27-03-2014, 11:09 AM
TAX Guidelines
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FEDERAL TAXES AND LEVIES
The Indian tax year is a financial year from 1 April to 31 March.
The amount of tax payable is computed after reckoning income tax at prescribed rates and Surcharge (SC) computed on income tax at 5% (2% for non-Indian companies) for companies having income over Rs 10m.
The aggregate of income tax and SC (wherever applicable) is further increased by 3% (2% Education CESS(EC) and 1% Secondary and Higher Education CESS (SHEC)).
TAXES PAYABLE
FEDERAL TAXES AND LEVIES
The Indian tax year is a financial year from 1 April to 31 March.
The amount of tax payable is computed after reckoning income tax at prescribed rates and Surcharge (SC) computed on income tax at 5% (2% for non-Indian companies) for companies having income over Rs 10m.
The aggregate of income tax and SC (wherever applicable) is further increased by 3% (2% Education CESS(EC) and 1% Secondary and Higher Education CESS (SHEC))
SECURITIES TRANSACTION TAX
Securities transaction tax (STT) is applicable to the purchase or sale of equity shares, derivatives, units of equity-oriented funds through a recognized stock exchange or the sale of a unit of an equity-oriented fund to a mutual fund.
CAPITAL GAINS TAX
Gains arising from transfer of a long-term capital asset, i.e. assets held for a period of more than three years (one year in case of shares/securities of companies/mutual funds listed on a recognized stock exchange in India) are regarded as long-term capital gains. Long-term capital gains are computed by deducting the cost of the capital asset and expenses of transfer (adjusted for inflation as per the prescribed factors) from the sale value of the asset.
OTHER TAXES
EXCISE DUTY OR CENTRAL VALUE ADDED TAX (CENVAT) CENVAT is payable on the manufacture of goods in India. CENVAT is generally applicable on an ad valorem basis at the prescribed rates on the ‘transaction value’ Of the goods.
SERVICE TAX: Service Tax is levied at 10.3% of the value of various categories of services (presently more than 100 services are covered). Generally, the liability to pay service tax is on the service provider. However, in certain services (such as when the service provider is outside India and the recipient is a business in India), the tax liability falls on the recipient of the service.