Amendments - 2008

!!! GOOD NEWS FOR MANUFACTURERS OF PACKING MATERIALS !!!

Government made New Amendments in Tax Rate of Packing Materials including plastic

COMMODITY		SCHEDULE	TAX RATE
Packing material - plastic (other)		III	4
Packing materials		III	4

Read the original article on Keralataxes.in

Download the List A items details. (PDF)

Income Tax Slab For The Financial Year 2008-09 (For Individuals)

Taxable income slab (Rs.)	Rate (%)
Up to 1,50,000 (for men below 65 Yrs) Up to 1,80,000 (for women below 65 Yrs) Up to 2,25,000 (for senior citizens[65 Yrs & above])	NIL
1,50,001 - 3,00,000	10*
3,00,001 - 5,00,000	20*
Income above 5,00,001	30**

* Education cess is applicable @ 3 per cent on income tax, inclusive of surcharge if there is any.
**A surcharge of 10 per cent of the total tax liability is applicable where the total income exceeds Rs. 10,00,000.

VAT forms - 2008

For latest VAT forms click here

Income Tax (Definition)

What is Income Tax?

• Taxes in India are of two types, Direct Tax and Indirect Tax.
• Direct Tax, like income tax, wealth tax, etc. are those whose burden falls directly on the taxpayer.
• The burden of indirect taxes, like service tax, VAT, etc. can be passed on to a third party.

Income Tax is all income other than agricultural income levied and collected by the central government and shared with the states.

According to Income Tax Act 1961, every person, who is an assessee and whose total income exceeds the maximum exemption limit, shall be chargeable to the income tax at the rate or rates prescribed in the finance act. Such income tax shall be paid on the total income of the previous year in the relevant assessment year.

The total income of an individual is determined on the basis of his residential status in India.

Residence Rules

An individual is treated as resident in a year if present in India

1. for 182 days during the year or
2. for 60 days during the year and 365 days during the preceding four years. Individuals fulfilling neither of these conditions are nonresidents. (The rules are slightly more liberal for Indian citizens residing abroad or leaving India for employment abroad.)

A resident who was not present in India for 730 days during the preceding seven years or who was nonresident in nine out of ten preceding yeas is treated as not ordinarily resident. In effect, a newcomer to India remains not ordinarily resident.

For tax purposes, an individual may be resident, nonresident or not ordinarily resident.

Non-Residents and Non-Resident Indians
Residents are on worldwide income. Nonresidents are taxed only on income that is received in India or arises or is deemed to arise in India. A person not ordinarily resident is taxed like a nonresident but is also liable to tax on income accruing abroad if it is from a business controlled in or a profession set up in India.

Capital gains on transfer of assets acquired in foreign exchange is not taxable in certain cases.

Non-resident Indians are not required to file a tax return if their income consists of only interest and dividends, provided taxes due on such income are deducted at source.

It is possible for non-resident Indians to avail of these special provisions even after becoming residents by following certain procedures laid down by the Income Tax act.

Status	Indian income	Foreign income
Resident and ordinarily resident	Taxable	Taxable
Resident but not ordinary resident	Taxable	Not Taxable
Non-Resident	Taxable	Not Taxable

Income Tax Rates For FY 2005-06 & 2006-07

For Men & HUF:
0 - - 1,00,000 Nil
1,00,001 - 1,50,000 10%
1,50,001 - 2,50,000 20%
More than 2,50,001 30%

For Women
0 - 1,35,000 Nil
1,35,001 - 1,50,000 10%
1,50,001 - 2,50,000 20%
More than 2,50,001 30%

For Senior Citizen
0 - 1,85,000 Nil
1,85,001 - 2,50,000 20%
More than 2,50,001 30%

Note:
*Surcharge @ 10% applicable if total income exceeds Rs. 8.5 lakh for A.Y. 2005-06 and Rs. 10 lakh for A.Y. 2006-07.
*There is a new section 80C according to which a person can get rebate upto Rs. 1,00,000 against insurance premium, PF contributions and other such schemes.
*In case of higher education there is a deduction in tax for a maximum period of 8 years.
*Marginal relief would be provided to ensure that the additional income tax payable including surcharge, on the excess of income over Rs. 10,00,000 (Rs. 8.5 lakh for A.Y. 2005-06) is limited to the amount by which the income is more than Rs. 10 lakh (Rs. 8.5 lakh for A.Y. 2005-06).
*Education cess @ 2% on tax plus surcharge.