The document discusses key amendments made by the Finance Bill 2018 under the Income Tax Act.
It discusses changes to income tax rates for individuals, companies, and other assessees for FY 2018-19 compared to FY 2017-18. Notable changes include reduced tax rates for certain domestic companies and increased dividend distribution tax rate for deemed dividends.
It also summarizes some other amendments, including applying dividend distribution tax to deemed dividends under section 2(22)(e), plugging a loophole related to reduction of capital post amalgamation, and a new 100% tax deduction for income of farm producer companies. Key economic trends like exports, imports, trade deficit, gold and forex reserves are also
MAT stands for Minimum Alternate Tax and was introduced in 1988 to tax large corporate groups that were paying zero income tax despite making profits. MAT is currently levied at a rate of 18.5% and applies to companies that are profitable according to their books but pay no tax under normal tax provisions. Companies can claim MAT credit for any MAT paid above the tax amount calculated under normal provisions, which can be used to offset future tax payments not covered by MAT.
The document discusses key aspects of implementing VAT in the UAE, including:
- Reasons for introducing VAT include addressing budget deficits from lower oil prices. A 5% VAT is estimated to raise 1.5-2% of GDP across GCC countries.
- The GCC has agreed to a common VAT framework and treaty with a standard 5% VAT rate applying to most goods and services. Countries can make some exceptions.
- Zero-rated and exempt supplies are outlined that will not be subject to VAT in the UAE, including healthcare, education, residential buildings, and some food.
- Important VAT concepts are defined such as input tax, taxable supplies, and tax periods of 3 months for VAT returns and payments
Business Activity Statement PresentationRajeev Neelay
The document discusses the Business Activity Statement (BAS) and various Australian taxation obligations reported on the BAS, including:
- Goods and Services Tax (GST)
- Pay As You Go Withholding (PAYGW)
- Pay As You Go Installments (PAYGI)
- Fringe Benefits Tax (FBT)
- Wine Equalization Tax (WET)
- Luxury Car Tax (LCT)
It provides details on what information is included in the BAS, who needs to complete one, payment periods, and lodging deadlines. It also gives overviews of each of the different tax types listed above.
This document provides information on the intricacies of Alternate Minimum Tax (AMT) under Section 115JC and Minimum Alternate Tax (MAT) under Section 115JB of the Indian Income Tax Act. It discusses the history and evolution of these taxes over time. It also summarizes key points about the calculation of AMT and MAT, including the treatment of various deductions, expenses, and provisions. The document includes examples and case studies to illustrate the application of AMT and MAT. Overall, it serves as a reference on the complex provisions, calculations, and case laws related to AMT and MAT in India.
Tax Recknor 2015-16
The rates are applicable for
the Financial Year 2015-16 (AY 2016-17)
Applicable Income Tax Rates - Investments in Mutual Fund Schemes
Tax Implications on Dividend received by Unit holders
Dividend Distribution Tax (Payable by the Scheme)
Capital Gains Taxation
Long Term Capital Gains
Short Term Capital Gains
Tax deducted at Source (Applicable only to NRI investors)
Pay As You Go (PAYG) is Australia's system for regularly collecting income tax from earnings during the income year. There are two parts to PAYG - withholdings from payments to others like salaries, and installments paid by individuals and businesses on their own income. PAYG collects tax prepayments that are credited towards taxpayers' annual tax liability. Eligible taxpayers must pay quarterly installments that are calculated based on their business and investment income. Penalties may apply for non-compliance with PAYG obligations.
The document summarizes the introduction of VAT in the UAE and its impact on the construction and real estate sectors. It discusses how VAT groups allow entities to be treated as a single taxable person, reducing VAT implications of internal transactions. It also explains that construction services will likely be subject to 5% VAT, increasing costs, and that contracts should specify how VAT is treated. Finally, it outlines different VAT rules for residential and commercial real estate transactions.
This document provides an overview of key changes to the Indian Income Tax rates and regulations for the fiscal year 2017-2018 (assessment year 2018-2019). Some notable changes include a reduction in tax rates for individuals with income up to Rs. 2.5 lakhs from 10% to 5% and an increase in the surcharge for individuals with total income over Rs. 50 lakhs. Tax rates for companies were also reduced from 30% to 25% for domestic companies with turnover up to Rs. 50 crores. Other changes covered include restrictions on set-off of house property losses, presumptive taxation provisions, capital gains tax rates and periods, and requirements for maintaining books of accounts.
MAT stands for Minimum Alternate Tax and was introduced in 1988 to tax large corporate groups that were paying zero income tax despite making profits. MAT is currently levied at a rate of 18.5% and applies to companies that are profitable according to their books but pay no tax under normal tax provisions. Companies can claim MAT credit for any MAT paid above the tax amount calculated under normal provisions, which can be used to offset future tax payments not covered by MAT.
The document discusses key aspects of implementing VAT in the UAE, including:
- Reasons for introducing VAT include addressing budget deficits from lower oil prices. A 5% VAT is estimated to raise 1.5-2% of GDP across GCC countries.
- The GCC has agreed to a common VAT framework and treaty with a standard 5% VAT rate applying to most goods and services. Countries can make some exceptions.
- Zero-rated and exempt supplies are outlined that will not be subject to VAT in the UAE, including healthcare, education, residential buildings, and some food.
- Important VAT concepts are defined such as input tax, taxable supplies, and tax periods of 3 months for VAT returns and payments
Business Activity Statement PresentationRajeev Neelay
The document discusses the Business Activity Statement (BAS) and various Australian taxation obligations reported on the BAS, including:
- Goods and Services Tax (GST)
- Pay As You Go Withholding (PAYGW)
- Pay As You Go Installments (PAYGI)
- Fringe Benefits Tax (FBT)
- Wine Equalization Tax (WET)
- Luxury Car Tax (LCT)
It provides details on what information is included in the BAS, who needs to complete one, payment periods, and lodging deadlines. It also gives overviews of each of the different tax types listed above.
This document provides information on the intricacies of Alternate Minimum Tax (AMT) under Section 115JC and Minimum Alternate Tax (MAT) under Section 115JB of the Indian Income Tax Act. It discusses the history and evolution of these taxes over time. It also summarizes key points about the calculation of AMT and MAT, including the treatment of various deductions, expenses, and provisions. The document includes examples and case studies to illustrate the application of AMT and MAT. Overall, it serves as a reference on the complex provisions, calculations, and case laws related to AMT and MAT in India.
Tax Recknor 2015-16
The rates are applicable for
the Financial Year 2015-16 (AY 2016-17)
Applicable Income Tax Rates - Investments in Mutual Fund Schemes
Tax Implications on Dividend received by Unit holders
Dividend Distribution Tax (Payable by the Scheme)
Capital Gains Taxation
Long Term Capital Gains
Short Term Capital Gains
Tax deducted at Source (Applicable only to NRI investors)
Pay As You Go (PAYG) is Australia's system for regularly collecting income tax from earnings during the income year. There are two parts to PAYG - withholdings from payments to others like salaries, and installments paid by individuals and businesses on their own income. PAYG collects tax prepayments that are credited towards taxpayers' annual tax liability. Eligible taxpayers must pay quarterly installments that are calculated based on their business and investment income. Penalties may apply for non-compliance with PAYG obligations.
The document summarizes the introduction of VAT in the UAE and its impact on the construction and real estate sectors. It discusses how VAT groups allow entities to be treated as a single taxable person, reducing VAT implications of internal transactions. It also explains that construction services will likely be subject to 5% VAT, increasing costs, and that contracts should specify how VAT is treated. Finally, it outlines different VAT rules for residential and commercial real estate transactions.
This document provides an overview of key changes to the Indian Income Tax rates and regulations for the fiscal year 2017-2018 (assessment year 2018-2019). Some notable changes include a reduction in tax rates for individuals with income up to Rs. 2.5 lakhs from 10% to 5% and an increase in the surcharge for individuals with total income over Rs. 50 lakhs. Tax rates for companies were also reduced from 30% to 25% for domestic companies with turnover up to Rs. 50 crores. Other changes covered include restrictions on set-off of house property losses, presumptive taxation provisions, capital gains tax rates and periods, and requirements for maintaining books of accounts.
This document discusses key concepts related to Value Added Tax (VAT) in India, including:
1) VAT is a tax on the sale or purchase of goods levied by state governments based on constitutional powers. It aims to reduce cascading of taxes.
2) The key benefit of VAT over the previous sales tax system is the input tax credit mechanism, which allows traders to deduct taxes paid on previous purchases/inputs from their total tax liability on sales.
3) VAT applies at multiple stages of production and distribution, with tax charged on value added at each stage and cross-credits of taxes paid allowed through the input tax credit mechanism. This avoids double taxation.
Taxation for IT in Ukraine. Diia City. Conventa Legal presentationMikhail Ivanenko
Big hopes for the digital economy in Ukraine, aiming at 10% GDP in 3-5 years. To achieve that the government introduced favorable taxation as a part of its Diia City legal regime.
Companies will be able to choose 9% distributed profit tax - basically not to pay any corporate tax in case there is no distribution of profits like dividends, or some other forms. An option to choose net profit tax at 18% will remain as well if an IT company is willing to do so.
Taxation of salaries has been lowered drastically - personal income tax and military levy make 6.5% combined and around USD 50 shall be paid as a social security tax. For high salaries, this may mean that an effective tax rate will be in the range of 7-8% which is pretty competitive globally, leave alone EU and Eastern Europe.
This document contains tax rates and rules for different types of income and transactions in India. Form 24Q outlines income tax rates for individuals of different ages and income levels. Form 26Q lists tax deduction rates for various types of payments. Form 27Q provides tax rates for payments to non-residents. Form 27EQ outlines tax collection rates on the sale of certain goods and services.
Tax forum 2016 recent tax changes and white book recommendations follow up (2)Anthony Galliano
CEO of Cambodian Investment Management and Eurocham Tax Committee Chairman, Anthony Galliano, gave a presentation at the Eurocham Cambodia Tax Forum 2016 on Recent Tax Changes and White Paper Recommendations
In this presentation, we will discuss new slab rates, their comparison with old rates and limitations of the new tax regime.
you can also download the calculator from the below link which helps you to calculate tax liability under both the old tax regime and new tax regime.
https://drive.google.com/open?id=1yYYMEAs0VnEU0M3laHFgT89hXVchm2a2&fbclid=IwAR1QwBW5Cqr2lWXvzVl7hCrA46Pr_J_ZPjJF2MQyOEj5epY6Oleilfgp0bw
This document provides an overview of taxation in India. It discusses the basic concepts of direct and indirect taxes, income tax, types of residents and income. It outlines the rates of income tax for individuals, HUFs, firms and companies for the assessment year 2019-2020. It also discusses taxation rates for agriculture income, TDS rates, surcharge rates and special rates for capital gains and winnings. Marginal relief is explained which provides that additional tax liability on income exceeding certain thresholds will be limited.
Major highlights of Nepal Budgets for FY 2074/75 presented by Honorable Finance Minister Mr. Krishna Bahadur Mahara in the House of Assembly on 29 May, 2017.
The Indian taxation system is well structured and compulsory. It is imposed by public authorities. The system has recently focused on better compliance, enforcement, and ease of tax payment. Personal income tax rates range from 0% to 30% depending on income level. The central government levies direct taxes like income tax, capital gains tax, and corporate tax as well as indirect taxes like customs duty, service tax, and excise duty. State governments impose taxes like dividend tax and payroll tax. Local bodies levy taxes as well. Tax incentives are provided for research and development, housing, infrastructure projects, food processing, and mineral oil production.
This document provides a summary of tax proposals and changes to the Goods and Services Tax (GST) in India. Key tax proposals include reducing the corporate tax rate for certain companies to 25% and changing individual tax slab rates. Changes to the GST include requiring 37 tax returns for each registration, only allowing input tax credit upon receipt of goods and services, and separate inventory and receipt recording. The document also outlines other potential impacts of the tax proposals and transition to GST such as new billing patterns, credit transfers, and changes to ERP systems.
This document provides an overview and summary of key aspects of taxation in Kenya:
- Corporate income tax rates are 30% for resident companies and 37.5% for non-resident companies. Capital gains tax is 5%. Withholding taxes apply to various payments to non-residents like dividends at 10%, interest at 15%, royalties at 20%.
- Individuals are subject to income tax if resident in Kenya or if their employment is connected to Kenya. Taxable employment income includes cash and non-cash benefits. Housing and vehicle benefits provided by employers are taxed based on prescribed formulas.
- Other significant taxes include 16% VAT, 1.5% railway development levy, and mandatory 6
This document provides an overview of taxation in India. It discusses various direct and indirect taxes collected by the central and state governments. Direct taxes include personal income tax, corporate income tax, and capital gains tax. Indirect taxes previously included excise duty, service tax, customs duty, and central sales tax. Recent reforms like GST have subsumed many indirect taxes. The document also explains concepts like tax deductions, tax collected at source, minimum alternate tax, and taxes on gifts, inheritance, wealth, securities transactions, and more.
The taxation system in India includes direct taxes like income tax and indirect taxes like goods and service tax (GST). Income tax rates vary based on an individual's age and income level, with lower rates for those below age 60 and senior citizens. Corporate tax rates were recently reduced to 22% for existing companies and 15% for new manufacturing companies. Indirect taxes include GST applied between 0.25-28% on various goods and services, as well as taxes like customs duty and excise duty. The document provides details on tax slabs, rates and policies in India.
This document provides a summary of tax rates and allowances for the 2015/16 tax year in the UK, including:
- Personal income tax allowances and rates for earned and unearned income.
- Capital gains tax exemptions and rates for individuals and trusts.
- Inheritance tax nil rate band and tapered relief on gifts made within 7 years of death.
- Corporation tax rates applied in stages to company profits.
- Annual investment allowance and other capital allowances for plant and machinery.
- Value added tax registration thresholds and standard/reduced rates.
The Australian government introduced a Goods and Services Tax (GST) in 2000 to replace older sales taxes that were outdated, internationally uncompetitive, and complex. The GST is a 10% tax on private consumption that applies broadly to goods, services, and other supplies. It functions as a value-added tax where businesses can claim credits for GST paid on inputs. Various transitional policies were implemented to smooth the introduction of the new tax, which generated increasing revenue for state and territory governments in its early years.
The taxation system in India has a three-tier federal structure with taxes levied by the central government, state governments, and local authorities. There are two main types of taxes - direct and indirect. Direct taxes include income tax, corporate tax, and capital gains tax, which are imposed on individuals and corporations. Indirect taxes include GST, customs duty, and stamp duty, which are levied on goods and services and can be passed on to other parties. The GST implemented in 2017 replaced many indirect taxes and is a comprehensive, multi-stage, destination-based tax applied across India.
The Finance Minister presented the annual budget which included some tax changes. Key points included:
- Increasing the surcharge rate for individuals earning over Rs. 1 crore and companies earning over Rs. 10 crore from 5% to 10%, raising effective tax rates.
- Taxing share buybacks at 20% like dividends to prevent profit repatriation through buybacks. However, this may impact legitimate restructuring.
- Accepting most GAAR recommendations including deferring it by 2 years but ignoring grandfathering of investments and monetary threshold.
- Increasing withholding tax on royalties and technical fees from 10% to 25%, which exceeds many tax treaty rates.
The document summarizes the global efforts to reform international corporate taxation of multinational corporations (MNCs). It discusses existing issues like base erosion and profit shifting (BEPS) and measures taken by OECD and countries. It then summarizes the recent agreement by G7 countries to support OECD's two pillar approach for taxing MNCs. Pillar One aims to reallocate some profits to market jurisdictions. Pillar Two proposes a global minimum corporate tax of 15%. The agreement could significantly impact tax havens and boost tax revenues but also faces challenges in implementation.
This document summarizes tax reforms and rates in Pakistan over the last two decades. It shows tax-to-GDP ratios from 1990-2010 for various taxes. Major reforms included the Income Tax Ordinance of 2001 and Sales Tax Act of 1951. The National Tax Commission in 1985 recommended reducing direct tax rates and broadening the indirect tax base. Key indirect taxes are customs duties, sales tax, and central excise duty. Agricultural income tax rates in Punjab are provided. Challenges to tax collection include high inflation, corruption, and lack of mechanisms. Recommendations include increasing the tax net rather than rates and establishing institutions to monitor large businesses.
Corporate tax is collected from companies incorporated in India and is levied on their global income if the company's control and management is in India. Corporate tax planning aims to minimize current and future tax liabilities through comparing opportunities to defer or reduce taxes, as corporate tax is a significant overhead cost. The minimum alternate tax of 18.5% of book profits is levied if it exceeds the tax payable under normal provisions. Calculation of book profits involves adding certain expenses back and deducting certain incomes for tax purposes.
This document provides an overview of key Indian tax rates, rules, and regulations for the assessment years 2021-22 and 2022-23. It summarizes income tax slabs and rates for individuals, HUF, firms, companies and cooperative societies. It also outlines key tax deducted at source provisions around applicable thresholds and rates for common income types like salary, interest, dividends, rent, professional fees, and payments to contractors.
The document provides an overview of the key proposed amendments in direct taxes under the Finance Bill 2018. Some of the major amendments include:
1. No change in income tax rates for individuals, HUFs, firms, etc. Surcharge and health and education cess rates amended.
2. Threshold for applicability of dividend distribution tax to equity mutual funds increased. Deemed dividend to attract higher DDT of 30%.
3. New regime introduced for taxation of long term capital gains from equity shares, equity mutual funds and unit of business trusts at 10% for gains over ₹1 lakh.
Our Tax team has summarised the important compliance related provisions of Income Tax Act 1961 and prepared the compliance hand book for easy reference.
This document discusses key concepts related to Value Added Tax (VAT) in India, including:
1) VAT is a tax on the sale or purchase of goods levied by state governments based on constitutional powers. It aims to reduce cascading of taxes.
2) The key benefit of VAT over the previous sales tax system is the input tax credit mechanism, which allows traders to deduct taxes paid on previous purchases/inputs from their total tax liability on sales.
3) VAT applies at multiple stages of production and distribution, with tax charged on value added at each stage and cross-credits of taxes paid allowed through the input tax credit mechanism. This avoids double taxation.
Taxation for IT in Ukraine. Diia City. Conventa Legal presentationMikhail Ivanenko
Big hopes for the digital economy in Ukraine, aiming at 10% GDP in 3-5 years. To achieve that the government introduced favorable taxation as a part of its Diia City legal regime.
Companies will be able to choose 9% distributed profit tax - basically not to pay any corporate tax in case there is no distribution of profits like dividends, or some other forms. An option to choose net profit tax at 18% will remain as well if an IT company is willing to do so.
Taxation of salaries has been lowered drastically - personal income tax and military levy make 6.5% combined and around USD 50 shall be paid as a social security tax. For high salaries, this may mean that an effective tax rate will be in the range of 7-8% which is pretty competitive globally, leave alone EU and Eastern Europe.
This document contains tax rates and rules for different types of income and transactions in India. Form 24Q outlines income tax rates for individuals of different ages and income levels. Form 26Q lists tax deduction rates for various types of payments. Form 27Q provides tax rates for payments to non-residents. Form 27EQ outlines tax collection rates on the sale of certain goods and services.
Tax forum 2016 recent tax changes and white book recommendations follow up (2)Anthony Galliano
CEO of Cambodian Investment Management and Eurocham Tax Committee Chairman, Anthony Galliano, gave a presentation at the Eurocham Cambodia Tax Forum 2016 on Recent Tax Changes and White Paper Recommendations
In this presentation, we will discuss new slab rates, their comparison with old rates and limitations of the new tax regime.
you can also download the calculator from the below link which helps you to calculate tax liability under both the old tax regime and new tax regime.
https://drive.google.com/open?id=1yYYMEAs0VnEU0M3laHFgT89hXVchm2a2&fbclid=IwAR1QwBW5Cqr2lWXvzVl7hCrA46Pr_J_ZPjJF2MQyOEj5epY6Oleilfgp0bw
This document provides an overview of taxation in India. It discusses the basic concepts of direct and indirect taxes, income tax, types of residents and income. It outlines the rates of income tax for individuals, HUFs, firms and companies for the assessment year 2019-2020. It also discusses taxation rates for agriculture income, TDS rates, surcharge rates and special rates for capital gains and winnings. Marginal relief is explained which provides that additional tax liability on income exceeding certain thresholds will be limited.
Major highlights of Nepal Budgets for FY 2074/75 presented by Honorable Finance Minister Mr. Krishna Bahadur Mahara in the House of Assembly on 29 May, 2017.
The Indian taxation system is well structured and compulsory. It is imposed by public authorities. The system has recently focused on better compliance, enforcement, and ease of tax payment. Personal income tax rates range from 0% to 30% depending on income level. The central government levies direct taxes like income tax, capital gains tax, and corporate tax as well as indirect taxes like customs duty, service tax, and excise duty. State governments impose taxes like dividend tax and payroll tax. Local bodies levy taxes as well. Tax incentives are provided for research and development, housing, infrastructure projects, food processing, and mineral oil production.
This document provides a summary of tax proposals and changes to the Goods and Services Tax (GST) in India. Key tax proposals include reducing the corporate tax rate for certain companies to 25% and changing individual tax slab rates. Changes to the GST include requiring 37 tax returns for each registration, only allowing input tax credit upon receipt of goods and services, and separate inventory and receipt recording. The document also outlines other potential impacts of the tax proposals and transition to GST such as new billing patterns, credit transfers, and changes to ERP systems.
This document provides an overview and summary of key aspects of taxation in Kenya:
- Corporate income tax rates are 30% for resident companies and 37.5% for non-resident companies. Capital gains tax is 5%. Withholding taxes apply to various payments to non-residents like dividends at 10%, interest at 15%, royalties at 20%.
- Individuals are subject to income tax if resident in Kenya or if their employment is connected to Kenya. Taxable employment income includes cash and non-cash benefits. Housing and vehicle benefits provided by employers are taxed based on prescribed formulas.
- Other significant taxes include 16% VAT, 1.5% railway development levy, and mandatory 6
This document provides an overview of taxation in India. It discusses various direct and indirect taxes collected by the central and state governments. Direct taxes include personal income tax, corporate income tax, and capital gains tax. Indirect taxes previously included excise duty, service tax, customs duty, and central sales tax. Recent reforms like GST have subsumed many indirect taxes. The document also explains concepts like tax deductions, tax collected at source, minimum alternate tax, and taxes on gifts, inheritance, wealth, securities transactions, and more.
The taxation system in India includes direct taxes like income tax and indirect taxes like goods and service tax (GST). Income tax rates vary based on an individual's age and income level, with lower rates for those below age 60 and senior citizens. Corporate tax rates were recently reduced to 22% for existing companies and 15% for new manufacturing companies. Indirect taxes include GST applied between 0.25-28% on various goods and services, as well as taxes like customs duty and excise duty. The document provides details on tax slabs, rates and policies in India.
This document provides a summary of tax rates and allowances for the 2015/16 tax year in the UK, including:
- Personal income tax allowances and rates for earned and unearned income.
- Capital gains tax exemptions and rates for individuals and trusts.
- Inheritance tax nil rate band and tapered relief on gifts made within 7 years of death.
- Corporation tax rates applied in stages to company profits.
- Annual investment allowance and other capital allowances for plant and machinery.
- Value added tax registration thresholds and standard/reduced rates.
The Australian government introduced a Goods and Services Tax (GST) in 2000 to replace older sales taxes that were outdated, internationally uncompetitive, and complex. The GST is a 10% tax on private consumption that applies broadly to goods, services, and other supplies. It functions as a value-added tax where businesses can claim credits for GST paid on inputs. Various transitional policies were implemented to smooth the introduction of the new tax, which generated increasing revenue for state and territory governments in its early years.
The taxation system in India has a three-tier federal structure with taxes levied by the central government, state governments, and local authorities. There are two main types of taxes - direct and indirect. Direct taxes include income tax, corporate tax, and capital gains tax, which are imposed on individuals and corporations. Indirect taxes include GST, customs duty, and stamp duty, which are levied on goods and services and can be passed on to other parties. The GST implemented in 2017 replaced many indirect taxes and is a comprehensive, multi-stage, destination-based tax applied across India.
The Finance Minister presented the annual budget which included some tax changes. Key points included:
- Increasing the surcharge rate for individuals earning over Rs. 1 crore and companies earning over Rs. 10 crore from 5% to 10%, raising effective tax rates.
- Taxing share buybacks at 20% like dividends to prevent profit repatriation through buybacks. However, this may impact legitimate restructuring.
- Accepting most GAAR recommendations including deferring it by 2 years but ignoring grandfathering of investments and monetary threshold.
- Increasing withholding tax on royalties and technical fees from 10% to 25%, which exceeds many tax treaty rates.
The document summarizes the global efforts to reform international corporate taxation of multinational corporations (MNCs). It discusses existing issues like base erosion and profit shifting (BEPS) and measures taken by OECD and countries. It then summarizes the recent agreement by G7 countries to support OECD's two pillar approach for taxing MNCs. Pillar One aims to reallocate some profits to market jurisdictions. Pillar Two proposes a global minimum corporate tax of 15%. The agreement could significantly impact tax havens and boost tax revenues but also faces challenges in implementation.
This document summarizes tax reforms and rates in Pakistan over the last two decades. It shows tax-to-GDP ratios from 1990-2010 for various taxes. Major reforms included the Income Tax Ordinance of 2001 and Sales Tax Act of 1951. The National Tax Commission in 1985 recommended reducing direct tax rates and broadening the indirect tax base. Key indirect taxes are customs duties, sales tax, and central excise duty. Agricultural income tax rates in Punjab are provided. Challenges to tax collection include high inflation, corruption, and lack of mechanisms. Recommendations include increasing the tax net rather than rates and establishing institutions to monitor large businesses.
Corporate tax is collected from companies incorporated in India and is levied on their global income if the company's control and management is in India. Corporate tax planning aims to minimize current and future tax liabilities through comparing opportunities to defer or reduce taxes, as corporate tax is a significant overhead cost. The minimum alternate tax of 18.5% of book profits is levied if it exceeds the tax payable under normal provisions. Calculation of book profits involves adding certain expenses back and deducting certain incomes for tax purposes.
This document provides an overview of key Indian tax rates, rules, and regulations for the assessment years 2021-22 and 2022-23. It summarizes income tax slabs and rates for individuals, HUF, firms, companies and cooperative societies. It also outlines key tax deducted at source provisions around applicable thresholds and rates for common income types like salary, interest, dividends, rent, professional fees, and payments to contractors.
The document provides an overview of the key proposed amendments in direct taxes under the Finance Bill 2018. Some of the major amendments include:
1. No change in income tax rates for individuals, HUFs, firms, etc. Surcharge and health and education cess rates amended.
2. Threshold for applicability of dividend distribution tax to equity mutual funds increased. Deemed dividend to attract higher DDT of 30%.
3. New regime introduced for taxation of long term capital gains from equity shares, equity mutual funds and unit of business trusts at 10% for gains over ₹1 lakh.
Our Tax team has summarised the important compliance related provisions of Income Tax Act 1961 and prepared the compliance hand book for easy reference.
The document provides an overview of key proposals in the Indian Union Budget for 2017, including:
- Reducing personal income tax rates for individuals earning between 2.5-5 lakhs INR from 10% to 5%.
- Introducing a 10% surcharge on individuals earning between 50 lakhs-1 crore INR.
- Reducing the holding period for long term capital gains tax on immovable property from 3 to 2 years.
- Reducing the corporate tax rate for small companies with turnover under 50 crores INR in FY 2016 to 25%.
- Proposing changes to promote digital payments for small unorganized businesses.
The document provides an overview of key proposals in the Indian Union Budget for 2017, including:
- Reducing personal income tax rates for individuals earning between 2.5-5 lakhs INR from 10% to 5%.
- Introducing a 10% surcharge on individuals earning between 50 lakhs-1 crore INR.
- Reducing the holding period for long term capital gains tax on immovable property from 3 to 2 years.
- Reducing the corporate tax rate for small companies with turnover under 50 crores INR in FY 2016 to 25%.
- Proposing changes to promote digital payments for small unorganized businesses.
The document discusses Tax Deduction at Source (TDS) in India. Some key points:
- TDS is a system where the payer of certain types of payments like salary, rent, interest, etc. is required to deduct a percentage of tax from the payment amount.
- Common deductions include interest, commission, rent, salary. The deducted amount is paid to the government on behalf of the recipient.
- TDS rates vary based on the type of income and thresholds. For example, interest income above ₹40,000 is taxed at 10%.
- Form 26AS issued by the employer/payer shows the TDS deducted from salary payments.
Lecture Meeting on Filing of Income-tax Returns for A.Y. 2010-11 by Chetan Shahbcasglobal
The document summarizes key amendments to the Indian Income Tax rates and rules for the 2010-11 assessment year. It outlines new tax rates for individuals, HUFs, women, senior citizens, firms, domestic companies, and foreign companies. It also summarizes changes to sections related to charitable purposes, tax holidays, research and development deductions, cash payment restrictions, partner remuneration, TDS defaults, gift tax, Chapter VI-A deductions, disability deductions, pension contributions, education loans, electoral trusts, MAT rates, LLP taxation, advance tax thresholds, dividend distribution tax, and wealth tax limits.
The budget document proposes changes to direct and indirect taxes as well as general policies. For direct taxes, no change is proposed to individual tax rates but rebates are increased. Surcharges on taxes over Rs. 1 crore are increased. Tax benefits for home loans and pension funds are introduced. Threshold limits for tax audits are increased. For indirect taxes, service tax is increased by 0.5% to introduce a new agricultural cess. Excise duties are increased on tobacco, jewellery and garments. Tax compliance measures like e-assessments and dispute resolution processes are expanded.
Finance Act 2016 Amendments in Income Tax Laws - A Y 2017-18CA Janardhana Gouda
Finance Act 2016 Amendments in Income Tax Laws applicable for Assessment year 2017-18 on wards. Major Amendments for Individuals, Companies and Changes in TDS and TCS Provisions etc
Honourable Finance Minister Nirmala Sitharaman has presented her second Union Budget in the Parliament on 01 February 2020. This Budget focused on bringing a series of measures aimed at promoting investments in the country, creating a world class infrastructure and stimulating economic growth.
We bring you our analysis of Direct Tax proposals announced by the Hon'ble Finance Minister at her budget speech. Some of the key takeaways are highlighted below:
• 15% concessional tax regime for new domestic manufacturing companies will now be applicable to Power-generating companies as well;
• Alternative personal tax regime made available for Individual/ HUFs
• Abolition of Dividend Distribution Tax (DDT);
• Advance Pricing Agreement and Safe Harbour Rules to cover Income Attribution to a Permanent Establishment (PE);
• Thin Capitalization provisions liberalized and have been made inapplicable to a debt provided by PE of non-resident engaged in the business of banking in India;
• TDS on e-commerce transactions;
• TCS on overseas remittances under Liberalised Remittance Scheme (LRS), purchase of overseas tour packages and purchase of goods;
• Threshold of residency for citizens & PIOs visiting India reduced from 182 days to 120 days. Further, definition of ‘Not ordinarily resident’ is also narrowed;
• Donations to charitable institutions made to be pre-filled in IT return form to claim exemptions for donations easily. Further the Income Tax exemption approvals to Charitable Institutions is made subject to renewal every five years
Publication - RSM India Budget 2016 Key AspectsRSM India
We are pleased to enclose herewith our publication viz. 'India Budget 2016 – Key Aspects'which provides a broad overview of the Union Budget 2016-17 presented on 29thFebruary 2016. While we have largely covered direct and indirect tax proposal of the Indian Government for the fiscal year 2016-17, other major policy initiatives having significant impact on the business in general, have been briefly dealt with.
In the midst of an uncertain global economic outlook, India is emerging as the new ‘global economic hotspot’. The Indian economy is estimated to grow at 7.6% in FY 2015-16 and is expected to grow at 7% to 7.75% in FY 2016-17, making it the fastest growing major economy in the world. The Union Budget 2016 is primarily driven with the objective of accelerating investment in infrastructural sector, fiscal consolidation and reducing litigation.
In our budget publication, we have analysed the significant budget proposals and have additionally included the following reference chapters:
• G20 Countries - Comparative Corporate and Personal Tax Rates
• DTAA Rates
• Tax Incentives for Businesses
• Direct Taxes and Service Tax Compliance Calendar
• TDS Chart
We trust you will find the same useful.
Budget 2016 was recently announced by the Finance Minister of India. This Presentation unravels the Transfer Pricing and International Tax proposals of the Budget 2016.
RSM India publication - India Budget 2015 HighlightsRSM India
This publication offers a broad outline of the highlights of Union Budget 2015. Contains the proposals and amendments as given in the Finance Bill, 2015
TDS stands for Tax Deducted at Source. As per the Income Tax Act, any person or company making certain types of payments above a threshold amount is required to deduct tax from the payment. This deducted tax is then deposited with the government. Common types of payments where TDS applies include salaries, rent, contract payments, professional fees, interest payments, and others. It is the responsibility of the deductor to deduct TDS at the time of making the payment and deposit it with the government on time. The deductee can claim tax credit for the TDS amount deducted based on the TDS certificate provided by the deductor.
This document summarizes key changes from the Indian Budget 2017 relating to direct taxes, indirect taxes, and other financial measures. For individuals, the document outlines changes such as reduced income tax rates, increased deduction limits, and simplified income tax returns. For corporates and professionals, it discusses changes like the corporate tax rate and presumptive taxation. The document also summarizes changes to capital gains tax, TDS/TCS provisions, and introduces new penalties for non-compliance. Regarding indirect taxes, it notes that the Goods and Services Tax is expected to be implemented soon and replaces existing service tax and excise duty laws.
This document provides an overview of the significant proposals in the Union Budget 2015-2016 presented by Khandelwal Jain & Co., a chartered accountancy firm. It outlines several proposed changes to direct and indirect tax rates and rules in India, including minor increases in income tax rates for individuals and corporations earning over 1 crore rupees annually. It also proposes expanding the definition of 'charitable purpose' under the tax code and establishes rules for determining the residency status of companies based on their place of effective management.
This document provides tax rates in Pakistan for the year 2017 according to the Finance Bill 2016-17. It outlines income tax rates for salary income, business income, capital gains tax, withholding taxes on various transactions, minimum tax rates for different industries, and tax rates on properties, builders, and developers. The rates are organized into tables with categories of taxable income or transactions and the corresponding tax rates.
The document summarizes key highlights from India's 2010-2011 budget related to indirect taxes, direct taxes, deductions and exemptions, and tax rates. Some key points include:
- Service tax rate remained unchanged at 10% but new services were taxed, while some services were excluded.
- Income tax slabs and exemption limits for individuals remained largely unchanged. Surcharge on personal income tax was removed.
- Corporate tax rate remained at 30% for domestic companies. MAT was increased to 18% and surcharge reduced to 7.5% for companies with income over Rs. 1 Crore.
- Deductions were introduced or increased for infrastructure bonds, health insurance, and research and development expenditures.
The document summarizes key changes to India's income tax rates and policies introduced in the 2017 Union Budget. Some highlights include:
- Income tax slab rates were reduced for individual taxpayers with annual income up to Rs. 250,000 taxed at 5% instead of 10%.
- Corporate tax rates were lowered to 25% for domestic companies from 29% previously.
- Cash transaction limits for tax deductibility were set at Rs. 10,000 and tax rebates were increased for individual taxpayers.
- Presumptive income rates were reduced to 6% for small businesses with annual turnover up to Rs. 2 crore.
- Tax audit limits were increased to Rs. 2 crore annual turnover.
This document briefly explains the June compliance calendar 2024 with income tax returns, PF, ESI, and important due dates, forms to be filled out, periods, and who should file them?.
Sangyun Lee, 'Why Korea's Merger Control Occasionally Fails: A Public Choice ...Sangyun Lee
Presentation slides for a session held on June 4, 2024, at Kyoto University. This presentation is based on the presenter’s recent paper, coauthored with Hwang Lee, Professor, Korea University, with the same title, published in the Journal of Business Administration & Law, Volume 34, No. 2 (April 2024). The paper, written in Korean, is available at <https://shorturl.at/GCWcI>.
Lifting the Corporate Veil. Power Point Presentationseri bangash
"Lifting the Corporate Veil" is a legal concept that refers to the judicial act of disregarding the separate legal personality of a corporation or limited liability company (LLC). Normally, a corporation is considered a legal entity separate from its shareholders or members, meaning that the personal assets of shareholders or members are protected from the liabilities of the corporation. However, there are certain situations where courts may decide to "pierce" or "lift" the corporate veil, holding shareholders or members personally liable for the debts or actions of the corporation.
Here are some common scenarios in which courts might lift the corporate veil:
Fraud or Illegality: If shareholders or members use the corporate structure to perpetrate fraud, evade legal obligations, or engage in illegal activities, courts may disregard the corporate entity and hold those individuals personally liable.
Undercapitalization: If a corporation is formed with insufficient capital to conduct its intended business and meet its foreseeable liabilities, and this lack of capitalization results in harm to creditors or other parties, courts may lift the corporate veil to hold shareholders or members liable.
Failure to Observe Corporate Formalities: Corporations and LLCs are required to observe certain formalities, such as holding regular meetings, maintaining separate financial records, and avoiding commingling of personal and corporate assets. If these formalities are not observed and the corporate structure is used as a mere façade, courts may disregard the corporate entity.
Alter Ego: If there is such a unity of interest and ownership between the corporation and its shareholders or members that the separate personalities of the corporation and the individuals no longer exist, courts may treat the corporation as the alter ego of its owners and hold them personally liable.
Group Enterprises: In some cases, where multiple corporations are closely related or form part of a single economic unit, courts may pierce the corporate veil to achieve equity, particularly if one corporation's actions harm creditors or other stakeholders and the corporate structure is being used to shield culpable parties from liability.
सुप्रीम कोर्ट ने यह भी माना था कि मजिस्ट्रेट का यह कर्तव्य है कि वह सुनिश्चित करे कि अधिकारी पीएमएलए के तहत निर्धारित प्रक्रिया के साथ-साथ संवैधानिक सुरक्षा उपायों का भी उचित रूप से पालन करें।
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Excited to share insights from my recent presentation on genocide! 💡 In light of ongoing debates, it's crucial to delve into the nuances of this grave crime.
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2. Agenda of Discussion
Key Economic Trends
Amendments made by Finance Bill, 2018 under the Income tax Act, 1961.
Amendments made by Finance Bill, 2018 under Indirect tax laws.
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7. Amendments made under the Income tax Act, 1961
The amendments under the Income tax Act, 1961 (“the Act”) have been discussed in the manner
provided below:
Rates of Income tax (FY 2017-18 vs FY 2018-19)
Amendments relating to Corporates
Amendments relating to Individuals
Amendments relating to Trusts
Amendments relating to ICDS
Amendments having impact on Foreign Currency Inflows
Common Amendments
Note:
The above discussion will include Comparatives with FY 2017-18 and also some Examples
showing impact.
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8. Rates of Income tax (FY 2017-18 vs FY 2018-19)
INDIVIDUALS:
Persons FY 2017-18 FY 2018-19 Change
Individuals (< 60 years – Resident) & Non-Resident
0 - 2,50,000 0% 0% No Change
2,50,001 - 5,00,000 5% 5% No Change
5,00,001 – 10,00,000 20% 20% No Change
Above 10,00,000 30% 30% No Change
RESIDENT Individuals (>= 60 years)
0 – 3,00,000 0% 0% No Change
3,00,001 - 5,00,000 5% 5% No Change
5,00,001 – 10,00,000 20% 20% No Change
Above 10,00,000 30% 30% No Change
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9. Rates of Income tax (FY 2017-18 vs FY 2018-19)
Persons FY 2017-18 FY 2018-19 Change
RESIDENT Individuals (>= 80 years)
0 – 5,00,000 0% 0% No Change
5,00,001 – 10,00,000 20% 20% No Change
Above 10,00,000 30% 30% No Change
Important Points:
• Rebate under Section 87A is available to a RESIDENT INDIVIDUAL having total income
upto Rs. 3.50 lakhs. The amount of rebate shall be 100% of tax or Rs. 2,500 whichever is
lower. Further, rebate shall be given before charging any Cess.
• Cess for FY 2017-18 is 3% (EC & SHEC) and for FY 2018-19 is 4% (HEC).
• TDS is required to be deducted including Surcharge & Cess in case of Non-Resident.
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10. Rates of Income tax (FY 2017-18 vs FY 2018-19)
Important Points continued:
• Rates of Surcharge:
Particulars Surcharge
(FY 17-18)
Surcharge
(FY 18-19)
Change
Income upto Rs. 50 lakhs 0% 0% No Change
Income > Rs. 50 lakhs < = Rs. 1 crore 10% 10% No Change
Income > Rs. 1 crore 15% 15% No Change
• Surcharge is chargeable on Tax whereas Cess is to be charged on Tax plus surcharge.
• Surcharge is used by the Government for construction of National Highways.
• Income here means Total Income and not Gross Total Income.
• Marginal Relief is available from the Surcharged tax.
• The above discussion is based on Part-I & Part-III of the 1st Schedule to Finance Bill, 2018.
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11. Rates of Income tax (FY 2017-18 vs FY 2018-19)
Effective Tax for Individuals:
Particulars F.Y. 2017-18 F.Y. 2018-19 Budget +/(-)
Income upto Rs. 2.50 lakhs NIL NIL NIL
Income upto Rs. 3.00 lakhs NIL NIL NIL
Income of Rs. 3.50 lakhs 2,575 2,600 +25
Income of Rs. 5.00 lakhs 12,875 13,000 +125
Income of Rs. 10.00 lakhs 1,15,875 1,17,000 +1,125
Income of Rs. 50.00 lakhs 13,51,875 13,65,000 +13,125
Income of Rs. 1 crores 31,86,563 32,17,500 +30,937
Income of Rs. 10 crores 3,53,12,906 3,56,55,750 +3,42,844
• The above rates will change in case of resident aged > = 60 years.
• The above figures are after considering rebate, surcharge and cess.
• Rounding off u/s 288A and 288B has been ignored in the above calculation.
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12. Rates of Income tax (F.Y. 2017-18 vs. F.Y. 2018-19)
COMPANIES:
Persons F.Y. 2017-18 F.Y. 2018-19 Change
Domestic Companies
Turnover > Rs. 50 cr. in FY 15-16 & > Rs. 250 cr. in FY 16-17 30% 30% No
Turnover > Rs. 50 cr. in FY 15-16 & <= Rs. 250 cr. in FY 16-17 30% 25% Yes
Turnover < Rs. 50 cr. in FY 15-16 & > Rs. 250 cr. in FY 16-17 25% 30% Yes
Turnover < Rs. 50 cr. in FY 15-16 & <= Rs. 250 cr. in FY 16-17 25% 25% No
Foreign Companies
Tax Rate 40% 40% No
(irrespective of turnover)
• Domestic Company means a Company which is an Indian Company OR any other Company
which has made prescribed arrangements for declaration and payment of dividend in India.
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13. Rates of Income tax (F.Y. 2017-18 vs. F.Y. 2018-19)
COMPANIES
• Rates of Surcharge:
Particulars Surcharge
(FY 17-18)
Surcharge
(FY 18-19)
Change
Domestic Company
Income exceeds Rs. 1 crore upto Rs. 10 crores 7% 7% No Change
Income exceeds Rs. 10 crores 12% 12% No Change
Foreign Company
Income exceeds Rs. 1 crore upto Rs. 10 crores 2% 2% No Change
Income exceeds Rs. 10 crores 5% 5% No Change
• Surcharge is chargeable on Tax whereas Cess is to be charged on Tax plus surcharge.
• Surcharge is used by the Government for construction of National Highways.
• Marginal Relief is available from the Surcharged tax.
• The above discussion is based on Part-I & Part-III of the 1st Schedule to Finance Bill, 2018.
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14. Rates of Income tax (F.Y. 2017-18 vs. F.Y. 2018-19)
OTHER ASSESSEES
• Tax rate of 30% is applicable to Partnership Firms and LLPs.
• Surcharge @ 12% of tax is chargeable in case of Firms, LLPs if income > INR 1 crore.
• HUF/ AOP/ BOI/ AJP/ Trusts are chargeable at same rates as applicable to Individuals.
• No Change in rates of tax except Cess which has been increased from 3% in F.Y. 2017-18 to
4% in F.Y. 2018-19 in case of all assessees.
• Income received by member of HUF from HUF is exempt from tax in hands of member
under Section 10 since the same is appropriation of profits.
• Income received by Partner from Firm (except salary, interest, fee, commission etc.) is exempt
from tax in hands of Partner under Section 10 since the same is appropriation of profits.
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15. Amendments relating to Corporates
The Following amendments solely impact the tax liabilities of Corporates:
• Application of Dividend Distribution Tax (DDT/CDT) to Deemed Dividend – 115-O;
• Plugging of lacuna in case of Amalgamation – 2(22);
• Deductions from Income of Farm Producer Companies – 80P;
• Exemption on Sale of stock of crude oil by Foreign Company – 10(48B);
• Benefits to Companies under Insolvency Proceedings – Section 79 & 115JB;
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16. Application of DDT to Deemed Dividends
Provisions under the Act till Finance Act, 2017
• Section 115-O of the Income tax Act, 1961 (“the Act”) requires a Domestic Company to pay
dividend distribution tax (DDT) @ 20.3576% (including surcharge and cess) {WITH NEW
CESS, the rate is 20.5553%} in case of declaration of dividend to its shareholders.
• Section 115BBDA of the Act provides that in case of resident Individuals, HUF or Firm, if the
dividend (other than dividend under Section 2(22)(e) of the Act) is more than Rs. 10 lakhs to
a shareholder, then tax @ 10% will be charged from such shareholder. All other dividends
covered under Section 115-O are exempt from tax under Section 10(34) of the Act.
• 115-O further provides that DDT is not applicable to dividends referred to in Section 2(22)(e)
of the Act. Section 2(22)(e) provides that if a Closely held Company gives any Loan or
Advance (other than trade) to any of its beneficial shareholder holding 10% or more voting
power or to any concern in which such shareholder is substantially interested, then such
loans and advances shall be deemed to be dividend.
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17. Application of DDT to Deemed Dividends
Amendment made by Finance Bill, 2018
• Now, Section 115-O and related sections have been amended in order to provide that
dividends referred to in Section 2(22)(e) of the Act are also part of Section 115-O and
chargeable to DDT @ 30% (instead of 20.5553%).
• However, no change has been made in Section 115BBDA and Section 10(34) of the Act.
• Post Amendment, It can be inferred that:
Deemed Dividend u/s 2(22)(e) is chargeable to DDT @ 30% in hands of closely held co.
Since Section 115BBDA of the Act do not cover above dividend, hence the same is wholly
exempt from tax under Section 10(34) of the Act even exceeds Rs. 10 lakhs.
TDS under Section 194 of the Act is not required to be deducted since such dividend is
now covered under Section 115-O of the Act.
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18. Application of DDT to Deemed Dividends
Dividend 2(22)(e)
Transactions
undertaken upto
31.03.2018
Transactions
undertaken after
31.03.2018
In hands of Co. In hands of SH In hands of Co. In hands of SH
No DDT (Only TDS
@ 10% is required to
be deducted u/s S.194
if dividend exceeds
Rs. 2,500)
The same is taxable
at normal rates.
DDT @ 30%,
No TDS
Exempt from Tax
under Section 10(34)
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19. Plugging of lacuna in case of Amalgamation
The same can be understood with the help of following example:
Amalgamated
Company
(Loss Making)
Amalgamating
Company
(Profit Making)
Now, Suppose Amalgamated Company say “A Ltd.” has taken over Amalgamating Company
say “B Ltd” in the scheme of Amalgamation.
Since, B Ltd. is a profit making Company and hence, there will arise “Goodwill” (in most
situation) to A Ltd. post amalgamation (assuming in the nature of purchase). Now, while
reducing of capital by A Ltd., Section 2(22)(d) do not arise since A Ltd. is having losses even
after amalgamating B Ltd.
Before amendment, the shareholders of A Ltd. enjoy cash by reduction of capital without
implying Section 2(22)(d) of the Act.
Finance Bill, 2018 has made the amendment and provided that at the time of reduction of
capital by amalgamated company, accumulated profits of amalgamating company on
amalgamation date will also be included.
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20. Deductions from Income of Farm Producer Companies
New Section inserted for 100% deduction
A new Section 80PA has been inserted under the Act in order to provide that 100% of the
gross total income of Producer Company shall be exempt if following conditions are
satisfied:
Turnover in the relevant previous year is less than Rs. 100 crores;
Such Producer Company shall be engaged in marketing, processing of agricultural
produce of members, purchase of agricultural implements, seeds, livestock for the use of
members.
Deduction can be taken from FY 2018-19 to FY 2024-25.
Important Points
Producer Company means a body corporate having objects or activities in relation to
production, marketing, selling, export of agriculture produce of member, providing
machinery, education, consultancy to members in relation to production activities.
A separate chapter governs the formation and operations of a Producer Company under
Indian Company Law.
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21. Exemption on Sale of stock of crude oil by Foreign Company
The provisions of Section 10(48), 10(48A) and 10(48B) of the Income tax Act, 1961 exempts the
following Incomes of a foreign company:
Income received in India on account of Sale of crude oil as per the agreement approved by
the Central Government – Section 10(48).
Income accrue or arise in India on account of storage of crude oil in India and sale of
crude oil therefrom in India as per the agreement approved by Central Government –
Section 10 (48A).
Income accrue or arise in India on account of Sale of leftover stock after the expiry of
agreement approved by Central Government – Section 10 (48B).
Now Finance Bill, 2018 has made the amendment that even in case of termination of
agreement, exemption benefit under Section 10(48B) will be available to such foreign
company.
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22. Benefits to Companies under Insolvency Proceedings
Provisions before Amendment
The provisions of Section 79 of the Income tax Act, 1961 provides that NO LOSS can be
carried forward and set off in case of change in shareholding by more than 51% from the loss
year to set off year.
For Example, If Loss relates to FY 2015-16 which is tested for set off in FY 2018-19, at-least
51% of the voting power of shareholders must be same in both years.
Further, Section 115JB allows the benefit of brought forward losses OR Unabsorbed
depreciation (as per books), whichever is lower from the Book Profits computed under the
provisions of Minimum Alternate Tax (MAT).
Companies which are under the Insolvency proceedings are under a lose-lose situation due
to above two provisions since upon taken over by others, losses will be lapsed. Further, if
any of the loss or unabsorbed depreciation as per books is NIL, then there would be no
benefit under MAT.
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23. Benefits to Companies under Insolvency Proceedings
Amendment made by Finance Bill, 2018
Section 79 of the Act has been amended in order to provide that the provisions of Non Carry
forward of loss will not be applicable in case of a Company whose resolution plan has been
approved under Insolvency and Bankruptcy Code, 2016 (IBC, 2016).
For Example, If Loss relates to FY 2015-16 which is tested for set off in FY 2018-19, no testing
is required to be made for 51% criteria in case of Companies under Insolvency.
Section 115JB of the Act has been amended in order to provide that in place of “Lower of
Brought Forward Loss or Unabsorbed Depreciation”, “Aggregate of Brought Forward Loss
and Unabsorbed Depreciation” will be allowed to a Company whose resolution plan has
been approved.
This will benefit the acquisitions of Companies which are under the proceedings of IBC,
2016.
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24. Amendments in relation to Individuals
The Following amendments solely impact the tax liabilities of Individuals:
• Amendments made under the head Salaries –16 and 17
• Enhancement of quantum of deduction of Medical Insurance – 80D;
• Enhancement of quantum of deduction for specified disease – 80DDB;
• Interest Income of Senior Citizens – 80TTA and 80TTB;
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25. Amendments made under the head Salaries
Amendment made by Finance Bill, 2018 in Section 16 and Section 17
Finance Bill, 2018 has introduced Standard Deduction amounting to INR 40,000 from Gross
Salary as a benefit to the Salaried Employees. Now, total three deductions are available
under the head Salaries:
Deduction of Professional Tax Paid (for All Employees);
Deduction of Entertainment Allowance (only for Government Employees);
Standard deduction of INR 40,000 (for All employees).
It has further withdrawn the benefit of medical reimbursement which was earlier available
to the extent of INR 15,000. Further, Exemption upto INR 19,200 w.r.t. transportation
allowance for commuting between office and residence has also been withdrawn.
Hence, the benefit which has been given under the head Salaries is nominal i.e. Rs. 5,800.
Also, employee is not required to submit any bill as earlier in case of medical reimbursement.
Please note that amendments will apply for Salary Income earned from F.Y. 2018-19
onwards.
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26. Enhancement of quantum of deduction of Medical Insurance
Provisions applicable till F.Y. 2017-18
Deduction allowable to Individuals
Self + Spouse + Dependent Children : Rs. 25,000 or less.
AND
Father + Mother (Dependent or not) : Rs. 25,000 or less.
Increased deduction
In case the insurance is taken for resident Senior Citizen (>= 60 years), then deduction shall
be Rs. 30,000 for each of above instead Rs. 25,000. Further, in case of Super Senior Citizen
(age >= 80 years), medical expenditure upto Rs. 30,000 will also be allowed under this section
subject to overall limit.
Preventive health check-up
Expenditure incurred on preventive health check-up within above limit can be Rs. 5,000.
Permitted mode of payment
The payment shall be made otherwise than by Cash. Payment in cash for preventive health
check-up is permissible.
To HUF: Deduction allowable for any family member upto Rs. 30,000 (check-up not allowed)
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27. Enhancement of quantum of deduction of Medical Insurance
Amendment made by Finance Bill, 2018
Now, Section 80D of the Act has been amended in order to provide that the deduction in
respect of Senior Citizen will now be available with a new cap of INR 50,000 instead of INR
30,000.
Further, the benefit of deduction in respect of medical expenditure is also available in case of
Senior Citizen having age > = 60 years.
For HUF also, the deduction has been increased from INR 30,000 to INR 50,000.
However, the limit of INR 25,000 is intact for Individuals and family members in case the age
is < 60 years.
Post Amendment, the maximum deduction which can be allowed under this section can be
INR 1,00,000 if all the insured persons are Senior Citizens.
Further, amount paid for insurance taken for more than one year will now be allowed
proportionately.
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28. Enhancement of quantum of deduction for specified disease
Section Overview
Section 80DDB of the Act provides for a deduction to a resident Individual and HUF for
medical treatment of specified disease of dependent amounting to INR 60,000 in case of
Senior Citizen and INR 80,000 in case of Very Senior Citizen
Senior Citizen means Individual aged 60 years or more and Very Senior Citizen shall mean
Individual with age 80 years or more.
Specified disease includes Chorea, Cancer etc.
Amendment made by Finance Bill, 2018
Post Amendment, the deduction which can be allowed under this section can be INR 1,00,000
for any type of Senior Citizen.
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29. Interest Income of Senior Citizens
Section Overview
Section 80TTA of the Act provides that deduction amounting to INR 10,000 (maximum) is
allowed to an Individual or HUF for Interest Income earned on saving account.
Section 80TTA is not applicable on Interest Income earned on Fixed Deposits/ Time
Deposits.
Amendment made by Finance Bill, 2018
Now, Finance Bill, 2018 has inserted a new Section 80TTB in order to provide that Senior
Citizens are allowed a deduction of upto INR 50,000 in respect of Income earned by such
Senior Citizens from Deposits (Saving Account, Fixed Deposits and Time Deposits).
Further, in case of Senior Citizens, TDS will be deducted if the Income exceeds INR 50,000.
(Amendment made in Section 194A).
No deduction under Section 80TTA shall be allowed to such Senior Citizens.
Only those deposits are covered which are held with Banking Company, Post Office or Co-
operative Societies.
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30. Amendments in relation to Trust
Applicability of Section 40A(3), 40A(3A) and Section 40(a)(ia) in case of Trusts
Income of a religious and charitable trust registered under the Act is taxable under the head
“Other Sources”.
Now, Finance Bill, 2018 has made an amendment in order to provide that provisions of
Section 40A(3), 40A(3A) and 40(a)(ia) shall also apply to religious or charitable trusts.
Accordingly, no deduction is allowable for any expenditure:
Exceeding INR 10,000 made to a person in a day by cash mode; or
Payment of Outstanding Balance exceeding INR 10,000 to a person in a day by cash mode;
30% of the amount of expense will be disallowed in case such trust do not deduct any TDS
on payments being made to residents.
The same applies to trusts governed by Section 10(23C) and Section 11 & 12 of the Act.
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31. Amendments relating to ICDS
Income Computation and Disclosure Standards (ICDS) provides the accounting treatment to
be given to certain transactions under the head “PGBP” and “Other Sources”.
The provisions of ICDS have overruled certain judicial precedents given by Hon’ble Supreme
Court and various High Courts.
Hon’ble Delhi High Court in the case of writ petition filed by Chamber of Tax Consultants
(CTC) have struck down certain provisions of the ICDS ruling that the same cannot overrule
the landmark judgments given by various courts. The reason for such struck down is that the
provisions of ICDS have been introduced vide Rules which have been framed by Central
Board of Direct Taxes (CBDT) and do not have any statutory backing from parliament.
Finance Bill, 2018 has made some amendments under the Income tax Act, 1961 in order to
give the statutory backing to the treatment prescribed by ICDS.
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32. Amendments relating to ICDS
Some new sections and provisions have been inserted which have concluded the treatments
as below:
Mark to Market loss computed in accordance with ICDS shall be allowed as deduction
from the Income under PGBP – Section 36(1)(xviii).
Foreign Exchange Gains/Losses arising on account of change in rates of exchange shall be
allowed as deduction in accordance with ICDS. This means that loss and gains of capital
nature other than Section 43A are also taxed or allowed as deduction in the year of
realization or restatement, as the case may be – Section 43AA.
Income from Construction Contracts or Service Incomes shall be determined as per
percentage of completion method (PCM) (except service contracts for a period of upto 90
days which can be recognized on full completion)– Section 43CB;
Inventory shall be valued at Cost or NRV whichever is lower computed in manner as per
ICDS – Section 145A.
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33. Amendments relating to ICDS
ICDS continued:
Listed Securities shall be valued at Cost or NRV whichever is lower (in case held as stock)
- Section 145A
Unlisted/ Unquoted Securities shall be valued at initial cost – Section 145A.
Interest on compensation or enhanced compensation shall be taxable on receipt basis –
Section 145B
Escalation claims and Export incentives shall be recognized as Income when reasonable
certainty is achieved – Section 145B.
Subsidy, Grant, Cash Incentives, Duty Drawback etc. are recognized as Income of the year
in which such amount is received – Section 145B.
The amendments are retrospective and applicable from FY 2016-17 onwards.
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34. Amendments having impact on Foreign Currency Inflows
Amendment relating to Presence of Digital Companies and Dependent Agents
Before Amendment, what we see is only physical presence of Non-resident or his
dependent agent for the purpose of determining Income accruing or arising in India.
Finance Bill, 2018 has made an amendment under Section 9 of the Act in order to provide
that significant economic presence will also be deemed as “Business Connection” for the
purpose of Section 9.
Significant Economic Presence means transactions in respect of goods, services or
property carried out by a non-resident in India including downloading of software etc. if
such transactions exceed the prescribed amount OR by way of soliciting or interacting
with prescribed users by digital means.
Amendment has been made for extending the dependency of agent not only who
concludes contracts but also who substantially negotiates contracts on behalf of Non-
resident.
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35. Amendments having impact on Foreign Currency Inflows
Long-term Capital Gain to FIIs
Before Amendment, Section 10(38) exempts the income of any person arising from long-
term capital gains on sale of listed shares, units of equity oriented fund etc. The same also
includes LTCG of FIIs from such securities.
Finance Bill, 2018 has made an amendment under Section 115AD of the Act in order to
provide that 10% tax will be levied in case such LTCG exceeds Rs. 1 lakh.
The other discussion of Section 112A of the Act by which section such amendment has
been introduced has been discussed under Common Topics.
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36. Common Amendments
The amendments which are not related to a specific person are as follows:
Introduction of LTCG tax on Sale of Listed Securities – Section 112A.
Introduction of DDT on dividend paid by MF on Equity Oriented Units – Section 115R.
Incentives for Employment generation – Section 80JJAA
Rationalization of Section 43CA, Section 50C and Section 56.
Provisions relating to conversion of stock in trade into capital asset .
36EWE Classes
37. Common Amendments
Other Common Amendments:
Amendment under presumptive taxation in case of goods carriage – Section 44AE.
Measures to Promote Start-ups – Section 80-IAC.
Mandatory Application of PAN in certain cases – Section 139A.
Trading in agriculture commodities – Section 43(5)
New Scheme for Scrutiny Assessment – Section 143.
Prosecution relating to failure to furnish return of income – Section 276CC.
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38. Introduction of LTCG tax on Sale of Listed Securities
Long-term and Short-term criteria (Section 2(42A)):
12 months criteria:
Listed Shares & Debentures.
Units of UTI.
Units of Equity Oriented Fund.
Zero Coupon Bond.
24 months criteria:
Unlisted Shares.
Immovable Property.
36 months criteria:
All other assets including units of debt owned funds.
We will discuss in this topic tax implications of LTCG on listed shares, Units of Equity
Oriented Fund.
38EWE Classes
39. Introduction of LTCG tax on Sale of Listed Securities
Before amendment, Section 10(38) of the Act provides that LTCG arising on transfer of listed
equity shares or units of equity oriented fund is exempt from tax provided:
STT has been paid; and
transaction of both purchase and sale has been taken on recognized stock exchange.
In order to take the same under tax net, Finance Bill, 2018 has introduced Section 112A of
the Act in order to provide that:
Tax @ 10% of the LTCG shall be charged.
The tax will be charged only if LTCG of such nature exceeds Rs. 1 lakh.
No Benefit of indexation shall be allowed on such gains.
No tax will be levied if the sale has been made till March 31, 2018 since the budget is
applicable from April 01, 2018.
If the asset is acquired on or after February 01, 2018, actual cost will be considered for the
purpose of calculation.
39EWE Classes
40. Introduction of LTCG tax on Sale of Listed Securities
If the asset is acquired on or before January 31, 2018, then cost of acquisition shall be
Actual Cost of Acquisition; OR
Lower of Sale Value or Fair Market Value;
Whichever is higher.
The restriction upto “lower of sale value” is provided so that no long term capital loss shall
arise on such computation.
Example:
Investment
Amount
Investment
Date
Redemption
Amount
Redemption
Date
Taxability
2,00,000 31.01.2017 3,60,000 28.03.2018 Not Taxable
2,00,000 31.03.2017 4,00,000 03.04.2018 10% of Gain
1,00,000 25.06.2017 1,90,000 30.06.2018 Not Taxable
2,00,000 15.01.2018 3,50,000 31.08.2018 15% u/s Section 111A
3,00,000 10.12.2017 4,20,000 15.12.2018 10% of Gain
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41. DDT on dividend paid by MF on Equity Oriented Units
Section overview
Section 115R of the Income tax Act, 1961 provides that a Mutual Fund is required to pay DDT
on dividend distributed by it to the unit holders at the rate of:
38.83% (25% plus Surcharge plus Cess after grossing up)
- Income distributed to Individual or HUF.
49.92% (30% plus Surcharge plus Cess after grossing up)
- Income distributed to any other person.
Section further provides that no DDT is required to be paid in respect of amounts paid to
holders of units of equity oriented funds.
Amendment made by Finance Bill, 2018
Finance Bill, 2018 has made an amendment under the Act in order to provide that the
amount paid to holders of units of equity oriented funds shall be chargeable to DDT @
12.94%. (i.e. 10% plus Surcharge plus Cess after grossing up).
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42. Incentives for Employment Generation
Deduction under Section 80JJAA of the Act is allowed to a Tax Audit assessee.
Deduction is allowed @ 30% of the additional employee cost incurred during the previous
year for 3 consecutive years i.e. total 90% deduction will be allowed under this Section.
Deduction is allowed only if the following conditions are satisfied:
There should be an increase in number of employees in current year vis-à-vis preceding
financial year.
Salary or wage shall be paid other than cash mode.
Only those employees will be treated as additional employees:
Whose salary is upto INR 25,000; AND
Contributing in provident fund; AND
Employed for 240 days or more in the year (150 days or more for apparel industry).
Finance Bill, 2018 has made an amendment to Section 80JJAA of the Act in order to provide
that benefit of 150 days or more will also be available to shoes and leather industry.
Further, Employed days (240/150) can be completed subsequent to joining year also.
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43. Rationalization of Section 43CA, Section 50C and Section 56
Section 43CA: It provides that in case the consideration for transfer of stock in trade, being
land or building, is less than the stamp duty value, then Stamp Duty Value shall be deemed
to be the sale price of such stock - Section for PGBP.
Section 50C: It provides that in case the consideration received or receivable from transfer of
a capital asset, being land or building, is less than the stamp duty value, then Stamp Duty
Value shall be deemed to be the full value of consideration – Section for Capital Gains.
Section 56(2)(x): It provides that in case a person receives any immovable property at a value
less than the stamp duty value by INR 50,000, then the balance shall be treated as Income
from other sources - Section for Other Sources.
Finance Bill, 2018 has made an amendment under the above sections in order to provide that
difference upto 5% between actual consideration and stamp duty value shall be ignored.
The amendments are effective from F.Y. 2018-19 onwards.
43EWE Classes
44. Provisions relating to conversion of stock into capital asset
Income tax law currently provides provisions for conversion of capital asset into stock in
trade. The taxability in such cases shall be as under:
Fair Market Value on the date of conversion shall be the full value of consideration to be
taken for capital gains purpose.
Actual Cost of capital asset shall be taken as the cost of acquisition of such stock.
Period of holding will be the period starting from acquisition date to conversion date.
The Capital Gains are taxable in the year in which stock will be sold.
Amendment: New Provisions have been introduced for the vice-versa cases of conversion of
stock-in-trade into capital assets. The taxability in such cases shall be as under:
The Fair Market Value on the date of conversion shall be deemed to be the Sale price
under the head PGBP.
Cost will be considered as actual cost of purchase of stock-in trade.
44EWE Classes
45. Other Common Amendments
Amendment under presumptive taxation scheme in case of Goods Carriage – Section 44AE
Section 44AE of the Act provides a presumptive taxation scheme for the transporters having
upto ten (10) vehicles at any time during the previous year. It provides that such transporters
have an option to declare Income @ 7,500 per month or part thereof per vehicle.
Finance Bill, 2018 has made an amendment in Section 44AE of the Act in order to provide
that for vehicles having more than 12MT gross weight, then instead of INR 7,500 per month
per vehicle, INR 1,000 per tonne capacity per month per vehicle shall be deemed as Income.
Measures to Promote Start-ups
Section 80-IAC of the Income tax Act, 1961 provides 100% deduction to start-ups for 3
consecutive years out of seven years if it is incorporated between 01.04.2016 to 31.03.2018 and
the turnover is upto INR 25 crores per year between 01.04.2016 to 31.03.2021.
Finance Bill, 2018 has made an amendment in order to provide that start-ups incorporated
between 01.04.2019 to 31.03.2021 can also avail the benefit of this Section. Further, turnover
limit of INR 25 crores is applicable for first seven years from start date. Start-up can be of
such type which can generate employment or create wealth substantially.
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46. Other Common Amendments
Mandatory Application of PAN in certain cases
Section 139A of Act has been amended in order to provide that:
PAN is mandatory for such non-individual entities which enters into financial transaction
valuing more than INR 2.50 lakhs.
PAN is also mandatory for the authorized signatories of such entities irrespective of their
financial transactions and income.
Trading in Agriculture Commodities
Amendment has been made under Section 43(5) of the Act in order to provide that trading in
agriculture commodities will also be considered as non-speculative transaction instead of
speculative transaction.
Post Amendment, loss from trading in agricultural commodities can also be set off from
other non-speculative business losses.
Further, such loss can now be carried forward for 8 AYs instead of 4 AYs.
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47. Other Common Amendments
New Scheme for Scrutiny Assessment
The Government is introducing e-assessment scheme for all assessment proceedings under
the Act.
Section 143 have been amended in order to give power to the CG for new scheme which will
be laid down as soon as may be in Parliament.
Prosecution relating to failure to furnish return of income
Section 276CC of the Act provides that in case an assessee fails to furnish ROI upto the end of
assessment year, then he shall be liable to following:
Imprisonment of 6 Months – 7 Years with fine: If tax evaded exceeds INR 25 lakhs;
Imprisonment of 3 Months – 2 Years with fine: If tax evaded is upto INR 25 lakhs.
The above provisions are not applicable if tax amount is less than INR 3,000.
Finance Bill, 2018 has made an amendment under the Act in order to provide that the limit of
INR 3,000 is not applicable to a Company in order to mandate all companies to file ROI.
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49. Amendments under the Indirect Tax Laws
Since GST Council takes decisions in relation to Goods and Service Tax (GST) Law, no
amendment has been brought in by the Hon’ble Finance Minister in Financial Bill, 2018 in
respect of GST law.
However, certain amendments have been made under Excise Laws, Service tax Laws and
Custom Laws.
Amendments under the Service tax Law have been made for some issues relating to pre GST
regime. For example, services given by GSTN to Government is proposed to be exempt from
service tax for the period between 28.03.2013 to 30.06.2017.
Amendments made under the Excise laws are on account of some contra adjustments in
relation to levy of Excise Duty on Petrol and Diesel resulting into insignificant impact.
Central Board of Excise and Customs (CBEC) has been renamed as “ Central Board of
Indirect taxes and Customs (CBIC)
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50. Amendments under the Indirect Tax Laws
Major changes in Custom Duty rates are as follows:
Particulars Before Budget After Budget
Beauty Products 10% 20%
Mobile Phones 15% 20%
All types of Imported Watches 10% 20%
Imported furniture 10% 20%
Sunglasses 10% 0%
CKD (Completely Knock Down) Imports of vehicles 10% 15%
CBU (Completely Build Units) Imports of vehicles 20% 25%
EC and SHEC (Cess) 3% 0%
Social Welfare Surcharge (SWS) 0% 10%
SWS on Gold, Silver and Motor Spirit 0% 3%
Note: EC & SHEC earlier chargeable on BCD have been abolished. A new levy Social Welfare
Surcharge is levied on Custom Duty w.e.f. FY 2018-19 as above.
50EWE Classes
51. THANK YOU
Content Prepared by:
Team EWE
EWE Classes
G-31A, G Block, Near Aruna Park, Shakarpur, New Delhi-110092
Phone: +91-8506049347, 9654977731, Mail: eweclasses@gmail.com
Disclaimer:
The above presentation has been prepared based on Finance Bill, 2018. The examples and analysis given are solely the opinion of
the author. Please check the same with the bare law before applying any provision to any particular case. Author will not have any
responsibility w.r.t. any gains/losses due to adopting authors’ opinion.
Pratibha Rathore
[CA, B.Com]
Yogesh Raheja
[CA–AIR 6, CS, B.Com]
TEAM EWE:
Bipin Jha
[CA, CS, B.Com]
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