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How are Capital Gains on Shares Taxed in India?
By Himanshu Joshi, Accounts Associate, Dezan Shira & Associates Apr. 4 – The Income Tax Act of India recognizes shares as capital assets. Therefore, any gains derived from the sale of shares are treated as capital gains, which are taxable. To determine the effective tax rate on capital gains derived from the sale of shares, we first need to determine whether the gain is considered a long term capital gain (LTCG) or a short term capital gain (STCG). Specifically, if a share is held for one year or less, any gains are considered STCG; if a share is held for
India Increases Customs Duties on Luxury Items
The Indian government has made some key changes in its 2013 Budget that will primarily affect the super-rich, with customs duties on imported luxury items, including high-end motor vehicles, motorcycles, yachts and other similar vehicles, being increased. Continue reading
Posted in Business, Finance, Tax and Accounting, Regulatory Update
Tagged India Tax, Luxury Items
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Service Tax in India
By Himanshu Joshi, Accounts Associate, Dezan Shira & Associates Mar. 27 – Service taxes were first introduced to India through the Finance Act (1994) in the 1994-95 Union Budget, however the service tax rules have gone through various changes since their introduction. There was previously an exhaustive list of services that were subject to service tax, but since the 2012-13 Union Budget, a new concept has been introduced. Services of all kinds are now subject to a service tax, and only those that are mentioned in the “Negative List” and those specifically noted by the government of India are exempted from
India’s Double Taxation Avoidance Agreements
Mar. 26 – Double taxation avoidance agreements (DTAs or DTAAs) aim to prevent the same income from being taxed by two or more states, while also eliminating tax evasion and encouraging cross-border trade efficiency. DTAs prevent double taxation by allowing the tax paid in one of the two countries to be offset against tax payable in the other country, and/or by providing exemptions or reduced tax rates for specific income types such as interest, royalties, dividends. In India, withholding tax on dividends is 0 percent per the Tax Act, but DTAs serve to reduce interest and royalty rates. The table
Dividend Distribution Tax in India
By Himanshu Joshi, Accounts Associate, Dezan Shira & Associates Mar. 14 – The provisions of Dividend Distribution Tax (DDT) are contained in section 115-O of the Income Tax Act. A domestic company, in addition to the income tax payable on its total income, shall pay tax on income distributed, declared or paid to it by its subsidiaries as dividends. DDT is levied at a rate of 15 percent plus applicable surcharge and cess. It is charged on the total amount of dividends, whether such dividends are paid out of current profit or accumulated profit.
Posted in Finance, Tax and Accounting
Tagged Dividend Distribution Tax, Dividends, India Tax
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Tax Audit in India
By Himanshu Joshi, Accounts Associate, Dezan Shira & Associates Mar. 8 – When conducting business in India, it is imperative to understand exactly what you are getting into, what you need and what you owe. This article covers the legal provisions related to tax audits to help you conduct proper, and legal, business operations in India. The provisions for tax audits in India are covered under section 44AB of the Income Tax Act 1961. As per section this section, every person who falls under one of the categories listed below shall have their accounts audited by a practicing chartered accountant