TAX GRIP

  The technical aspects of the scheme of Input Tax Credit (ITC) A.   Who can avail ITC? Any registered person can avail credit of tax paid on the inward supply of goods or services or both, which is used or intended to be used in the course or furtherance of business. B. What are the pre-requisites for availing credit by registered person? a. He is in possession of tax invoice or any other specified tax paying document. b. He has received the goods or services. “Bill to ship” scenarios also included. c. Tax is actually paid by the supplier. d. He has furnished the return. e. If the inputs are received in lots, he will be eligible to avail the credit only when the last lot of the inputs is received. f. He should pay the supplier, the value of the goods or services along with the tax within 180 days from the date of issue of invoice, failing which the amount of credit availed by the recipient would be added to his output tax liability, with interest [rule 2(1)...

Input Tax Credit   What is Input Tax Credit (ITC)? Input Tax Credit refers to the tax already paid by a person at time of purchase of goods or services and which reduce the tax on outputs. Amount Amount Tax on Output 500 Less: Tax paid on Purchase of A 150 Tax paid on Purchase of B 200 Tax paid on Purchase of C 100 450 Tax Payable 50   SGST,  UTGST,  CGST and IGST – How ITC Can be set off Amount of Input Tax Credit on IGST shall first be utilized for the payment of IGST then for payment of CGST and the balance, if any for the payment of SGST or UTGST. Amount of Input Tax Credit on account of CGST shall first be utilized for the payment of CGST then for payment of IGST. Such amount cannot be used for payment of SGST or UTGST. Amount of Input Tax Credit on account of SGST or UTG...

  Income Tax benefits on Home Loan   Deduction on Home Loan A home loan should be taken by an individual for purchase or construction of house property and the construction of the house property should be completed within 5 years from the date of availing loan. The EMI comprises of Ø Principal Amount Ø Interest on Home loan Deduction Under Section 80 C-Principal Amount Under this section, an individual is entitled to tax deductions on the amount paid as repayment of the principal component on the housing loan. An amount up to Rs.1.50 lakh can be claimed as tax deductions under Section 80C. However, the tax benefit on the repayment of the principal amount can be claimed only after the house is constructed. The section does not allow deductions for the repayment of the principal part during the years the house was being constructed. Deduction Under Section 24-Interest paid on Home Loan Under Section 24 of the Income Tax Act, an individual can claim...

Types Of GST - SGST, CGST, IGST and UGST There are four types of GST Ø SGST (State Goods and Service Tax) Ø CGST (Central Goods and Service Tax) Ø IGST (Integrated Goods and Service Tax) Ø UTGST (United Territory Goods and Service Tax)   SGST (State Goods and Service Tax) SGST or State Goods and Service Tax is a tax under GST regime that is applicable on intrastate (within the state) sale of goods or services. In case of an Intrastate transaction both CGST and SGST are levied equally. It is governed by the SGST Act. The revenue earned on SGST is solely claimed by the respective state government. E.g. If a manufacturer or trader from Gujrat sells goods to a customer in Gujrat (i.e. within the state) for Rs. 4,000 and the GST charged is 18 %. In such case the GST will be divided equally as -   9% CGST and 9% SGST.The total amount to be charged by the trader or manufacturer will be Rs. 4,720. Out of the revenue earned from GST under the head of SGST, i.e. Rs...

  Section 54: Exemption on Capital Gain Tax on sale of Residential House Property in India   The Income tax act exempts total or partial exemption of capital gain on sale of capital asset by investing in another capital asset within a prescribed time period subject to certain conditions. Under Section 54: Capital gain on sale of Residential Property Conditions: House property/properties is a residential house. The house property (self-occupied or let-out) is a long term capital asset i.e it must be held for a period of more than 24 months before the sale of the property.

  CALCULATION AND INDEXATION IN CAPITAL GAIN How to calculate Capital Gain? Capital Gain arising on transfer of a short-term capital asset is short-term capital gain, whereas transfer of a long-term capital asset is long term capital gain. The tax incidence is higher in case of short term capital gain in comparison to long term capita gain. Short Term Capital Gain Full value consideration:   The consideration received or receivable by the assessee

  CAPITAL GAIN TAX IN INDIA   DEFINITION, TYPES AND TAX RATES   Capital Gains Tax Capital gain can be defined as any profit or gain that is arises from the sale of a ‘capital asset.’ The gain or profit that is received comes under the ‘income’ category. Therefore, a tax needs to be paid on the income that is on transfer of a capital asset. The tax that is paid is called capital gains tax, which can either be long term or short term. As per Income Tax Act, capital gains tax is not applicable in case the individual inherits the property as there is only transfer of ownership and no sale of property. Any capital asset received on inheritance or will is not taxable. However, if the person who has inherited the property decides to sell it, tax will have to be paid on the income that has been generated from the sale. Profits or gains arising in the previous year in which the transfer took place shall be considered as income of the previous year which is charg...