Apr 252018
 

Reduction of corporate income tax rate to 25%

  1. Tax Rate for Companies

E.1 Domestic Company

The rates of income-tax in the case of companies have been specified in Paragraph E of Part III of the First Schedule to the Bill. In case of domestic company, the rate of income-tax shall be twenty five per cent. of the total income if the total turnover or gross receipts of the previous year 2016-17 does not exceed two hundred and fifty crore rupees.

Surcharge at the rate of seven per cent. shall continue to be levied in case of a domestic company if the total income of the domestic company exceeds one crore rupees but does not exceed ten crore rupees. Surcharge at the rate of twelve per cent. shall continue to be levied if the total income of the domestic company exceeds ten crore rupees.

E.2 Other than domestic company:

In all other cases the rate of Income-tax shall be thirty per cent. of the total income. In the case of company other than domestic company, the rates of tax are the same as those specified for the financial year 2017-18.

In case of companies other than domestic companies, the existing surcharge of two per cent. shall continue to be levied if the total income exceeds one crore rupees but does not exceed ten crore rupees. Surcharge at the rate of five per cent. shall continue to be levied if the total income of the company other than domestic company exceeds ten crore rupees.

However, the total amount payable as income-tax and surcharge on total income exceeding one crore rupees but not exceeding ten crore rupees, shall not exceed the total amount payable as income-tax on a total income of one crore rupees, by more than the amount of income that exceeds one crore rupees.

The total amount payable as income-tax and surcharge on total income exceeding ten crore rupees, shall not exceed the total amount payable as income-tax and surcharge on a total income of ten crore rupees, by more than the amount of income that exceeds ten crore rupees.

In other cases (including sections 115-O, 115QA, 115R, 115TA or 115TD), the surcharge shall be levied at the rate of twelve per cent.

For financial year 2018-19, additional surcharge called the “Health and Education Cess on income-tax” shall be levied at the rate of four per cent. on the amount of tax computed, inclusive of surcharge (wherever applicable), in all cases. No marginal relief shall be available in respect of such cess.

Impact analysis:

Thus, there have been given a great relief to domestic company by reducing tax rate to 25% based on their turnover for previous year 2016-17. The provisions are briefly explained as below:

Gross receipts / Turnover Tax rate for previous year 2018-19 Tax rate for previous year 2017-18
249 crore 25% of total income of any limit of turnover 30% of total income
250 crore 25% of total income of any limit of turnover 30% of total income
251 crore 30% of total income 30% of total income

 

Thus, turnover of 31st March 2017 needs to be observed to decide the tax rates for financial year 2018-19 which anyway going to be assessed in assessment year 2019-20.

However, there is not change in tax rates for the assessment of income for year 2017-18 and which is going to be assessed in 2018-19. This is a welcome move as this will benefit lot of small turnover company.

Apr 122018
 

Provisions in finance bill 2018 as to provident fund (Part 1 of chapter VIII):

AMENDMENTS TO THE GOVERNMENT SAVINGS BANKS ACT, 1873

Clause111. The provisions of this Part shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.

Clause 112. In the Government Savings Banks Act, 1873 (hereafter in this Part referred to as the principal Act), for the long title, the following shall be substituted, namely:––

“An Act to regulate and channelise the savings from general public into Government Savings Schemes.”

Clause 3A. (1) The Central Government may, by notification in the Official Gazette, frame new Savings Schemes or amend or discontinue existing Savings Schemes to promote household savings in the country.

Clause 131. After section 15 of the principal Act, the following shall be inserted, namely:––

“16. (1) The Government Savings Certificates Act, 1959 and the Public Provident Fund Act, 1968 are hereby repealed.

(2) Notwithstanding such repeal and without prejudice to the provisions contained in the General Clauses Act, 1897, with respect to repeals––

(a) anything done or any action taken or purported to have been done or taken, including any rule, notification, order or notice made or issued or any direction given under the repealed enactments shall be deemed to have been done or taken under the corresponding provisions of this Act;

(b) subject to the provisions of clause (a), any instrument executed or certificate issued, or anything done under or in pursuance of any repealed enactment shall, if is in force at the commencement of Part I of Chapter VIII of the Finance Act, 2018, continue to be in force in so far as it could have been executed, or issued or done under or in pursuance of such Part, shall have effect as if the same has been executed, issued or done under or in pursuance of the provisions contained in the aforesaid Part;

(c) all deposits made or accounts or certificates held under the repealed enactments shall be deemed to be deposits or holdings in the Savings Scheme made under the corresponding provisions of this Act; and

(d) any proceeding under the repealed enactments pending immediately before the commencement of Part I of Chapter VIII of the Finance Act, 2018 before any court shall, subject to the provisions of this Act, continue to be heard and disposed of by the said court.

(3) The repeal shall not prejudicially affect the interest of depositors who, before the commencement of Part I of Chapter VIII of the Finance Act, 2018, made deposits or were issued certificates or made contribution to any scheme under the repealed enactments.

Meaning of existing saving schemes that will converted into Government Savings Promotion Act, 1873:

  1. Post Office Savings Account
  2. National Savings Monthly Income (Account)
  3. National Savings Recurring Deposit
  4. Sukanya Samridhhi Account
  5. National Savings Time Deposit (1 year, 2 years, 3 years and 5 years)
  6. Senior Citizens’ Savings Scheme
  7. Savings Certificates:—
    • Kisan Vikas Patra (discontinued from 1st December, 2011 and restarted from 23rd September, 2014);
    • National Savings Certificates (VIII Issue).
  8. Public Provident Fund Scheme.

Discontinued Savings Schemes:

  1. National Savings Scheme, 1987
  2. National Savings Scheme, 1992
  3. Block Deposit Account
  4. Defence Savings Account
  5. Gift Coupons
  6. Cumulative Time Deposit Accounts:— (a) 5-year account (b) 10-year account (c) 15-year account
  7. 5-year Prize Bonds
  8. 5-year Premium Prize Bonds
  9. 5-year Compulsory Deposit Account Scheme, 1963
  10. 5-year Fixed Deposit Account
  11. 5-Year Cash Certificates
  12. 10-Year Defence Savings Certificates
  13. 12-Year National Savings Certificates
  14. 7-Year National Savings Certificates
  15. 5-Year National Savings Certificates
  16. 10-Year Treasury Savings Deposits Certificates
  17. 15-Year Annuity Certificates (I series)
  18. 10-Year National Plan Savings Certificates
  19. 10-Year Treasury Savings Deposits Certificates
  20. 12-Year National Plan Savings Certificates
  21. 15-Year Annuity Certificates (II series)
  22. 10-Year Defence Deposit Certificates
  23. 12-Year National Defence Certificates
  24. 10-Year National Savings Certificates (I-Issue)
  25. 7-Year National Savings Certificates (Il Issue)
  26. 7-Year National Savings Certificates (III-Issue)
  27. 7-Year National Savings Certificates (IV-Issue)
  28. 7-Year National Savings Certificates (V-Issue)
  29. 12-Year National Savings Annuity Certificates
  30. 5-Year National Development Bonds
  31. 6-Year National Savings Certificates (VI-Issue)
  32. 6-Year National Savings Certificates (VII-Issue)
  33. 10-Year Social Security Certificates
  34. Indira Vikas Patras
  35. 10-Year National Savings Certificates (IX Issue).

Impact analysis:

  1. All deposits under existing saving schemes will automatically converted into and come under the Government Savings Promotion Act, 1873.
  2. Interest of existing customers’ are not prejudicially hearted in terms of interest rates and deduction from taxable income in computing tax bills.
  3. However, PPF currently enjoys the freedom from court attachment (but not attachment under any order of income tax and estate duty authorities), i.e., the balance to the credit of a subscriber in his account is not subject to attachment under any order or decree of a court in respect of any debt or other liability incurred by him. This provision may not exist as the PPF Act itself is being repealed.
  4. Furhter, information about above investment does not reach automatically to income tax department via AIR but henceforth since these come under Government Savings Promotion Act and hence criteria based information of above investment will reach to income tax department.
Apr 022018
 

Due dates for the Month of April 2018
10th
GST
- Details of outward supplies of taxable goods and/or services effected – GST1 for March
– Return for authorities deducting tax at source – GSTR 7 for March
– Details of supplies effected through e-commerce operator and the amount of tax collected –
GSTR 8 for March
13th
GST
– Return for Input Service Distributor – GSTR 6 for March
15th
Provident Fund
- PF Payment for March
ESIC
- ESIC Payment for March
15th
GST
- Details of inward supplies of taxable goods and/or services effected claiming input tax credit – GSTR 2 for March
18th
GST
- Return for compounding taxable person – GSTR 4 for January to March
20th
GST
- Monthly return on the basis of finalisation of details of outward supplies and inward supplies along with the payment of amount of tax – GSTR 3 for March
– Return for Non-Resident foreign taxable person – GSTR 5 for March
28th
GST
- Details of Inward Supplies to be furnished by a person having UIN and claiming refund – GSR 11 for March.
30th
Profession Tax
- Monthly Return (covering salary paid for the preceding month) (Tax Rs. 50,000 or more)
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