General Questions
What is an ITR -V?
ITR-V is an acknowledgement slip generated on filing the income tax return online. This ITR-V is to be signed and sent to the Income tax department-CPC by post to complete the return filing process. The password of the document is a combination of PAN (in lowercase) and date of birth in the format ddmmyyyy. For example, if the PAN is AAAAP0000A and the date of birth is 10-Jan-1990, the password is aaaap0000a10011990
What is TDS?
TDS is Tax Deducted at Source, and is usually deducted from the taxable portion of your salary before it reaches you, every month. This is usually mentioned by the company on tax documents.
Is my Gross Total Income taxable?
No, it isn’t. Your Gross Total Income includes sources that are exempted from tax, and these won’t be included in your net taxable income.
What is Net Taxable Income?
Net Taxable Income is the portion of your income that is subject to tax, i.e. the Gross Total Income minus various tax exemptions that may be applicable. We does this calculation for you once all the information is available.
What is Advance tax?
Advance tax is the income tax that is payable once your income is more than Rs.10,000 in the given financial year.
Is my EPF completely Non-Taxable?
No, only the employee contribution to the EPF is nontaxable.
Can I claim a tax deduction on my Fixed Deposit Account?
You can, but based on certain considerations like the period, amount and the kind of bank.
Can I Claim tax benifits on any kind of medical expenses?
Medical expenses may be exempt from tax, but only if the expense is for yourself or a dependent and only on certain diseases as specified under the Income Tax Act.
General Questions
Foreign Companies Venturing into India
Appropriate structure for your proposed activities in India
Proposed Activity – The foreign direct investment (FDI) in India is governed by The Reserve Bank of India (RBI) directives imposing sectoral caps on various activities.
Local Partner – If foreign company wishes to explore Indian market with the help of a local partner, it has no choice but to form a Joint venture company.
Nature of Transactions – If foreign company wishes to engage India only for representation purpose, it can opt for either a liaison office and if it wishes to engage in commercial transactions of purchase and sale, maintenance contracts etc, it can opt for a branch office subject to obtaining prior RBI permission.
Foreign Company required to take PAN rendering service to customers in india
As per section 206AA of The Indian Income Tax Act,if a foreign company does not have a PAN, the Indian company effecting remittance needs to deduct withholding taxes @ 20%. To avoid the same, it is advisable for the foreign company to obtain a PAN subject to specific conditions.
Obtain Registration of Company in India
Time taken to for a company in india. The process involved takes approx 4 weeks for the Indian company to be formed.
Required to Submit Documents for company formation
Yes. The company formation process involves submission of loads of document starting with parent company charter Documents, directors address proof and passport. Few of the post formation registrations also require the documents to be attested by Indian Embassy in parent jurisdiction. Most of these are one time requirement and not recurring.
What are the transferring price regulation in india
India has transfer pricing (TP) regulations modeled on International standards. The guiding pole being ‘arms length transactions’. The regulations stipulate that all ‘related party transactions’ should be based on ‘arms length’ ; thereby making it mandatory that due income should be offered for taxation in India. Foreign companies therefore need to consult subject area experts and carry out a detailed TP study and frame up a TP method and fix all commercial transactions based on this advise. It is important to note a company is obligated to file a separate TP Report with Revenue authorities in India and these companies would also be assessed by a designated TP Cell of The Indian revenue authorities.
Finance Questions
Non Resident Indians
Income Tax Implications
Income Tax Implications
For the purposes of levy of tax, the Income-tax Act in India has classified the status of an individual assessee into three viz.,
For the purposes of levy of tax, the Income-tax Act in India has classified the status of an individual assessee into three viz.,
- Resident and ordinarily resident (ROR)
- Resident but not ordinarily resident (R but NOR)
- Non-resident (NR)
Basics Concept of FEMA
FEMA stands for Foreign Exchange Management Act. Residential status and nature of transaction (e.g. purchase/ sale of shares, property) or current account transaction (e.g. remittance of income on shares, property) are the cornerstones of FEMA.
Residential Commercial Property in India
In general, NRI can freely invest in residential/ commercial property (subject to certain restrictions like investment in agricultural land, plantation and farm house). Besides the sale proceeds can be freely repatriated outside India to the extent of the amount originally brought in from abroad. Also sale proceeds of only two residential properties can be repatriated.
Besides, housing loan can be availed in India against the security of the immoveable property. Now loan for any bonafide purpose may be obtained against the security of immoveable property.
Insurance Policies in India
NRI can hold insurance policies in India and pay premium thereon without any permission. Settlement of claims in foreign currency by insurance companies is permitted in certain cases where the premium has been paid in foreign currency or remittance from abroad. See also Repatriation.
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