Category: Budget

Union Budget 2016-17: Service tax Highlights

Union Budget 2016-17 has been declared and brought changes in service tax regime. Here  is the service tax highlights of union budget 2016 speech. Read and understand major changes in service tax brought by Budget 2016-17. Union Budget 2016-17 : Service tax highlights Service tax rate hike from 14.5% to 15%  due to “Krishi Kalyan Cess-0.5%” Levy: There is no direct change in service tax rate but With effect from 1st June, 2016, Krishi Kalyan Cess will be levied on any or all the taxable services at the rate of 0.5% on the value of such taxable services. Input...

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Tax Payers Alert: Income Tax on PF Premature Withdrawal

 Latest changes in rules of income tax on PF premature withdrawal: “From June 1, workers’ retirement investment funds surpassing Rs 30,000 will be taxed at 10.3% or the maximum marginal rate of 30.9% in the event if they leave the employees’ provident fund before finishing five years of Service.”  Reference- budget 2015 speech-link Introduction – Income Tax on PF ( Provident fund) An Employee Provident Fund account is a mandatory for all employees earning salary up to Rs 15,000 per month in firms or companies employing more than 20 workers. As per this practice, the portion of the employee’s...

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Service tax rate chart for fy 2016-17 : with new service tax rate 15%

Service tax rate from 1st June, 2016 is 15% with krishi kalyan cess. I have given here service tax rate chart for FY 2016-17 to describe rate on various services with abatement and reverse charge mechanism – updated with budget 2016 changes. ( Service tax will be replaced with GST from 1st July, 2017. Know latest gst rate here) Note: Budget 2016 has increased service tax rate from 14.5% to 15% by levying Krishi Kalyan Cess at 0.5% . This change will be effective from 1st June, 2016. Till that you can use chart given below to decide service tax rate.    Service tax rate chart for fy 2016-17 with new service tax rate 15%:(applicable from 1/6/2016- with krishi kalyan cess) Service provided Amount( 1) Abatement rate or Exemption rate( 2) Value after abatement( 3=1-2) Service tax payable (3*15%) Effective rate to be charged on bill*( 4) =15%-abatement rate Conditions to be followed to claim abatement or exemption Tour operator service   Accommodation booking 10,000 90% 1000 150 1.50% No cenvat credit for input, input services or capital goods.Invoice includes amount of accommodation. tour (other than above) * 10,000 70% 3000 450 4.50% No cenvat credit for input, input services or capital goods. Transport of goods by rail by person other than Indian railway 10.000 60% 4000 600 6% No cenvat credit for input, capital goods. cenvat credit on input services are...

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When will new service tax rate 14% be applicable

After budget 2015 , the common question asked to me by various blog readers, when will new service tax rate 14% be applicable? That’s why I have written this post.The new rate will be applicable from 1st June, 2015. Applicability of new service tax rate 14% after budget 2015: I can understand worry of service tax payers about new service tax rate. Let me clear that new service tax rate will not be applicable from 1st April, 2015. When we read the amendment of section 66B, it reads as under, [su_quote]106. In section 66B of the 1994 Act, with...

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Income tax deduction 2014-15 (A.Y. 2015-16)

There is change in  limit of income tax deduction 2014-15 (A.Y.2015-16) with introduction of budget 2015. I have prepared chart for it. Through it you can get details of new deduction limit under section 80C, 80D etc. Chart for income tax deduction 2014-15 ( A.Y. 2015-16) Deduction limit changes in budget 2015-16 SectionDeductionBefore budget 2015-16After budget 2015-16Other conditions to avail deduction 80CInvestment in Sukanya Samriddhi Account scheme is eligible for deduction.Interest and withdrawan are exempt.EEE (exempt-exempt-exempt) scheme. The account can be opened on the name of girl child in post office. 80CCDContribution to pension planMaximum limit Rs. 1,50,000Maximum limit...

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