Beruflich Dokumente
Kultur Dokumente
Issue Date Apr 24, 2013 (Updated on July 10, 2013 & Feb 26, 2014)
Contents
A.
Residential Status
B.
C.
Sources of Income
D.
Salary
E.
Business Income
8-9
F.
Speculation Income
10
G.
Capital Gains
H.
Taxability of Gifts
I.
20-23
J.
24-25
K.
Clubbing of Income
26-27
L.
Withholding of Income
28-30
31-32
N.
33-36
O.
Disclaimer: The Income Tax rules and regulations may be subject to modifications by legislative, regulatory, administrative or judicial decisions. Investors
are advised to consult his/her financial advisor/consultant with respect to the specific tax implications arising out of his/her transactions. This presentation
is for reference only and is not to be construed as tax advice.
3-4
11-18
19
37
Private & Confidential . Refer
disclaimer at the end of the report
Residential Status
Required to be determined for each assessment year for determining the scope of total income.
Residential Status
The extent of an individuals liability for personal income tax depends on whether the individual is
resident and ordinarily resident,
resident but not ordinarily resident, or
non-resident in India
An individual is said to be resident in India in any previous year if he fulfills any one of the following two basic conditions:
Section 6 (1) Resident
He is in India in that previous year for a period or periods amounting in all to 182 days or more; or
He is in India for a period or periods amounting in all to 60 days or more during the previous year and 365 days or
more during the 4 years preceding that previous year
Non-Resident
If an individual does not satisfy both the basic conditions mentioned above, he shall be considered as a non-resident
In addition to fulfilling one of the above basic conditions, in case an individual fulfills any of the following additional
conditions, he will be treated as Not Ordinarily Resident in India in that previous year:
In case an individual fails to satisfy both the conditions for not ordinarily resident, he shall be considered as resident and
ordinarily resident.
Taxability of
1. Income received or deemed to be received in India
2. Income accruing or arising or deemed to accrue or arise in India
3. Income accruing or arising outside India fromi) Business controlled in India or profession set up in India
ii) Any other source
Non-resident
Taxable
Taxable
Taxable
Taxable
Taxable
Taxable
Taxable
Taxable
Taxable
Not Taxable
Not Taxable
Not Taxable
Disclaimer: The Income Tax rules and regulations may be subject to modifications by legislative, regulatory, administrative or judicial decisions. Investors
are advised to consult his/her financial advisor/consultant with respect to the specific tax implications arising out of his/her transactions. This presentation
is for reference only and is not to be construed as tax advice.
Residential Status
Particulars
Explanation
An individual,
who is a citizen of India,
leaving India in any year for employment purpose or
as a member of the crew of an Indian ship,
is
considered
as resident in India in that year only if he has been in India for 182 days or more.
Exceptions to Basic
conditions
Firm and AOP is considered as resident if the control and management is wholly or partly situated in India
If control & management is wholly situated outside India, such firm and AOP is considered as non-resident
Notes:
1. As per the Income Tax Act, 1961 a person shall be deemed to be of Indian origin if he or either of his parents or any of his grand parents was born in undivided India.
2. Under the Foreign Exchange (Deposit) Regulations, 2000, which deal with banking accounts in India by NRIs, the term PIO is defined as under
a) he at any time held an Indian Passport, or
b) he or either of his parents or any of his grandparents was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955, or
c) he is a spouse of an Indian citizen or a person referred to in (a) or (b) above
Disclaimer: The Income Tax rules and regulations may be subject to modifications by legislative, regulatory, administrative or judicial decisions. Investors
are advised to consult his/her financial advisor/consultant with respect to the specific tax implications arising out of his/her transactions. This presentation
is for reference only and is not to be construed as tax advice.
Rates of tax for Individuals, HUF, AOP, BOI and Artificial Juridical Person
Income
Rates of tax
NIL
10%
20%
30%
Notes:
1. The above mentioned basic exemption limit of Rs.200,000/- shall be
applicable to both men & women (resident & non-resident) below 60
years and, Rs.250,000/- in case of resident individuals who are 60 years
or more at any time during the previous year but below the age of 80
years.
Domestic
Co
Foreign
Co
30%
30%
40%
N.A
5%
2%
N.A
10%
5%
3%
3%
3%
Particulars
Disclaimer: The Income Tax rules and regulations may be subject to modifications by legislative, regulatory, administrative or judicial decisions. Investors
are advised to consult his/her financial advisor/consultant with respect to the specific tax implications arising out of his/her transactions. This presentation
is for reference only and is not to be construed as tax advice.
Sources of Income
Salary
Business (Non-speculation)
Income
Interest Income
Dividend Income
Rental Income
Disclaimer: The Income Tax rules and regulations may be subject to modifications by legislative, regulatory, administrative or judicial decisions. Investors
are advised to consult his/her financial advisor/consultant with respect to the specific tax implications arising out of his/her transactions. This presentation
is for reference only and is not to be construed as tax advice.
Particulars
Explanation
Salary includes any amount due to or received by an employee
including arrears of salary from an employer or former employer (Sec.15)
Definition of
salary
Computation
Particulars
Basic Salary
Add: Taxable allowance (after exemption u/s 10)
Add: Taxable perquisites u/s 17
Gross Salary
Less: Deduction u/s 16
Entertainment Allowance
Profession Tax
Taxable Salary
Taxable Year
Tax rates
Disclaimer: The Income Tax rules and regulations may be subject to modifications by legislative, regulatory, administrative or judicial decisions. Investors
are advised to consult his/her financial advisor/consultant with respect to the specific tax implications arising out of his/her transactions. This presentation
is for reference only and is not to be construed as tax advice.
Amount
xxx
xx
xx
xxx
xx
xx
xxx
Business Income
Particulars
Explanation
Profits and gains of business or profession carried on by the assessee (including deemed profits and income from
discontinued business) - Sec. 28, 41 and 176
Section 2 (13) defines "Business" to include any
Definition
trade,
commerce or
manufacture or
any adventure or concern in the nature of trade, commerce or manufacture
Taxable Year
Due basis or receipt basis depending on accounting method regularly followed by the assessee - Sec. 145
Tax rates
If gross sale value > 100 lakh, tax audit u/s 44AB is required
Disclaimer: The Income Tax rules and regulations may be subject to modifications by legislative, regulatory, administrative or judicial decisions. Investors
are advised to consult his/her financial advisor/consultant with respect to the specific tax implications arising out of his/her transactions. This presentation
is for reference only and is not to be construed as tax advice.
Particulars
Explanation
Commodity Derivatives
As per the Finance bill of March 2013, income from commodity derivatives would not be considered as speculative income and
introduced Commodities Transaction tax @ 0.01% on non-agri futures traded on the bourses
U/s 72, non-speculation business income can be set off against
any other business income &
Set off
Carry Forward
Any remaining balance (post set off) can be carried forward for next 8 assessment years to be set off only against non-speculation
business income
Computation
Particulars
Net Profit as per P/L Account
Add: i) Inadmissible expenses
ii) Income taxable but not credited to P/L Account
Less: i) Income credited but not taxable
ii) Allowable expenses & debited to P/L Account
Taxable Income
Amount
xxx
xx
xx
xxx
xx
xx
xxx
Disclaimer: The Income Tax rules and regulations may be subject to modifications by legislative, regulatory, administrative or judicial decisions. Investors
are advised to consult his/her financial advisor/consultant with respect to the specific tax implications arising out of his/her transactions. This presentation
is for reference only and is not to be construed as tax advice.
Speculation Income
Particulars
Explanation
A speculative transaction means a transaction in which a contract for purchase or sale of any commodity including stocks and shares
is periodically or ultimately settled otherwise than by actual delivery or transfer of the commodity or scrip. (Sec. 43(5))
Intra-day trading (in equity shares, currency and commodities) shall be considered as speculation business transaction and income
thereon is taxed at normal rates
Definition
10
Set off
U/s 73, speculation business loss cannot be set off against income from regular business or against income under any other head .
Hence, set off allowed only against speculation income.
Carry Forward
Carried forward & set off within 4 assessment years from the current assessment year, only against speculation income
Disclaimer: The Income Tax rules and regulations may be subject to modifications by legislative, regulatory, administrative or judicial decisions. Investors
are advised to consult his/her financial advisor/consultant with respect to the specific tax implications arising out of his/her transactions. This presentation
is for reference only and is not to be construed as tax advice.
Capital Gains
Particulars
Explanation
Definition
Under Section 2 (14) of the Income Tax Act, 1961, Capital asset means property of any kind held by an assessee, whether or not connected
with his business or profession, but does not include the following
Stock-in-trade, raw materials or consumable stores held for the purposes of business or profession.
Agricultural land in India which is not situated in any specified area
Personal effects of movable nature, such as furniture, utensils and vehicles held for personal use by the assessee or any dependent
member of his family.
Personal effects of movable nature do not include
Jewellery,
Archaelogical collections,
Drawings, Painting, Sculptures or any work of Art.
Taxable Year
If the capital asset is not a short term capital asset as defined then it is a long term capital asset
Set off
Short term capital loss can be set-off against short term or long term capital gains of that year & balance remaining can be set off against
income from any other head except salary.
Long term capital loss can be set-off only against long term capital gain.
Carry Forward
Short term capital loss can be carried forward for 8 assessment years u/s 74 to be set off against short term or long term capital gains only.
Long term capital loss can be carried forward for 8 assessment years u/s 74 to be set-off only against long term capital gain
Deduction under
Chapter VIA
11
Available for short term capital gain (other than stcg on securities taxable u/s 111A).
Not available against long term capital gains
Disclaimer: The Income Tax rules and regulations may be subject to modifications by legislative, regulatory, administrative or judicial decisions. Investors
are advised to consult his/her financial advisor/consultant with respect to the specific tax implications arising out of his/her transactions. This presentation
is for reference only and is not to be construed as tax advice.
Individual / HUF
Domestic Company
NRI
Individual / HUF
Domestic Company
NRI
Nil
Nil
Nil
15%
15%
15%
Real Estate
Note:
Debentures have to be listed to qualify for the 12 month holding period criteria of Long Term Capital gains.
Unlisted debentures require a holding period of 36 months for being a long term capital asset.
12
Disclaimer: The Income Tax rules and regulations may be subject to modifications by legislative, regulatory, administrative or judicial decisions. Investors
are advised to consult his/her financial advisor/consultant with respect to the specific tax implications arising out of his/her transactions. This presentation
is for reference only and is not to be construed as tax advice.
Surcharge @ 5% is to be levied in the case of domestic companies, if their income exceeds Rs. 1 crore but less than Rs. 10 crore & @ 10% if income exceeds Rs. 1 crore
Surcharge @ 10% is to be levied in the case of individual / HUF, if their income exceeds Rs. 1 crore
Dividend Stripping: The loss due to sale of units in equity mutual funds will not be available for set off to the extent of the taxfree dividend declared, if units are
i) bought within 3 months prior to the record date fixed for dividend declaration; and
ii) sold within 9 months after the record date fixed for dividend declaration
Bonus Stripping: The loss due to sale of original units in mutual fund schemes, where bonus units are issued, will not be available for set off to, if original units are
i) bought within 3 months prior to the record date fixed for allotment of bonus units; and
ii) sold within 9 months after the record date fixed for allotment of bonus units.
However, the amount of loss so ignored shall be deemed to be the cost of purchase or acquisition of such unsold bonus units.
13
Short term
capital gain
Long term
capital gain
Equity
15.45%
NIL
30.90%
20.60%
Debt Unlisted
units
30.90%
10.30%
Disclaimer: The Income Tax rules and regulations may be subject to modifications by legislative, regulatory, administrative or judicial decisions. Investors
are advised to consult his/her financial advisor/consultant with respect to the specific tax implications arising out of his/her transactions. This presentation
is for reference only and is not to be construed as tax advice.
14
Section
Assessee
Conditions
Quantum of Exemption
54
Individual,
HUF
54B
Individual
54EC
Any
Assessee
54F
Individual,
HUF
Disclaimer: The Income Tax rules and regulations may be subject to modifications by legislative, regulatory, administrative or judicial decisions. Investors
are advised to consult his/her financial advisor/consultant with respect to the specific tax implications arising out of his/her transactions. This presentation
is for reference only and is not to be construed as tax advice.
The deposit shall be made in a bank account or institution in a scheme notified by the Central government.
Amount deposited can be withdrawn for utilization in accordance with the scheme, for the specified purpose
If the amount deposited is not utilized for acquiring the new asset within the required period, the capital gain related to the unutilized
amount shall be treated as capital gain of the year in which period specified in the above provisions expires.
Cost Inflation Index
FY
15
CII
FY
CII
FY
CII
FY
CII
1981-82
100
1990-91
182
2000-01
406
2010-11
711
1982-83
109
1991-92
199
2001-02
426
2011-12
785
1983-84
116
1992-93
223
2002-03
447
2012-13
852
1984-85
125
1993-94
244
2003-04
463
2013-14
939
1985-86
133
1994-95
259
2004-05
480
1986-87
140
1995-96
281
2005-06
497
1987-88
150
1996-97
305
2006-07
519
1988-89
161
1997-98
331
2007-08
551
1989-90
172
1998-99
351
2008-09
582
1999-00
389
2009-10
632
Disclaimer: The Income Tax rules and regulations may be subject to modifications by legislative, regulatory, administrative or judicial decisions. Investors
are advised to consult his/her financial advisor/consultant with respect to the specific tax implications arising out of his/her transactions. This presentation
is for reference only and is not to be construed as tax advice.
Particulars
Explanation
In the case of block of assets, depreciation u/s 32 can be claimed on the WDV as per Sec 43 (6) provided as on the last day of
the previous year, the following two requirements are fulfilled:
Computation of Capital
Gains - Depreciable Asset
b) There must be some value for the block on which prescribed percentage can be applied
Where any one or both the above mentioned requirements are not satisfied on transfer of any asset from the block, the
provisions of Sec. 32 cease to apply & Sec. 50 provision become applicable resulting in short term capital gains
When one or some of the assets in the block is / are sold for a consideration which is more than the value of the block
When all the assets are transferred for a consideration which is more than the value of the block
When all the assets are transferred for a consideration which is less than the value of the block
In the first 2 situations above, the net result of the computation would result in short term capital gains, the excess of WDV
over the sale consideration in the third situation shall be treated as short term capital loss
Computation
Particulars
Full value of consideration
xxx
xx
xx
xx
16
Amount
xxx
Disclaimer: The Income Tax rules and regulations may be subject to modifications by legislative, regulatory, administrative or judicial decisions. Investors
are advised to consult his/her financial advisor/consultant with respect to the specific tax implications arising out of his/her transactions. This presentation
is for reference only and is not to be construed as tax advice.
Rates
Payable By
0.100%
Purchaser/Seller
Nil
Purchaser
0.001%
Seller
Sale of equity shares, units of equity oriented mutual fund (non-delivery based)
0.025%
Seller
0.017%
Seller
0.125%
Purchaser
0.010%
Seller
0.001%
Seller
17
Disclaimer: The Income Tax rules and regulations may be subject to modifications by legislative, regulatory, administrative or judicial decisions. Investors
are advised to consult his/her financial advisor/consultant with respect to the specific tax implications arising out of his/her transactions. This presentation
is for reference only and is not to be construed as tax advice.
Explanations
Intention at the time of purchase
Length of period of holding
Time devoted
Infrastructure & set up employed
Transaction frequency
Transaction volume
Purchase - sale ratio
Owned fund vs. Borrowed fund
Circumstances due to which asset is sold
Use of sale consideration
Any other occupation of the assessee
18
Disclaimer: The Income Tax rules and regulations may be subject to modifications by legislative, regulatory, administrative or judicial decisions. Investors
are advised to consult his/her financial advisor/consultant with respect to the specific tax implications arising out of his/her transactions. This presentation
is for reference only and is not to be construed as tax advice.
Taxability of Gifts
Particulars
Explanation
When is it taxable
Gifts received by an individual or Hindu Undivided Family (HUF) are taxable as per the Income Tax Act, 1961 but there are a few
exceptions as mentioned below. It is included under the head Income from other sources under Section 56(2)(viii)
Gifts are taxable in the hands of recipient and there is no taxation for the donor.
Any cash gift (including gifts by cheque or drafts) received, exceeding Rs. 50,000/Any movable property received without consideration or at a lesser consideration than its fair market value, the aggregate fair
value of which is more than Rs.50,000/Any immovable property received without consideration and its stamp duty value is more than Rs.50,000/Any immovable property received for a consideration which is less than the stamp duty value of the property by an amount
which is more than Rs. 50,000/-, the difference between the stamp duty value & the consideration shall be chargeable to tax
Frequency
In the case of immoveable property, a single transaction is considered for calculating the limit of Rs.50,000/In other cases , all transaction in a financial year will be considered for calculation of the ceiling limit of Rs. 50,000/-
Exempted Gifts
The following receipts/gifts are exempted even if they are without or inadequate consideration From any relative; or
On the occasion of marriage of an individual; or
Under a will or by way of inheritance; or
In contemplation of the death of the payer or donor, as the case may be; or
From a local authority; or
From any fund, foundation, university, other educational institution, hospital, medical institution, any trust or institution
referred to in Section 10 (23C)
Note:
Relative means spouse, brother or sister of assessee or spouse, brother or sister of either of the parents, any lineal ascendant or descendant of the assessee or spouse.
Property means immoveable property being land or building or both; shares & securities; jewellery; archeological collections; drawing, paintings, sculptures; any work of
art and bullion.
19
Disclaimer: The Income Tax rules and regulations may be subject to modifications by legislative, regulatory, administrative or judicial decisions. Investors
are advised to consult his/her financial advisor/consultant with respect to the specific tax implications arising out of his/her transactions. This presentation
is for reference only and is not to be construed as tax advice.
Particulars
Explanation
Income from other sources is a residuary head of income. Any item which is chargeable to tax but does not fall with the scope
of the other four specific heads of income shall be included under this head of income.
Certain items of income which are specifically chargeable only under this head of income under section 56, are as follows:
Dividend income (including deemed divided un/s. 2(22)(e))
Income through winnings from lotteries, races including horse races, gambling, betting, etc.
Any sum of money, the aggregate value of which exceeds Rs. 50,000, received from any person without consideration by an
individual or HUF during the year
Any movable property, the aggregate value of which exceeds Rs. 50,000, received from any person without consideration,
or for inadequate consideration where such inadequacy exceeds Rs. 50,000, by an individual or HUF during the year
Definition
Where an immovable property, stamp duty value of which exceeds Rs. 50,000, received by an individual or HUF from any
person without consideration, the stamp duty value of such property will be considered.
Any immovable property received for a consideration which is less than the stamp duty value of the property by an amount
exceeding Rs. 50,000/-, the difference between the stamp duty value & the consideration will be considered.
Where a firm or closely held company receives shares of a closely held company from any person or persons, without
consideration where the aggregate fair market value exceeds Rs. 50,000 or for inadequate consideration where the
inadequacy in aggregate exceeds Rs. 50,000
Income from subletting
Interest Income
Family Pension
20
When is it taxable
Due basis or receipt basis depending on the method of accounting regularly followed by the assessee
Set off
Income from other sources can be set off against non-speculation business loss, house property loss and short term capital loss
of the current year except loss from activity of owning & maintaining race horses u/s 74
Carry Forward
Tax Rates
Disclaimer: The Income Tax rules and regulations may be subject to modifications by legislative, regulatory, administrative or judicial decisions. Investors
are advised to consult his/her financial advisor/consultant with respect to the specific tax implications arising out of his/her transactions. This presentation
is for reference only and is not to be construed as tax advice.
Particulars
Explanation
Taxablility does not arise in the hands of individual/HUF in case such sum of money, specified movable/immovable property is received
From any relative; or
On the occasion of marriage of an individual; or
Exemptions from
taxability of gifts
In contemplation of the death of the payer or donor, as the case may be; or
From a local authority; or
From any fund, foundation, university, other educational institution, hospital, medical institution, any trust or institution referred to in
Section 10 (23C)
From charitable institution registered u/s 12AA.
Computation
Particulars
Gross Receipts
Less: Exemption u/s 10
Amount
xxx
xx
xxx
21
xx
xxx
Disclaimer: The Income Tax rules and regulations may be subject to modifications by legislative, regulatory, administrative or judicial decisions. Investors
are advised to consult his/her financial advisor/consultant with respect to the specific tax implications arising out of his/her transactions. This presentation
is for reference only and is not to be construed as tax advice.
Tax on Dividend
Individual
Dividends received from domestic company / MF
Dividends from foreign company
Domestic Company
NRI
Note:
Dividend received by an Indian company from its foreign subsidiary (minimum 26% share holding) are subject to tax @ 15% plus 10% surcharge and 3% cess.
Individual
on Companies
Domestic Company
15% + 10% surcharge + 3% cess = 17.00%
22
NRI
Nil
Disclaimer: The Income Tax rules and regulations may be subject to modifications by legislative, regulatory, administrative or judicial decisions. Investors
are advised to consult his/her financial advisor/consultant with respect to the specific tax implications arising out of his/her transactions. This presentation
is for reference only and is not to be construed as tax advice.
Particulars
Interest from foreign company
Interest on Bonds/NCD from domestic company
Individual
Domestic Company
NRI
Local taxation applies
TDS Rates
Source of Income
23
Exemption
TDS
Disclaimer: The Income Tax rules and regulations may be subject to modifications by legislative, regulatory, administrative or judicial decisions. Investors
are advised to consult his/her financial advisor/consultant with respect to the specific tax implications arising out of his/her transactions. This presentation
is for reference only and is not to be construed as tax advice.
Particulars
Explanation
Computation
Defination
Particulars
Income not
taxable
Annual value of any building or portion of a building occupied by the assessee for
the purposes of business or profession carried on by him
Gross Annual Value (GAV) is fair rent or municpal valuation whichever is higher,
maximum subject to standard rent.
What is Gross
Annual Value
xxx
If actual rent < fair rent because of vacancy, then actual rent is taken as GAV,
otherwise fair rent is taken as GAV
xx
Let-out property
xxx
Add: 70% of arrears of rent received u/s
25B
xx
xx
Taxable Income
24
xx
If more than 1 properties are self-occupied & not leased, any one house
property can be chosen as self-occupied & the remaining are treated as
"deemed let-out properties.
Deductions
xxx
If actual rent > fair rent, then actual rent is taken as GAV
Self-occupied property
Types of House
property
Amount
Disclaimer: The Income Tax rules and regulations may be subject to modifications by legislative, regulatory, administrative or judicial decisions. Investors
are advised to consult his/her financial advisor/consultant with respect to the specific tax implications arising out of his/her transactions. This presentation
is for reference only and is not to be construed as tax advice.
xxx
Particulars
Explanation
Loss from house property can be set off against
Set off
Carry Forward
25
Any balance house property loss remaining, is allowed to be carried forward &
set off within the next 8 assessment years, only against income from house
property u/s 71B
Disclaimer: The Income Tax rules and regulations may be subject to modifications by legislative, regulatory, administrative or judicial decisions. Investors
are advised to consult his/her financial advisor/consultant with respect to the specific tax implications arising out of his/her transactions. This presentation
is for reference only and is not to be construed as tax advice.
Clubbing of Income
Particulars
Explanation
When income of other persons is included in the total income of the assessee, it is known as clubbing of income
Definition
Treatment
Clubbed income is taxable under the head "Income from other sources" and is subject to normal slab rates
if income is transferred but asset is not transferred (Sec. 60)
assets transferred before marriage & assets transferred in consideration of agreement to leave apart
asset transferred for adequate consideration i.e. a genuine sale
if a karta transfers a co-parcenary property
applies only to original assets & not to the accretion to the asset (eg. Bonus shares)
if asset is transferred by an individual to son's wife without adequate consideration (Sec.64(1)(vi))
if asset is transferred by an individual to anybody without adequate consideration but the benefit goes to the spouse of
transferor (Sec.64(1)(vii))
26
if remuneration to the spouse of an individual given by an organisation in which such individual has a substantial interest
(Sec. 64 (1)(ii))
Disclaimer: The Income Tax rules and regulations may be subject to modifications by legislative, regulatory, administrative or judicial decisions. Investors
are advised to consult his/her financial advisor/consultant with respect to the specific tax implications arising out of his/her transactions. This presentation
is for reference only and is not to be construed as tax advice.
Clubbing of Income
Particulars
Explanation
If an individual gifts a self acquired property to HUF of which he/she is a member, clubbing applies as follows (Sec. 64(2))
Income from the property is clubbed with the income of the transferor
Income from the property which goes to the benefit of spouse or minor child is clubbed with income of that individual
if income is earned on account of any activity involving application of his knowledge or manual labour
if parents are not divorced, then income is clubbed with income of that parent, whose income is greater
if parents are divorced, then income is clubbed with income of that parent who maintains the minor
exemption of Rs.1500 per year per minor is available for the parent's income in which minor's income is clubbed
27
Disclaimer: The Income Tax rules and regulations may be subject to modifications by legislative, regulatory, administrative or judicial decisions. Investors
are advised to consult his/her financial advisor/consultant with respect to the specific tax implications arising out of his/her transactions. This presentation
is for reference only and is not to be construed as tax advice.
Withholding Tax
Particulars
What is Withholding
Tax
Rate of Withholding
tax
Explanation
It is an obligation on the payer to withhold tax at the time of making payment under certain heads such as rent, commission, salary,
professional services, contract, etc. at the specified tax rates
As per Sec.195 of the Income Tax Act, there is an obligation on the person responsible for payment to deduct tax at source at the
time of payment or, at the time of the credit of the income to the account of the non-resident
Tax is to be deducted at the rate prescribed in the Act or rate specified in the Double Taxation Avoidance Agreement (DTAA)
whichever is beneficial to the assessee.
Current rates for withholding tax for payment to non-residents are
Interest - 5%
Dividends paid by domestic companies - nil
Royalties - 10%
Technical services - 10%
Any other service
Individuals: 30% of the income
Companies: 40% of the income
The above rates are general & are applicable in respect of countries with which India does not have a DTAA
Provisions in the
Finance Bill 2013-14
28
A final withholding tax at the rate of 20% on profits distributed by unlisted companies to shareholders through buyback of shares.
Proposal to increase the rate of tax on payments by way of royalty and fees for technical services to non-residents from 10% to 25%
Disclaimer: The Income Tax rules and regulations may be subject to modifications by legislative, regulatory, administrative or judicial decisions. Investors
are advised to consult his/her financial advisor/consultant with respect to the specific tax implications arising out of his/her transactions. This presentation
is for reference only and is not to be construed as tax advice.
Withholding Tax
Tax rates in case of some countries with which India has double taxation avoidance agreements
Country
Interest
Royalty
Australia
15%
15%
Note 2
Note 2
Canada
15% (Note 1)
10-20%
10-20%
Mauritius
20 % (Note 1)
15%
No separate provision
Singapore
United Arab
Republic
10%
20%
30%
No separate provision
United Kingdom
15%
(Note 3)
(Note 3)
(Note 3)
(Note 3)
United States
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Disclaimer: The Income Tax rules and regulations may be subject to modifications by legislative, regulatory, administrative or judicial decisions. Investors
are advised to consult his/her financial advisor/consultant with respect to the specific tax implications arising out of his/her transactions. This presentation
is for reference only and is not to be construed as tax advice.
Withholding Tax
Note
1. Dividend / Interest earned by the government and certain institutions like Reserve Bank of India is exempt from taxation in the country of source.
2. Royalties and fees for technical services would be taxable in the country of source at the following rates :
a) 10 per cent in case of rental of equipment and services provided along with know-how and technical services ;
b) any other case
during first five years of the agreement
i. 15 per cent if the payer is Government or specified organization;
ii. 20 per cent in other cases;
30
Disclaimer: The Income Tax rules and regulations may be subject to modifications by legislative, regulatory, administrative or judicial decisions. Investors
are advised to consult his/her financial advisor/consultant with respect to the specific tax implications arising out of his/her transactions. This presentation
is for reference only and is not to be construed as tax advice.
Explanation
A Limited Liability Partnership, popularly known as LLP combines the advantages of both the Company and Partnership into a single form of
organization.
Unlike corporate shareholders, the partners have the right to manage the business directly.
What is LLP
An LLP also limits the personal liability of a partner for the errors, omissions, incompetence, or negligence of the LLP's employees or other
agents.
LLP has a separate legal entity, liable to the full extent of its assets, the liability of the partners would be limited to their agreed contribution
in the LLP.
No partner would be liable on account of the independent or unauthorized actions of other partners, thus allowing individual partners to be
shielded from joint liability created by another partners wrongful business decisions or misconduct.
Highlights
LLPs will be treated as Partnership Firms for the purpose of Income Tax w.e.f assessment year 2010-11
LLP resident in India even if control & management of its affairs is partly in India
No surcharge will be levied on income tax.
Profit will be taxed in the hands of the LLP and not in the hands of the partners (Sec 10 (2A)).
Remuneration to partners is a deductible expenditure for LLP subject to certain limits
Interest on capital contribution - deductible expenditure provided it is authorised by the LLP agreement
Interest & remuneration received by a partner from his LLP will be taxed as Profits & Gains of Business u/s 28(v)
No capital gain on conversion of partnership firms into LLP.
Capital Gain on conversion of Company into LLP will be exempt from tax, if prescribed conditions are complied with.
On conversion, the successor LLP , will be allowed to carry forward and set off of accumulated loss and unabsorbed depreciation allowance
& take the credit of MAT paid by the predecessor company
Professionals can form Multi-disciplinary Professional LLP, which was not allowed earlier.
Audit requirement only in case of contributions exceeding Rs. 25 lakh or turnover exceeding Rs. 40 lakh.
31
Disclaimer: The Income Tax rules and regulations may be subject to modifications by legislative, regulatory, administrative or judicial decisions. Investors
are advised to consult his/her financial advisor/consultant with respect to the specific tax implications arising out of his/her transactions. This presentation
is for reference only and is not to be construed as tax advice.
Particulars
Explanation
30% flat tax rate + 3% education cess
Tax rate
Limits on
Remuneration
to Partners
32
No Minimum Alternate Tax & Dividend Distribution Tax. Alternate Minimum Tax @ 19.06% (18.5% plus 3% cess) is applicable on the book
profits.
On first Rs. 300,000 of book profit or in case of loss Rs.150,000 or at the rate of 90% of book profit, whichever is more
On the balance of book profit at the rate of 60%
Disclaimer: The Income Tax rules and regulations may be subject to modifications by legislative, regulatory, administrative or judicial decisions. Investors
are advised to consult his/her financial advisor/consultant with respect to the specific tax implications arising out of his/her transactions. This presentation
is for reference only and is not to be construed as tax advice.
Features
Type of account
Currency
Tenure of Deposits
Repatriability
Purpose of Account
Joint Holding
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NRE
NRO
FCNR
INR
INR
1yr- 5 yrs
Freely Repatriable
Freely Repatriable
Tax free
Tax free
To deposit
Traveler's cheques
Traveler's cheques
Foreign currency
Foreign currency
Proceeds of repatriable
investments
Disclaimer: The Income Tax rules and regulations may be subject to modifications by legislative, regulatory, administrative or judicial decisions. Investors
are advised to consult his/her financial advisor/consultant with respect to the specific tax implications arising out of his/her transactions. This presentation
is for reference only and is not to be construed as tax advice.
NRE
Operations thru PoA is restricted to
withdrawals for permissible local
payments or remittance to the account
holder himself through normal banking
channels.
NRO
FCNR
b. Abroad
i) to the Account
holder
Permitted
Not Permitted
Permitted
34
Permitted
Disclaimer: The Income Tax rules and regulations may be subject to modifications by legislative, regulatory, administrative or judicial decisions. Investors
are advised to consult his/her financial advisor/consultant with respect to the specific tax implications arising out of his/her transactions. This presentation
is for reference only and is not to be construed as tax advice.
Permitted
(Provided no funds are remitted back
to India and are used abroad only)
Features
NRE
NRO
FCNR
i) to the Account
holder
Not Permitted
Not Permitted
Not Permitted
Not Permitted
Not Permitted
c. Foreign Currency
Loans in India
Purpose of Loan
a. In India
i) to the Account
holder
35
Disclaimer: The Income Tax rules and regulations may be subject to modifications by legislative, regulatory, administrative or judicial decisions. Investors
are advised to consult his/her financial advisor/consultant with respect to the specific tax implications arising out of his/her transactions. This presentation
is for reference only and is not to be construed as tax advice.
Features
NRE
NRO
FCNR
Not permitted.
b. Abroad
To the account
holder and Third
Parties
*Note:
1. The loans cannot be utilised for the purpose of on-lending or for carrying on agriculture or plantation activities or for investment in real estate business.
2. Subject to usual norms as are applicable to resident accounts, for personal purposes or for carrying on business activities except for the purpose of relending
or carrying on agricultural / plantation activity or for investment in real estate business.
3. Subject to conditions such as
(i) the loans shall be utilised only for meeting borrower's personal requirements and/ or business purpose and not for carrying on agricultural/ plantation
activities or real estate business, or for relending,
(ii) Regulations relating to margin and rate of interest as stipulated by the Reserve Bank from time to time shall be complied with, and
(iii) The usual norms and considerations as applicable in the case of advances to trade/industry shall be applicable for such loans/ facilities
36
Disclaimer: The Income Tax rules and regulations may be subject to modifications by legislative, regulatory, administrative or judicial decisions. Investors
are advised to consult his/her financial advisor/consultant with respect to the specific tax implications arising out of his/her transactions. This presentation
is for reference only and is not to be construed as tax advice.
Trusts
Revocable
Irrevocable
37
Determinate
Either at trust or
at assessee level
Tax rate as per head of
income
Used for PE/AIF I
Disclaimer: The Income Tax rules and regulations may be subject to modifications by legislative, regulatory, administrative or judicial decisions. Investors
are advised to consult his/her financial advisor/consultant with respect to the specific tax implications arising out of his/her transactions. This presentation
is for reference only and is not to be construed as tax advice.
Indeterminate / Discretionary
Tax rate at peak
Used for AIF III
Disclaimer
Thank You
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views should not be construed as investment advice. All opinions and estimates included here constitute our view as of this time and are subject to change without notice. Statements made
herein regarding future prospects may not be realized. Any performance information shown refers to the past should not be seen as an indication or assurance of any future returns.
38
Disclaimer: The Income Tax rules and regulations may be subject to modifications by legislative, regulatory, administrative or judicial decisions. Investors
are advised to consult his/her financial advisor/consultant with respect to the specific tax implications arising out of his/her transactions. This presentation
is for reference only and is not to be construed as tax advice.