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If you’re looking to buy a luxury or a premium car, you may like to wait until the goods and services tax is implemented. The potential benefit: Taxes will be about four to 12 percentage points lower. That’s because indirect taxes such as excise duty, value added tax, state level taxes such as Octroi, local body tax and cesses get subsumed into the goods and services tax (GST), and cess on luxury cars get capped. Yet, a cheaper car is not a given, since firms may raise prices and states could impose a new cess, tax experts at consulting firms said. Cars longer than four metres and an engine size above 1,500cc are classified as luxury cars. Such models currently attract a basic excise duty of 27%. It’s not only locally assembled models of luxury carmakers, including Mercedes Benz India Pvt Ltd, Audi India Pvt Ltd and BMW India Pvt Ltd, that are set to get a boost under the new tax regime, but premium models will also benefit from the new tax structure. For small cars, the GST is g...

The passage of the Finance Bill, 2017, by the Lok Sabha on March 22 has rekindled the widespread debate over using a Money Bill to amend other pieces of legislation in the financial and general sphere. First introduced on February 1, the Bill has come under the scanner with critics voicing opinions on its all-pervasive nature and attempts by the BJP-led government to muscle changes into the legal framework without the nod of the upper house. Finance Bills are annual features of Indian parliamentary democracy, used to adjust rates of taxation and bring changes in the fiscal structure. However, what makes the Finance Bill, 2017, unique is the sheer extent of the legislative changes proposed. The amendment of around 40 central statutes, many of which would have a tough time being classified as Money Bills if introduced separately, has taken this year’s exercise into highly uncharted territory. Modifications making the Aadhaar mandatory for filing tax returns, capping cash transactio...

10 groups set up under senior taxmen to examine issues and report by April 10 As India gets ready for its biggest tax reform in decades, industries such as ecommerce, banking and insurance, logistics and others will get another chance to resolve any niggles they have with the goods and services tax (GST), which the government wants to put in place by July 1. Ahead of the introduction of GST-related legislation in Parliament this week, the government has set up 10 groups to iron out sectoral issues faced by trade and industry to ensure a smooth transition to the new regime with just a little over three months to go. The President gave his assent to the four GST laws last week, paving the way for their introduction in Parliament. The groups have been set up under senior tax officials to examine the concerns of industry and submit reports by April 10. A senior government official told ET that most issues have been addressed through feedback but it was felt some sectors having sp...

The Aadhaar debate is into its final stages. While the Supreme Court is yet to make it mandatory, the government is flexing its muscles by linking various services to it and forcing citizens to fall in line. The government’s latest salvo comes in the recently-passed Finance Bill -- Unique Identification Authority of India (UIDAI)-backed Aadhaar cards will now be mandatory for filing income tax returns. And if a person does not link his Permanent Account Number or PAN card with Aadhaar, his PAN will be rendered invalid after July 1, 2017. Following this, the Department of Telecom has also made it mandatory to link mobile numbers to Aadhaar. It issued a note saying that all telecom operators will have to ensure that their subscribers link mobile numbers to Aadhaar within a year. If you do not have an Aadhaar number, you will have to submit the enrolment number of your application for Aadhaar. “In case of failure to intimate the Aadhaar number, the PAN allotted to the person shall...

The tax department will waive interest liability if the principal demand of capital gains tax is paid by companies like Cairn India and Vodafone plc. The Central Board of Direct Taxes (CBDT) on March 24 issued a circular for waiver of interest in disputed tax demand in different scenarios. In cases where tax liability arose because of retrospective amendment to the law or a court ruling, the interest payable on the demand will be waived, it said. "However, no reduction or waiver of such interest shall be ordered unless the principal demand... stands fully paid or satisfactory arrangements for payment of the principal demand have been made," CBDT guidelines to Chief Commissioner of Income Tax and Director General of Income Tax said. The guidelines came seven weeks after the Direct Tax Dispute Resolution Scheme, announced by Finance Minister Arun Jaitley on February 28 last year, closed. The scheme, which closed on January 31, provided for waiver of interest and penal...

To encourage more individuals to file returns and widen the tax net, the government is set to introduce a single-page income tax (I-T) return form from April 1. This will be for those with annual salaried income up to Rs 50 lakh, much higher than Rs 5-lakh limit proposed in the Union Budget, Revenue Secretary Hasmukh Adhia told Business Standard. He added this would only be for those with salaried and one house rent income. There are 290 million PAN card holders (the I-T dept identification) but only 60 mn return filers. Currently, the I-T form is three pages. It was simplified two years ago, when a controversial provision for mandatory disclosure of foreign trips and dormant bank accounts was removed. “To expand the tax net, I also plan to have a simple one-page form to be filed as I-T Return for the category of individuals having taxable income up to Rs 5 lakh, other than business income,” Finance Minister Arun Jaitley had announced in the 2017-18 Budget. Of the 7.6 mil...

The financial year is drawing to a close, and if you are still scurrying about to save on taxes, here is the harsh truth: you have made a classic financial mistake. Tax planning needs to be incidental to financial planning and you need to adopt a proactive approach to both. For now, let’s look at your options. Today, we shall focus on health insurance which qualifies for tax deduction under section 80D. Under section 80D, the premiums paid towards a health insurance policy for self or family can be claimed as a deduction of up to Rs.25,000. If you also pay premiums for your parents who are not senior citizens—less than 60 years of age—then you can claim an additional deduction of Rs.25,000. So the total deduction that you can claim is Rs.50,000, which translates into a tax saving of Rs.15,450. For senior citizens, the deduction limit is Rs.30,000. But if you are buying a health insurance policy for your parents who are senior citizens then you can claim a deduction up to Rs.55,...

The groups have been asked to give suggestions on procedural simplifications and possible rate structure With the goods and services tax (GST) set to be rolled out from July 1, the government has set up 10 working groups to address the concerns of industry. The groups cover banking, telecom, exports, information technology, transport, textiles, MSMEs, gems and jewellery and services received and provided by the government. The groups have been asked to give suggestions on procedural simplifications and possible rate structure. The deadline of submitting reports by the groups is April 10. Some of the issues that would be tackled by the groups include how to handle services provided between establishments of the same entity without invoice or payment in certain sectors with high volumes of transactions when operations are spread across the country. The other matter is compliance challenges for small and medium sector in an automated environment, with end-to-end matching of invo...

The finance ministry on Friday held a meeting with bankers to discuss ways to use excess liquidity in the system. There was consultation on introduction of standing deposit facility (SDF). While some bankers agreed to it, others sought more time to assess the scheme, sources said. The SDF is a tool used for sucking out surplus liquidity without the need for a collateral in exchange. The demonetisation announced by prime minister Narendra Modi on November 8 has led to a huge surge in deposits, with scrapped notes of Rs 500 and 1,000 being parked with banks. According to various informal estimates, about Rs 14 lakh crore has come back into the banking system. High cash deposits have raised concerns about price rise at a time when the RBI is seeking to check inflation by changing its policy stance to neutral from accommodative. Wholesale inflation soared to a 39-month high of 6.55 per cent in February and retail inflation inched up to 3.65 per cent due to higher food and fue...

Hundreds of crores of rupees in the form of taxes ride on the exact categorisation of products Is Parachute hair oil or edible oil? Is KitKat a chocolate or a biscuit? Is a Vicks tablet medicament or confectionery? For the taxpayer and the tax collector, this is much more than an exercise in semantics -hundreds of crores of rupees ride on the exact categorisation. As the government moves closer to rolling out the goods and services tax (GST) on July 1, many such distinctions are being debated so that no ambiguity remains. Not just that, the government is revisiting old tax cases that were lost over product categorisation, according to people with knowledge of the matter, presumably with a view to making sure that revenue collections can be maximised. “In the past, several tax officers had challenged some of the product categorisations, including those in the retail segment, but lost out in court or at appellate level,“ said one of the persons. “Now we have a chance to go ahead wi...

Nifty PSU Bank Index rises 3.3% on hopes of imminent solution to NPAs following FM's remark Public sector banks were the toast of Dalal Street in an otherwise listless trade on Friday as finance minister Arun Jait ley's remarks on an imminent so lution to the growing asset quality problems enthused traders. Trad ers rushed to cover short posi tions in these stocks and the Nifty PSU Bank Index rose 3.3%. Gains in PSU banks and even se lect private banks, which form around 30% of the benchmark Nifty weightage, propelled the main Nifty index back above the 9100 mark. The Nifty closed a 9108, up 21.70 points, or 0.2%, and the Sensex ended 89.24 points, or 0.3%, higher at 29421.40 points. Money managers said the mo mentum can lead to more gains in the PSB sector in the next few days but added that sustainability over the time would depend on the steps the government announces. “For PSU banks to outperform market we need permanent solution for non-performing assets, administr...