The excise department has decided to replace the existing stamps with electronic ones. The information was released officially by the director-general of excise duty Somchai Pulswas. The department has not stated about the time frame within which the system will be adopted. The electronic stamps come with QR codes embedded in them. This makes fake stamping not possible and boosts the revenue.
At least a 10 percent rise is expected. The major sectors were excise duty collection is expected to rise is alcohol, tobacco and playing cards. Currently these are the only three areas were paper excise tax stamps are labeled. The paper stamps are re-used illegally and it is also tough to track them. Every year 3 billion stamps are issued by the excise department.
The revenue generated in the financial year 2015 from the three sectors is 62.4 billion baht from alcohol and 62 billion baht from tobacco.
Excise department accounts for 16 percent of the total Thailand’s tax revenue. The department is also planning to reduce the different types of stamps to just two forms to reduce ambiguity. At present there are 100 types.
The new stamps follow color code according to which blue color is for domestic products and red color ones indicate imported products. The details of products and manufacturers will be encrypted in the QR codes.
The excise department is expected to exceed its own tax target by 18 billion this fiscal year. The annual tax revenue of the department stands at 496 billion baht and at the end of six months the there is already 9 billion baht additionally earned.
The government is planning to reduce the corporate tax to all companies in the coming years beginning with small companies. Next year the government will increase the threshold for lower taxes to revenue of $10 million to $25 million. In a decade corporate tax for all companies will be brought down to 25 percent. Non-incorporated business will also be getting a 8 percent tax discount for companies earning revenue less than 5 million annually.
Small companies will also get tax exemptions for equipment purchase of up to $20,000 in the near future. The reduction in taxes will cost the government $5.3 billion. However the government is positive that the tax cut will boost companies and in turn jobs this will contribute to a rise of 1 percent in Australian economy. The government is also trying to plug the corporate tax evasions by lowering taxes. Around 500 Australians were listed in the famous “Panama papers”. Australian taxation office has kick-started its investigations in to tax evasion
Income tax department has introduced E-filing vault to increase security to the E-filing account. This additional security keeps the E-filing account from misuse and fraudulent activity. The higher security option can be set-up by the taxpayer after logging into the E-filing account and chose the “E-filing vault higher security” on the profile page. This layer of security can be invoked by multiple methods-log-in through net banking or Aadhar linkage to generate a onetime password (OTP), log in using a digital signature certificate (DSC).
E-filing vault facility prevents others from entering into the account even if the person is aware of user-id and password. The facility acts as a dual degree of authorization and therefore offers a higher security compared to simple ID and password. Resetting password is also done in a secure manner – linking to Aadhar for OTP or login through net banking or DSC. Digital signature certificate is obtained from the certifying authority (CA). DSC is the electronic equivalent of paper certificates. Certifying authority is a person who is given license by the Indian Government to issue DSC. These certificates have validity for one or two years. Additional security options such as bank account validation or Demat account validation will be available to increase security during login and resetting of passwords. The Income Tax department officials have issued warnings to taxpayers regarding phishing and fraudulent mails which are used to gather sensitive details such as IDs and passwords.
Tax benefits for Freelancers and consultants have become more attractive from the financial year 2016. The government has announced a 50 percent presumptive tax benefit for these professionals. “Presumptive tax” is a fixed tax rate on the gross receipts- it is the total earnings without excluding expenditure. Earlier “presumptive tax was fixed at 8 percent of gross receipts. Presumptive tax is for free-styled business people with gross receipts under INR 50 lakh.
The budget also identifies a wide range of professionals under such as free styled engineers, doctors, freelancers and consultants.
Presumptive tax helps the individuals from the burden of maintaining tedious records of income and expenditure. The organizations willing to pay under the “presumptive tax” scheme apply through the ITR-4S forms. However presumptive tax is not beneficial if the individual has more than 50 percent expenditure. In that case he/she should go for ITR-4 forms where all income and expenditure should be stated in a detailed manner. On filing this form the tax is levied on the net income. The tax is applicable only to free-style work and not a complete business. In case of an interior designer the presumptive tax is only for the consultancy if the designer is involved in making furniture and paintings presumptive tax is not applicable. Partnership firms can also claim”presumptive tax” however in case of partner remuneration it may lead to double taxation
Confederations of Indian Industry” (CII) recently. A former lecturer at the Stanford University and director of steam Engineering and control instrumentation firm Forbes Marshal. The director expressed his views regarding the jeweler strike over 1 percent excise duty. He stated that it was not possible to keep gold out of tax net. The jewelers protested for 40 days to withdraw the one percent tax levied on them.
The government will not gain much by imposing tax as low as 1 percent but still the government stays firm in its decision despite the protest. Excise duty will help the government track the activities of jewelers. It is well known that jewelry is the next sector after real estate where most of the black money flows into. To curb black money in this sector the government as mandatory for PAN details in transactions of more than INR 2 lakh.
To bring all these transaction under the tax radar the government has brought in excise duty. The jewelers protest that the excise duty authorities will harass them in the name of raids and the inspector regime will be back. The finance Minister Arun Jaitley stated that a luxury item like gold cannot be without taxes. The CII director feels that it is impractical to leave out any sector out of the tax net. He stressed the need to even bring agriculture under the tax net after few years. At present the entire agricultural income is out of the tax net.
The increase in compliance rate is very necessary, given that only 5 percent pay taxes in India. At present the required number is at 20 percent. Financial experts claim that GST will bring additional revenue of $15 billion due to increase in export of goods. After value added tax (VAT) GST is the first step in reforming the wide-range of indirect taxes. The GST bill was passed in the Lok Sabha (the lower house of Indian Parliament) and is yet to make its way through the Rajya Sabha (the upper house of Indian parliament). The ruling NDA government lacks majority in Rajya Sabha. There are two types of GST one is levied by the state government -SGST and the other by the central government. The fear among the state governments is that GST will reduce their revenue and the union government needs to compensate for the reduction.
Comptroller and Auditor General (CAG) report stated there was no proper mechanism in Himacahal Pradesh state government to check on VAT payment. The government has failed to check on dealers with income less than 8 lakh on any possible tax evasion. VAT is an important source of revenue for government. The state government of HP has failed to achieve zero fiscal deficits over the past few years. The fiscal deficit stands at 4.39 percent of GSDP. Thirteen projects of the state government remain incomplete from the past 10 years.
The excise and taxation department has issued no orders for periodic analysis of willful tax defaulters. The department has several cases pending assessment and the share of unattended work has been piling up continuously.
The data maintained by the income tax department was not complete; the dealer based segregation was not available in the records. No online notices have been issued to tax defaulters or errors in returns filed.
The CAG report suggested that the government should take measures to increase the tax paying base by continuous monitoring. The government is need of a mechanism for faster finalization of assessment. The tax department needs to fasten their administrative process and maintain better records These steps will ensure that the government can get hold of willful tax defaulters and dealers who do not pay VAT even after crossing their threshold limits. Increase in tax payers will help the government to reduce the gap in fiscal deficit.
The Financial Budget 2016 approved by the Parliament during the second session of the budget provides tax benefits because of the ‘housing for all ‘scheme.The government proposed that the first home buyers would have the benefit of availing housing loan with tax benefits. This rule will boost up the real estate industry. Thus new house owners can get up to fifty thousand tax benefits for their loan amount on thirty five lakh. This scheme was a long awaited scheme because of the increase in the cost of the residential units.
In India, a house owner can claim tax benefits for both the interest and the loan amount of the loan payment. Statuses of the loan payment before the scheme was that, the interest rate payable for own house had a deduction of two lakh under the Income from home property scheme. Hence the taxpayers were expecting a deduction of three lakh in housing loans.
Taxpayers and experts were also expecting deduction in the repayment of the housing loan. Because, the principal amount was included in the Income tax Act under the Section 80C, without much tax relief for the owners. Hence the government extended the deduction of the repayment loan. And according to Section 24 of the Income tax Act, the deduction provided under the self-occupied housing is above two lakh. Get Accounting Services work done with Uptra. Amber Anand, Realtor’s apex body CREDAI said that the new scheme introduced by the Ministry of Finance will increase the demand and benefit the people who have bought their own house for the first time.
When a choosing between becoming a employee or consultant, the professional needs to consider tax payment options. An employee pays tax over the salary income. The employee can claim tax deductions on allowance such as house rent allowance (HRA), conveyance allowance uniform allowance and leave travel allowance. A consultant does not have such deductions but eligible to claim over expenditure on assets required for the business. The assets include AC, furniture, phones etc. A consultant needs to maintain accounts to file taxes. In the recent budget the government has announced 50 percent “presumptive tax” over gross receipts. The professional needs to pay tax over 50 percent of the gross receipt and all that is considered as the net income excluding all expenditures. The individual will file taxes under ITR-4s form which is relatively simple.
This scheme saves the professional from the hustle of maintaining accounts but this only applicable when the gross receipt is less than 50 lakh. If the gross receipt is more than 50 lakh the consultant has to file his income and expenditure in the ITR-4 form and is left with a tedious task. A consultant has to be wary of services tax if the work done by him/her comes under notified services will be liable for service tax regulations. A consultant needs to pay advance taxes in three installments whereas a employee with salary as only source of income need not. Therefore while choosing between consultant and employee one has to consider the tax benefits and opt for the suitable one.
The new licensed universal banks are the IDFC bank and the Bandhan bank. The IDFC bank is a corporate bank with customer banking facility and the Bandhan bank continues to focus on its small loan schemes. By 2018, there can be many finance bank and payment banks under process. The Cholamanadalam distribution service Ltd is one of the payment distribution bank, licensed by the Reserve bank of India, and Jalandar based bank will operate as the Capital small financed bank, it is the first small financed bank.
The small banks can offer loans of up to twenty five lakh, the seventy five percent of the loan goes to the priority sector. The payment banks can provide up to one lakh, they cannot provide loans and credit cards. But the payment banks can provide internet banking service and debit card.The black money of the Indian banks is in the infrastructure bank, because of the pressure from the government. But they do not know the problems associated with the infrastructure banks. The wholesale bank will resolve this issue, because they can generate long term funds. India requires banks with different business models, shapes and sizes. The regulators are also trying to reduce the risk of the banks that the state operates.