Mukesh Patel.in
practical tax & investment planning online
international tax expert / columnist / author / speaker

NIGHTMARE FOR PROPERTY BUYERS!

FM thrusts onerous obligation of deducting TDS on all purchasers of immovable property over Rs.50 lakhs 

The taxing proposal, which came to be announced by Pranab Mukherjee in his Budget proposals in February, 2012, but soon came to be rolled back, when he realized its harsh implications, has quite astonishingly been sneaked in once again by P. Chidambaram in the Finance Bill, 2013.

 ILLOGICAL JUSTIFICATION

Attempting to justify the reintroduction, the FM tried to explain in his Budget speech, “Transactions in immovable properties are usually undervalued and underreported.  One-half of the transactions do not carry the PAN of the parties concerned.  With a view to improve the reporting of such transactions and the taxation of capital gains, I propose to apply TDS at the rate of one percent on the value of the transfer of immovable property where the consideration exceeds Rs.50 lakhs.  However, agricultural land will be exempt.”

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FREEDOM FROM TDS

Filing of Forms 15G or 15H, subject to relevant conditions, can help you enjoy the benefit of no TDS!
  Although the net of tax deduction at source (TDS) has been considerably widened in the past few years, there are provisions to enable you to avail of no deduction of TDS from your income.

    Section 194A of the Income-tax Act provides for tax deduction at source (TDS) at 10% out of interest payments exceeding Rs.10,000 in a financial year.  However, with a view to grant relief to persons who are not under liability to pay any income-tax, special provisions have been made under Section 197A, which permit the benefit of no tax deduction even on interest payments exceeding Rs.10,000.   (more…)

COMPUTING TDS ON SALARY

Report all eligible exemptions & deductions to your employer to ensure non-deduction of excess TDS from your salary!

             Section 192 of the Income-tax Act prescribes for tax deduction at source out of payments representing any income chargeable to tax under the head ‘Salaries’. The provisions for tax deduction at source from Salaries during each Financial Year are explained by the Central Board of Direct Taxes (CBDT) under a special Circular.

             TDS under Section 192 is required to be calculated on the basis of the prevalent rates of income-tax on the estimated salary income and is required to be deducted on a proportionate basis at the time of each payment. For the said purpose the employer is required to consider various exemptions and deductions as prescribed under the Circular while computing the actual amount of income-tax to be deducted. (more…)

KBC – NO FREEDOM FROM TAX!

All winnings from Lottery or Games are taxed at flat rate of 30% & TDS is mandatory before Prize is handed over!

Though the popular TV Game Show KBC (Kaun Banega Crorepati) will launch its 5th Avataar on India’s 64th Independence Day 15th August, 2011, it will indeed be ironical that its prize winnings will enjoy ‘no freedom from tax.’ 

Participants receiving cheques signed by Big B for the full prize money as shown on your TV screen is mere hype, since no one really gets to take anything home before the taxman gets his pound of flesh (read tax) at a flat 30.9% from the same! (more…)

HOW TO ENSURE NO TAX DEDUCTION?

All you wanted to know about

TDS on Interest in Simple FAQs

Section 194A of the Income-tax Act provides for tax deduction at source (TDS) at 10% out of interest payments exceeding Rs.10,000 in a financial year.  However, with a view to grant relief to persons who are not under liability to pay any income-tax, special provisions have been made under Section 197A, which permit the benefit of no tax deduction even on interest payments exceeding Rs.10,000.  Answers to many frequently asked questions (FAQs) in relation to this special relief will prove to be both interesting and useful.

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TDS Becomes Less Taxing!

TDS Rates Rationalized

No Messy Computation Of Cess & Surcharge

 October 1, 2009, has also brought some welcome provisions of rationalization of TDS rates and reducing multiple classifications (see Box). (more…)

NRIs treated as Not Required Indians

Harsh, Illogical & Discriminatory Taxing Provisions For NRIs!

Proposals That Will Hurt The Global Indian Sentiment

Flat Rate of Tax

  • 20% flat tax on interest & other investment income.
  • 30% flat tax on all capital gains.
  • Apart from 20% & 30% TDS on above, TDS at a baffling rate of 35% prescribed on all residual income.

No Personal Exemption

  • No personal exemption or deduction allowed in computing the above income treated as ‘income from special sources.’

Weird Interpretation

  • Poor drafting leads to such a weird interpretation that transfer of a capital asset may attract 30% tax on gross sale consideration.

What a Discrimination?

  • Ironical but true! Non-Indian sports-persons, say Ricky Ponting or Shoaib Akhtar, required to pay a concessional tax of 10% on their game, advertisement and column earnings in India, thus enjoying a more privileged tax status than our own sons of the soil living abroad.

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