New Service Tax Rate Applicability

New Service Tax Rate Applicability

The effective service tax rate, if and when the Swacch Bharat Cess is introduced, will not exceed 14.28%. This should be good news for those who feared that the service tax rates could go up to 16% after the cess is imposed.

The cess may be imposed sometime after June, it is widely felt.

Experts clarified that since the FM had clearly mentioned `cess' (which is a percentage of tax), so the approximate 2% cess would lead to a maximum 0.28% increase in the service tax rate.

The Swacch Bharat (clean India) campaign launched by prime minister Narendra Modi had been widely appreciated by everybody across the country. However, the announcement by finance minister Arun Jaitley of a provision of 2% Swacch Bharat cess has not met with similar applause.

The cess, is being seen as an additional blow, after the 2% increase in service tax introduced in the budget for 2015-16. While the pre-budget service tax rate stands at 12%, the effective rate works out to 12.36% due to the 3% education and health cess.

In the budget, the FM increased the service tax from 12.36% to 14%. Besides, he also announced that he was enabling a provision to impose a Swacch Bharat Cess of up to 2% of the taxable services if more funds were required for the campaign.

This led to fears that the service tax would go up from 14 to 16% among the general public. However, Anil Chopra, Group CEO and Director, Bajaj Capital, says that these fears are unfounded. "As it is a `cess', if introduced, it will lead to an effective service tax rate of 14.28%,'' he points out.

The increase in service tax rates has not been appreciated by the general public as it would make most services expensive. "The service tax is applicable on almost everything from telephone bills to eating out to parlour services too. Everyday you end up paying service tax in at least three to four places,'' adds Chopra.

Chartered accountant Arvind Rao feels that household budgets would definitely take a hit with the higher service tax. "The benefits of the higher slab rates announced in the interim budget last year will be nullified to some extent as many services will become expensive,'' he says.

Meanwhile, insurance players are planning to make representations to the governmentasking for a level playing field. This is because the FM announced an increase in deduction of Rs 50,000 towards National Pension Scheme (NPS) under Section 80CCD.

While the government's agenda to encourage long-term savings is widely appreciated, it is felt that the additional limit for pension plans should have included all pension products including those offered by other private players like life insurers, etc to provide a level-playing field.

"Given the distribution strength of life insurance companies, we would be able to tap a larger segment of the population and much faster too,'' says Aalok Bhan, director and head product solutions management, Max Life Insurance. He is confident that once the representations are made to the government, then the anomaly will be corrected.

File tax returns before 31st march 2015

File tax returns before 31st march 2015

Why need to file tax returns before 31st march 2015?

If you are yet to file income-tax return for the previous financial year 2013-2014 (assessment year 2014-15), you still have a chance to do so by March 31. The return for income earned in the financial year ending on 31 March should ideally be filed by 31 July for non-business taxpayers. But if the taxpayer has missed the deadline in spite of having four months in hand, he can do so till 31 March.

In such a case, the penalty to be levied would depend on the status of the tax to be paid:

If Income tax is already paid either as advance tax or TDS

If you have paid your taxes as advance tax or TDS ( Tax Deducted at Source)has already been deducted then, you don’t have worry to because you can file the tax returns before 31 March without paying a penalty.

But if you miss the new deadline and file the return only after 31 March, the assessing officer may impose a penalty of Rs 5,000 for late filing of return under section 271F . This amount may depend however depend on the discretion of the assessing officer.

So it is advisable not to delay filing your Tax Return and file it before 31st March.

If tax has not been paid or short paid

If you have not cleared the taxes due or you have short paid your Income tax then, you will have to pay a penalty at the rate of 1% per month for the period after 31 July. If the tax due is more than Rs 10,000, you are supposed to pay an advance tax on your income in three tranches. In such a case, the 1% penalty per month will be applicable from the period you have not paid the tranche.

Download excel based Income Tax calculator and calculate your income tax liablity

Is E filing of Income tax Return Compulsory.

E-filing of tax return is compulsory for all tax payers whose taxable Income Exceeds Rs 5,00,000/- (Five lacs).

Who need to file tax returns before 31st march 2015?

In the following situations the Income Tax Act its mandatory for you to file an Income Tax Return in India for Financial Year 2013-14 ( Assessment Year 2014-15 ).

1. You are a Company or a Firm - irrespective of whether you have Income or Loss
2. You are a Person other than a Company or a Firm - when your Gross Total Income (Income before giving deductions under section 10A, 10B, 10BA, 80C to 80U) is more than the amount of minimum exempt income. Minimum Exempt Income is Rs 2,00,000. If you are a Senior Citizen (60 yrs or more at any time in the financial year) exemption limit is Rs 2,50,000 and if you are a Super Senior Citizen (80yrs or more at any time in the financial year) the limit is Rs 5,00,000.
3. You are a Resident Indian and you have any asset or a financial interest in any entity which is located outside India or you are a signing authority in any account outside India - irrespective of whether you have taxable income or not. (this is not applicable to you if you are a NRI or a Resident but Not Ordinarily Resident).
4. You are a person who is in receipt of income derived from property held under a trust for charitable or religious purposes OR A Political Party OR a research association, news agency, educational or medical institution, trade union, a not for profit university or educational institution, a hospital, infrastructure debt fund, any body, any authority or trust - when your Gross Total Income before deductions exceeds minimum amount not chargeable to tax.

Also Note:

Last deadline for financial year 2012-2013 : That Income tax return for financial year 2012-2013 (Assessment year 2013-2014) can be filed only till 31.03.2015. You will not be able to file your tax return post 31.03.2015.

It is advisable to file your tax return, even if your income is less then taxable limit of Rs 2 lacs. Income tax return are required be individuals at time of applying for loan etc.

File your Income Tax Return, if you have not filed your tax return. Relevant link for filing tax returns are given below:

Salary / NRI / Interest Income Return

Business / Professsional / Free lancers tax return

 

LIC Jeevan Lakshya

LIC Jeevan Lakshya

LIC Jeevan Lakshya is a participating non-linked plan which offers a combination of protection and savings. This plan provides for Annual Income benefit that may help to fulfill the needs of the family, primarily for the benefit of children, in case of unfortunate death of Policyholder any time before maturity and a lump sum amount at the time of maturity irrespective of survival of the Policyholder. This plan also takes care of liquidity needs through its loan facility.

Also see LIC Jeevan Ankur - New Child Plan

Benefits:

Death Benefit:

On death of the Life Assured before the stipulated Date of Maturity provided the policy is in full force by paying up to-date premiums, Death Benefit, defined as sum of “Sum Assured on Death”, vested Simple Reversionary Bonuses and Final Additional Bonus, if any, shall be payable.

Where “Sum Assured on Death” is defined as the sum of:

Annual Income Benefit equal to 10% of the Basic Sum Assured, which shall be payable from the policy anniversary coinciding with or following the date of death of Life Assured, till the policy anniversary prior to the date of maturity.

Assured Absolute Amount equal to 110% of Basic Sum Assured, which shall be payable  on due date of maturity; and

The vested Simple Reversionary Bonuses and Final Additional Bonus, if any, included in the Death Benefit,  shall be payable on due date of maturity.

The Death Benefit defined above shall not be less than 105% of all the premiums paid as on date of death.

Premiums referred above exclude tax, extra premium and rider premium(s), if any.

Maturity Benefit:

“Sum Assured on Maturity” equal to Basic Sum Assured, along with vested Simple Reversionary bonuses and Final Additional bonus, if any, shall be payable in lump sum on survival to the end of the policy term provided all due premiums have been paid.

Participation in Profits:

The policy shall participate in profits of the Corporation and shall be entitled to receive Simple Reversionary Bonuses declared as per the experience of the Corporation, provided the policy is in full force.

In case of death under a policy which is in full force, the policy shall continue to participate in profits up to the date of maturity and the entire vested Simple Reversionary Bonuses and Final Additional Bonus, if any, shall be payable on due date of maturity. Hence, the Simple Reversionary Bonus and Final Additional Bonus, if any, shall be payable under the policy on due date of maturity irrespective of survival of the Life Assured.

In case the premiums are not duly paid (except in case of death of the Life Assured under enforce policy), the policy shall cease to participate in future profits irrespective of whether or not the policy has acquired paid up value. However, the policy shall be considered as in force on death during the grace period.

Final Additional Bonus shall not be payable under reduced paid-up policies.

Also see LIC Jeevan Sugam

Optional Benefits:

The policyholder has an option of availing the following Rider benefit(s):

• LIC’s Accidental Death and Disability Benefit Rider (UIN: 512B209V01)
• LIC’s New Term Assurance Rider (UIN: 512B210V01)
• Rider Sum Assured cannot exceed the Basic Sum Assured.

RBI ask banks to follow Rules - Sukanya Samriddhi Account

The Chairman and Managing Director/Managing Director

Head Office, Government Accounts Department

State Bank of India/State Bank of Patiala/

State Bank of Bikaner & Jaipur/State Bank of Travancore/

State Bank of Hyderabad/State Bank of Mysore/Andhra Bank/

Allahabad Bank/Bank of Baroda/Bank of India/Punjab & Sind Bank/

Bank of Maharashtra/Canara Bank/Central Bank of India/ Corporation Bank/

Dena Bank/Indian Bank/Indian Overseas Bank/ Punjab National Bank/

Syndicate Bank/UCO Bank/Oriental Bank of Commerce/ Union Bank of India/

United Bank of India/Vijaya Bank/Axis Bank Ltd./ICICI Bank Ltd./IDBI Bank Ltd.

Dear Sir/Madam,

Sukanya Samriddhi Account

1. We forward herewith a copy of the Government of India Notification No. G.S.R.863(E) dated December 02, 2014 regarding the Sukanya Samriddhi Account for necessary action at your end. The Government of India, vide this Notification, has notified the Sukanya Samriddhi Account Rules, 2014, which came into force with effect from December 02, 2014.
2. Reporting of the Sukanya Samriddhi Account transactions i.e. receipt, payment, penalty, etc. may be directly done through the Government Account at Central Account Section, Reserve Bank of India, Nagpur on daily basis like the transactions of PPF, 1968, in order to have uniformity in reporting, reconciliation and accounting.
3. The Agency banks are required to observe the rules and regulations of the Scheme, and non-observance of rules and regulations would attract penal action, including de-authorization of the branch or bank. Pecuniary liabilities, if any, arising from such non-observance shall be borne entirely by the bank.
4. You may, therefore, approach Central Account Section, Reserve Bank of India, Nagpur for necessary arrangements to report Sukanya Samriddhi Account transactions with immediate effect.
5. Specimen of account opening application form and the passbook of the Sukanya Samriddhi Account are also enclosed for ready reference and necessary action at your end.
6. The contents of this circular may be brought to the notice of the branches of your bank operating the PPF, 1968 Scheme. These instructions should also be displayed on the notice boards of your branches for information.

Yours faithfully

(R. K. Singh)

Deputy General Manager

Encls: As above. –