Service tax - Budget 11

► No change in the effective service tax rate of 10.3%.

► Service tax extended to services by air conditioned
restaurants having liquor license and to short term
accommodation in hotels.

► Scope of seven existing service categories expanded,
including life insurance service, legal service, health
service and commercial training and coaching service.

► Interest for delayed payment of service tax increased to
18% a year and penalty provisions amended.

► Restrictions on Cenvat credit on input services prescribed
in the case of works contractors (availing composition
scheme).

► Outright service tax exemption for input services “wholly
consumed” in a SEZ, linked with Export Rules.

► Point of Taxation Rules, 2011 introduced, deeming the
time of provision of service to be the date of provision of
service or date of invoice or date of payment, whichever
is earlier.

► Performance based criteria for determining export of
“credit rating agency services”, “market research agency
services”, “technical testing and analysis services” and
“transport of goods by air/ road/ rail services” changed
to “location of recipient of service”.

► Definition of “input service” for Cenvat credit purposes
substituted. Services provided for construction of
building or civil structure, outdoor catering, life/ health
insurance services not to be considered as input service.

► “Exempted services” to include trading. For the purposes
of availment of pro rata Cenvat credit, value of trading
will be the difference between sale price and purchase
price of the goods traded.

► Banking companies or financial institutions obligated to
pay an amount equal to 50% of Cenvat credit availed. For services related to life insurance or management of ULIP,such amount to be equal to 20% of credit availed.

► Provision relating to availability of full Cenvat credit on
specified services under Rule 6(5) of Cenvat Credit Rules
deleted.

Excise duty - Budget-11

► Peak rate of duty maintained at 10%. Basic duty rate
increased from 4% to 5% to align with state VAT rates.

► AED under AED (GSI) removed on sugar, textile and
textile products to enable states to levy VAT.

► Duty of 1% (without input Cenvat) imposed on 130 items,
which were earlier exempted. For specified items, option
provided to avail credit and discharge duty at 5%.

► Exemption to packaged or canned software (from value
that represents transfer of right to use) provided to cover
supplies made other than under MRP assessment.

► Interest rate for delayed payment of duty increased from
13% to 18% with effect from 1 April 2011 and penalty
provisions amended.

► Input and input services redefined to exclude specified
goods and services. Exempted services to include trading
“trading” for the purposes of computing credit reversal.

► Definition of capital goods amended to include goods
used outside the factory for generation of electricity for
captive use.

►Rule 6(5) of Credit Rules which specified input services
for full Cenvat credit availability (unless used exclusively
for exempted operations), deleted.

Income-tax - Budget-2011

► Basic exemption limit for individuals increased to
INR 180,000 (for resident women below the age of 60
years exemption limit retained at INR 190,000).

► Age limit for qualifying as senior citizen reduced from 65
years to 60 years and basic exemption limit increased to
INR 250,000.

► Basic exemption limit of INR 500,000 applicable for
senior citizens of the age of 80 years or more.

► Surcharge on domestic companies reduced from 7.5% to
5%.

► Surcharge on foreign companies reduced from 2.5% to
2%.

► Basic rates of corporate tax remain unchanged for both
domestic and foreign companies.

► Activities in the nature of trade, commerce or business or
any related activities, pursued for advancement of object
of general public utility is “charitable purpose”, if annual
receipts from such activities do not exceed
INR 2.5 million (previous limit INR 1 million).

► Specified allowances and perquisites of Chairman and
Members of the UPSC are exempted.

► Exemption provided to specified income of a notified
body or authority or trust or board or commission set up
for regulating or administering an activity for the benefit
of general public, provided it is not engaged in any
commercial activity.

► Weighted deduction for contributions made to national
laboratory or a university or IIT or a specified person for
scientific research, increased to 200%.

► Investment linked tax deduction extended to taxpayers
engaged in developing and building affordable housing
projects under a scheme framed by the Central
Government or a State Government or in production of
fertilizers in India.

► Contribution made by an employer towards a notified
pension scheme allowed as a deduction (restricted to 10%
of the salary of employees).

► Tax holiday sunset clause for power sector extended to
31 March 2012.

► Tax holiday for undertakings engaged in commercial
production of mineral oil will not be available for blocks
licensed under a contract awarded after 31 March 2011.

► Deduction in addition to limit of INR 100,000 specified
under section 80CCE available to employees in respect of
contributions (upto 10% of salary) made to notified
pension scheme by the Government or any other
employer.

► MAT rate increased from 18% to 18.5% of book profit
(plus applicable surcharge and education cess).

► Income of SEZ developers and units will be subject to
MAT.

► Dividends declared by SEZ developers will be subject to
DDT.

► Introduction of AMT for LLPs at 18.5% (plus education
cess) of the adjusted total income. AMT credit allowed to
be carried forward and set off against future income-tax
liability for a period of ten years.

► Due date for filing the return of income by a company
which is required to report its international transactions
in Form 3CEB is extended to 30 November.

► Notified class or classes of persons exempted from filing
the return of income.

► Time limit prescribed for completion of assessment and
reassessments (including search assessments) to exclude
time taken for obtaining information from foreign tax
authorities under agreement for exchange of information
or six months, whichever is less.

► For determining ALP of international transactions,
instead of a 5% variation, the allowable variation will now
be such percentage as may be notified by the
Government.

► TPOs granted power of conducting a survey.

► Transactions with persons located in a NJA brought
within the purview of TP provisions.

► Transactions with a person located in a NJA subject to
certain disallowance/ taxability and higher withholding
tax under certain circumstances.

► The limit for making application before Settlement
Commission is reduced from INR 5 million to INR 1 million
in certain cases.

► Settlement Commission empowered to rectify its order
passed pursuant to the application before it, within a
period of six months from the date of the order.

► Non residents having LOs in India required to file a
statement, giving details of the activities carried out by
the LO, within 60 days from the end of the financial year.

► Revenue authorities empowered to make enquiries and
investigate for collection of information on requests
received from the Revenue authorities outside India,
pursuant to a double taxation avoidance agreement
entered into between India and the respective country.

► Income from infrastructure debt funds notified by the
Central Government will be exempt.

► Interest received by non residents from notified
infrastructure debt funds taxable at 5% (plus applicable
surcharge and education cess).

► Rate of tax on income distributed by mutual funds (other
than equity oriented funds) to a person other than
individual or HUF, increased to 30% (plus applicable
surcharge and cess).

► Dividend received by an Indian company from subsidiary
foreign company will be taxed at the rate of 15% (plus
applicable surcharge and cess), on gross basis.

► Deletion of scheme of DIN for correspondence with tax
authorities.

New Income Tax Return Forms

http://www.incometaxindia.gov.in/download_all.asp

Clarifications regarding Form 24Q

1) Whether the particulars of the whole year or of the relevant quarter are to be filled in Annexures I, II and III of Form No. 24Q?

(i) In Annexure I, only the actual figures for the relevant quarter are to be reported.

(ii) In Annexures II & III, estimated/actual particulars for the whole financial year are to be given. However, Annexures II & III are optional in the return for the 1st, 2nd and 3rd quarters but in the quarterly statement for the last quarter, it is mandatory to file Annexures II & III giving actual particulars for the whole financial year.

2) In Form No. 24Q, should the particulars of even those employees be given whose income is below the threshold limit or in whose case, the income after giving deductions for savings etc. is below the threshold limit?

(i) Particulars of only those employees are to be reported from the 1st quarter onwards in Form No. 24Q in whose case the estimated income for the whole year is above the threshold limit.

(ii) In case the estimated income for the whole year of an employee after allowing deduction for various savings like PPF, GPF, NSC etc. comes below the taxable limit, his particulars need not be included in Form No. 24Q.

(iii) In case, due to some reason, estimated annual income of an employee exceeds the exemption limit during the course of the year, tax should be deducted in that quarter and his particulars reported in Form No. 24Q from that quarter onwards.


3)How are the particulars of those employees who are with the employer for a part of the year to be shown in Form No. 24Q?

(i) Where an employee has worked with a deductor for part of the financial year only, the deductor should deduct tax at source from his salary and report the same in the quarterly Form No. 24Q of the respective quarter(s) up to the date of employment with him. Further, while submitting Form No. 24Q for the last quarter, the deductor should include particulars of that employee in Annexures II & III irrespective of the fact that the employee was not under his employment on the last day of the year.

(ii) Similarly, where an employee joins employment with the deductor during the course of the financial year, his TDS particulars should be reported by the current deductor in Form No. 24Q of the relevant quarter. Further, while submitting Form No. 24Q for the last quarter, the deductor should include particulars of TDS of such employee for the actual period of employment under him in Annexures II & III.

4) The manner of computing total income has been changed in the budget for the current year by allowing deduction under section 80C. However, the present Form No. 24Q shows a column for rebate under section 88, 88B, 88C and 88D. How should Form No. 24Q be filled up in absence of a column for section 80C?

While filling up Form No. 24Q, the columns pertaining to sections 88, 88B, 88C and 88D may be left blank. As regards deduction under section 80C, the same can be shown in the column 342 pertaining to 'Amount deductible under any other provision of Chapter VI-A'.

5) Form No. 24Q shows a column which requires explanation for lower deduction of tax. How can a DDO assess it? Please clarify.

Certificate for lower deduction or no deduction of tax from salary is given by the Assessing Officer on the basis of an application made by the deductee. In cases where the Assessing Officer has issued such a certificate to an employee, deductor has to only mention whether no tax has been deducted or tax has been deducted at lower rate on the basis of such a certificate.

Rules and Forms for TDS/TCS returns

http://www.incometaxindia.gov.in/AmendmentRule.ASP


Return preparation software we can download from bellow link :)

http://www.tin-nsdl.com/eTDSRPU.asp

All forms

Hey guys here is the link for all govt forms....


http://www.incometaxindia.gov.in/allforms.asp

Central Excise Duty

Registration:

Every person who produces or manufactures excisable goods, is required to get registered, unless exempted. If there is any change in information supplied in Form A-1, the same should be supplied in Form A-1.

Daily Stock Account/ RG 1 Register

Manufacturer is required to maintain Daily Stock Account (DSA) of goods manufactured, cleared and in stock.

Clearance of goods under Invoice

Goods must be cleared under Invoice of assessee. In case of cigarettes, invoice should be countersigned by Excise officer

Payment of excise duty

Duty is payable on monthly basis through GAR-7 challan / Cenvat credit by 5th/6th of following month, except in March. SSI units have to pay duty on quarterly basis by 5th/6th of month following the quarter. Assessee paying duty through PLA more than Rs 10 lakhs per annum is required to make e-payment only

Returns of production, clearances and payment of excise duty

Monthly return in form ER-1 should be filed by 10th of following month. SSI units have to file quarterly return in form ER-3. EOU/STP units to file monthly return in form ER-2 – see rule 17(3) of CE Rules E-return is mandatory where duty paid in previous year (by cash and/or through Cenvat credit) exceeded Rs 10 lakhs in previous year.

Annual Financial Information

Assessees paying duty of Rs one crore or more per annum through PLA are required to submit Annual Financial Information Statement for each financial year by 30th November of succeeding year in prescribed form ER-4

Loss on sale of Fixed Asset

Let’s take a practical example to see how to pass journal entry for sale of fixed assets--

Mady bros. who is into the business of Manucturing electrical goods, sold Machine for Rs. 1,50,000.00 which was bought 3 months ago for Rs. 1,80,000.00 .

Now the entry can be made as under :

• Cash Rs. 1,50,000 Dr
  

Machinery Rs. 1,50,000 Cr

(Being sale of furniture)

• Accu. depreciation account Rs. 4,500 Dr
  

Machinery Rs. 4,500 Cr

(Being 10% dep. for 3 months )

• loss on sale of assets Rs. 25,500 Dr
  

(Under indirect expenses)

Machinry A/c Rs. 25,500 Cr

(Being loss suffered on sale of fixed assets)

In the above example, you will see that Machinery account is squared off

Now final entry will be the:-

Cash A/c - 1,50,000 Dr
Acc. Depreciation A/c- 4,500 Dr
Loss on sale of Fixed Asset - 25,500 Dr

Machinery A/c 1,80,000 Cr

(Being loss on sale of fixed asset ) ;)

KARNATAKA PROFESSION TAX

Rates of professional Tax:-

Up to 10,000 --Nil
10,000 To 15,000--150 Rs
15,000 and above--200 Rs

1. Profession tax is levied under the Karnataka Tax on Professions,
Trades, Callings and Employments Act, 1976:

Profession Tax shall be paid by every person exercising any
Profession or calling or is engaged in any trade or holds any appointment,
public or private as specified in the Schedule to the Act.
[However no tax is payable by persons who have attained age of sixty
five years. Also no tax is payable for holding any Profession for less than
120 days in that year.]

2. A person is defined under the Act to mean, any person who is engaged
in any Profession, trade, callings or employment in the State of Karnataka
and includes :-

· Hindu undivided family (HUF)
· Firm
· Company
· Corporations
· Other Corporate bodies
· Any Society
· Any Club or Association.

[Every branch of a firm, company, corporation or other corporate body, any
society, club or association is treated as separate person for the purpose of
tax liability.]

3. REGISTRATION:

In case of salary or wage earners whose salary or wage for a month is
not less than Rs.10,000/-, the employer is liable to deduct Profession Tax
payable under this Act. It is the responsibility of the employer to deduct tax
and pay on behalf of all such employees within 20 days of expiry of the
month. If the amount of tax deducted in a month is less than Rs.5,000/-, the
employer could opt for payment of such tax within 20 days of expiry of a
Quarter. [Quarter means period ending 31st May, 31st August, 30th
November and 28thor 29th February ].

All such employers other than Government shall obtain a Certificate
of Registration from the Profession Tax Officer of the jurisdiction.

4. ENROLLMENT:

Class of persons enumerated in Sl. No.2 to 74 of the Schedule
(Annexure 1) shall obtain a Certificate of Enrollment from the Profession
Tax Officer of the jurisdiction. Such persons with Enrollment Certificate
shall pay tax every year before 30th of April at the rates specified in Column
3 of the Schedule.


5. EXEMPTION:

The following class of persons are exempted from payment of
Profession Tax.

a. All charitable and philanthropic hospitals or nursing homes
situated in places below the taluk level in all districts of the State
except Bangalore and Bangalore Rural District.

b. Directors of Companies registered in Karnataka and nominated by
the financing agencies owned or controlled by the State
Government or by other statutory bodies.

c. Foreign technicians employed in the State provided their
appointments are approved by the Government of India for the
purpose of exemption from payment of income tax for the said
period( exemption is for a period of 2 years from the date of their
joining duty).

d. Combatant and civilian non combatant members of the Armed
Forces who are governed by the Army Act, the Navy Act and the
Air Force Act.

e. Salaried or wage earning blind persons.

f. Salaried or wage earning deaf and dumb persons

g. Holders of permits of single taxi or single three wheeler goods
vehicle.

h. Institutes teaching Kannada or English Shorthand or Typewriting.

i. A Physically handicapped person not less than 40% of permanent
disability (subject to production of certificate from the HOD of
Government Civil Hospital).

j. An ex-serviceman not falling under Sl No.1 of the Schedule.

k. A person having single child and who has undergone sterilization
operation, subject to production of a certificate from the District
Surgeon, Government Civil Hospital, for having undergone such
operation.

l. Central Para Military Force (CPMF) Personnel.

m. Persons running educational institutions in respect of their
branches teaching classes upto twelfth standard or pre-University
Education.


6. PENALTIES UNDER PROFESSION TAX ACT, 1976.


i) Penalty for non-registration in case of employer – Rs.1,000/-
In case of other persons Rs.500/-.

ii) Penalty for non filing of Returns for an employer Rs.250/-.

iii) Penalty for non-payment of tax by enrolled person and
registered employer with interest at rate of 1.25% per month
and Penalty not exceeding 50% of the tax amount due.

From 01-04-2011 provision has been made for the Registration /
Enrollment, payment and filing of Returns under Profession Tax Act
online through website commercial taxes department..