tax

Tax Deducted at Source.(TDS)

2008-07-30T11:31:00.001-07:00

Tax deducted at source is one of the modes of collecting Income-tax from the assessees in India. Such collection of tax is effected at the source when income arises or accrues. Hence where any specified type of income arises or accrues to any one, the Income-tax Act enjoins on the payer of such income to deduct a stipulated percentage of such income by way of Income-tax and pay only the balance amount to the recipient of such income. The tax so deducted at source by the payer, has to be deposited in the Government treasury to the credit of Central Govt. within the specified time. The tax so deducted from the income of the recipient is deemed to be payment of Income-tax by the recipient at the time of his assessment. Income from several sources is subjected to tax deduction at source. Presently this concept of T.D.S. is also used as an instrument in enlarging the tax base. Some of such income subjected to T.D.S. are salary, interest, dividend, interest on securities, winnings from lottery, horse races, commission and brokerage, rent, fees for professional and technical services, payments to non-residents etc.It is always considered as an Advance tax which is paid to the government when we are being paid for provision made by us in the form of products or services.

Unemployment taxes

2008-07-30T11:29:00.001-07:00

Each employer also must pay State and Federal Unemployment Taxes (SUTA and FUTA). The FUTA rate is equal to 6.2% of gross compensation, but normally nets to 0.8% because the employer is allowed to take a credit of up to 5.4% of compensation for SUTA taxes that paid by the employer. This will be the case if the employer is eligible for the maximum credit. The wage base for FUTA is $7,000 (i.e., the employer is liable for FUTA only on the first $7,000 of compensation paid to each employee per calendar year). Each state has a different rate, so that employers must consult the state requirements for each applicable state regarding tax rates and maximum wage base. Many states require new business to have an average starting rate until an employment history is created. For example, Indiana requires new employers to pay 2.7% for the first 3 years. Afterwards the rate is adjusted depending on various factors, such as whether an ex-employee files a request for unemployment benefits.

Social security and Medicare taxes

2008-07-30T11:28:00.000-07:00

Social security and Medicare taxes, also known as FICA taxes, must be withheld from the employee's wages. The employer must also pay a matching amount of FICA taxes for employees.

1. Social Security Tax: As of 2007, the employer must withhold 6.2% of an employee's wages and pay a matching amount in social security taxes until the employee reaches the wage base for the year. The combined total for the employee and the employer is equal to 12.4% of gross compensation. The wage base for social security tax in 2007 is $97,500. Once that amount is earned for a given year, neither the employee nor the employer owe any additional social security tax for that year.

2. Medicare Tax: As of 2007, the employer must withhold 1.45% of an employee's wages and must pay a matching amount for Medicare tax. The combined total for the employee and the employer is equal to 2.9% of gross compensation. Unlike the Social security tax, there is no maximum wage base for the Medicare portion of the FICA tax. Both the employer and the employee continue to incur and pay Medicare tax on each additional amount of gross compensation, with no limit on the amount of gross compensation on which the tax is imposed.

Payroll tax

2008-07-30T11:27:00.002-07:00

Payroll tax generally refers to two kinds of taxes: Taxes which employers are required to withhold from employees' pay, also known as withholding, Pay-As-You-Earn (PAYE) or Pay-As-You-Go (PAYG) tax; and taxes which are paid from the employer's own funds and which are directly related to employing a worker, which may be either fixed charges or proportionally linked to an employee's pay.

Value added tax (VAT)

2008-07-30T11:27:00.001-07:00

Value added tax (VAT), or goods and services tax (GST), is tax on exchanges. It is levied on the added value that results from each exchange. It differs from a sales tax because a sales tax is levied on the total value of the exchange. For this reason, a VAT is neutral with respect to the number of passages that there are between the producer and the final consumer. A VAT is an indirect tax, in that the tax is collected from someone who does not bear the entire cost of the tax. To avoid double taxation on final consumption, exports (which by definition, are consumed abroad) are usually not subject to VAT and VAT charged under such circumstances is usually refundable.

VAT was invented by a French economist in 1954 as taxe sur la valeur ajoutée (TVA in French). Maurice Lauré, joint director of the French tax authority, the Direction générale des impôts, was first to introduce VAT with effect from 10 April 1954 for large businesses, and it was extended over time to all business sectors. In France, it is the most important source of state finance, accounting for approximately 45% of state revenues.^{[citation needed]}

Personal end-consumers of products and services cannot recover VAT on purchases, but businesses are able to recover VAT on the materials and services that they buy to make further supplies or services directly or indirectly sold to end-users. In this way, the total tax levied at each stage in the economic chain of supply is a constant fraction of the value added by a business to its products, and most of the cost of collecting the tax is borne by business, rather than by the state. VAT was invented because very high sales taxes and tariffs encourage cheating and smuggling. It has been criticized on the grounds that (like other consumption taxes) it is a regressive tax.

Income tax

2008-07-30T11:21:00.000-07:00

An income tax is a tax levied on the financial income of persons, corporations, or other legal entities. Various income tax systems exist, with varying degrees of tax incidence. Income taxation can be progressive, proportional, or regressive. When the tax is levied on the income of companies, it is often called a corporate tax, corporate income tax, or profit tax. Individual income taxes often tax the total income of the individual (with some deductions permitted), while corporate income taxes often tax net income (the difference between gross receipts, expenses, and additional write-offs).

INDIAN INCOME TAX RETURN VERIFICATION FORM

2008-07-30T11:16:00.000-07:00

Please Click Down
and get all Income Tax Return
http://www.incometaxindia.gov.in/download_all.asp

THE INCOME-TAX ACT, 1995

2008-07-30T11:14:00.000-07:00

Received the assent of the President on 13-9-1961)

An Act to consolidate and amend the law relating to income-tax 1[and super-tax]

BE it enacted by Parliament in the Twelfth Year of the Republic of India as follows –

CHAPTER I

PRELIMINARY

1. Short title, extent and commencement

(1) This Act may be called the Income-tax Act, 1961.

(2) It extends to the whole of India.2

(3) Save as otherwise provided in this Act, it shall come into force on the 1st day of April, 1962.

E Payment of Taxes

2008-07-30T11:03:00.000-07:00

To facilitate e-payment of taxes CBDT has clarified that an assessee can make e- payment of taxes from the account of any other person. It is also clarified that tax deducted at source (TDS) or tax collected at source (TCS) shall fall within the meaning of tax for the purpose of e-payment

Click Hare Circular No.5

Income Tax Return

2008-07-30T11:00:00.000-07:00

1	Short title, extent and commencement
2	Definitions
3	Charge of gift-tax
4	Gifts to include certain transfers
5	Exemption in respect of certain gifts
6	Value of gifts, how determined
6A	Aggregation of gifts made during a certain period
7	Gift-tax authorities and their jurisdiction
7A	Powers of Commissioner respecting specified areas, cases, persons, etc
7AA	Concurrent jurisdiction of Inspecting Assistant Commissioner and Gift-tax Officer
7B	Power to transfer cases
8	Control of gift-tax authorities
8A	Commissioners of Gift-tax (Appeals)
9	Instructions to subordinate authorities
9A	Directors of Inspection
10	Jurisdiction of Assessing Officers and power to transfer cases
11	Inspector of Gift-tax
11A	Commissioner competent to perform any function or functions
11AA	Gift-tax Officer competent to perform any function or functions
11B	Control of gift-tax authorities
12	Gift-tax authorities to follow orders, etc, of the Board
12A	Power of Chief Commissioner or Commissioner and of Deputy Commissioner to make enquiries under this Act
13	Return of gifts
14	Return after due date and amendment of return
14A	Return by whom to be signed
14B	Self-assessment
15	Assessment
16	Gift escaping assessment
16A	Time limit for completion of assessment and reassessment
16B	Interest for defaults in furnishing return of gifts
17	Penalty for failure to furnish returns, to comply with notices and concealment of gifts, etc
17A	Penalty for failure to answer questions, sign statements, furnish information, allow inspections, etc
18	Rebate on advance payments
18A	Credit for stamp duty paid on instrument of gift
18B	Additional gift-tax
19	Tax of deceased person payable by legal representative
19A	Assessment of persons leaving India
20	Assessment after partition of a Hindu undivided family
21	Liability in case of discontinued firm or association of persons
21A	Assessment of donee when the donor cannot be found
22	Appeal to the Deputy Commissioner (Appeals) from orders of Assessing Officer
22A	Application by the assessee in certain cases
23	Appeal to the Appellate Tribunal
24	Powers of Commissioner to revise orders of sub-ordinate authorities
25	Appeal to the Appellate Tribunal from orders of enhancement by Chief Commissioner or Commissioner
26	Reference to High Court
27	Hearing by High Court
28	Appeal to Supreme Court
28A	Tax to be paid notwithstanding reference, etc
28B	Definition of High Court
29	Gift-tax by whom payable
30	Gift-tax to be charged on property gifted
31	Notice to demand
32	Recovery of tax and penalties
33	Mode of recovery
33A	Refunds
34	Rectification of mistakes
35	Prosecution
35A	Offences by companies
35B	Offence by Hindu undivided families
35C	Section 360 of the Code of Criminal Procedure, 1973 and the Probation of Offenders Act, 1958, not to apply
35D	Presumption as to culpable mental state
35E	Proof of entries in records or documents
36	Power regarding discovery, production of evidence, etc
37	Power to call for information
38	Effect of transfer of authorities on pending proceedings
39	Computation of period of limitation
40	Service of Notice
41	Prohibition of disclosure of information
41A	Publication of information respecting assessees
41B	Disclosure of information respecting assessees
41C	Return of gifts, etc, not to be invalid on certain grounds
42	Bar of suits in civil court
43	Appearance before gift-tax authorities by authorised representatives
43A	Appearance by registered valuer in certain matters
44	Agreement for avoidance or relief of double taxation with respect to gift-tax
44A	Rounding off of taxable gifts
44B	Rounding off of tax, etc
45	Act not to apply in certain cases
46	Power to make rules
46A	Power to make exemption, etc, in relation to certain union territories
47	Power to remove difficulties