IT Department Raids 30 Premises in AP & Telangana, Seizes ₹75 Crores From Groups Engaged in Real Estate

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The Income Tax Department of India conducted coordinated search operations across the states of Telangana and Andhra Pradesh on November 10th. The search operation resulted in the IT Dept. uncovering undisclosed income which amounted to a total of ₹75 crores. The Central Board of Direct Taxes (CBDT) revealed the information regarding these search operations on Tuesday 16th November. In AP & Telangana, the raids were conducted in Visakhapatnam, Vizianagaram, Srikakulam and Hyderabad cities.

The Income Tax Department carried out search & seizure operations on 10th November at 30 different premises belonging to three different groups. These three groups mentioned primarily conduct their business in the real-estate market by developing residential plots and construction of apartments. The officials conducting the raids unearthed a lot of convicting evidence against the 3 groups which included handwritten books, digital records, loose sheets containing details of undisclosed cash transactions – all of which were sealed and seized by the officials. The total value of the undisclosed income by the 3 groups tallies to approximately ₹75 crores.

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When the IT Dept. & CBDT conducted analysis of the evidence gathered, they found out that the expenses were inflated through fake claims to hide the taxable income. All 3 groups had also resorted to making transactions of large sums of money in cash which were deliberately not mentioned in account records & books. The officials also discovered unaccounted cash worth ₹1.2 crores & jewelry worth ₹90 lakhs. All known nine bank lockers of these groups have been place under prohibitory orders to prevent anyone from accessing them.

The Income Tax Department also found another 200 crores of undisclosed income from raids conducted in Pune at premises of a Pune based heavy machinery which manufactures cranes & mining machines/equipment. Raids were conducted in 11 cities across India on 10th & 11th November at 25 places.

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The Income Tax Department also uncovered unaccounted income to the tune of ₹600 crores while carrying out search & seize operations at premises of 2 companies based in Delhi and Gurugram. Apart from the trails of ₹600 crores worth of undisclosed income, the officials of the IT Dept. also found undisclosed cash of ₹3.5 crores and gold/jewelry of more than ₹5 crores in value. A total of 18 bank lockers linked to these companies have been placed under prohibition and the officials are working on opening them where supposedly more cash & relevant documents hiding undisclosed assets lie.

Pan Card Online Application Form Download PDF

Download Form 49A Applying for Pan card

Pan Card indicates the unique identity in terms of Income Tax. The full form of PAN is Permanent Account Number which is issued by the Income Tax Department of India to identify the individuals or firms etc. If you are planning to apply for the Pan Card then you are in the right place because through this article we providing Form 49A Application form or Pan Card Application form for free you can download it or complete the form 49A online and take the print.

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Pan Card Application Sample Form PDF:

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How to Fill Form 49A Applying for Pan Card Online & Offline?

  • Form 49A consists of 16 fields.
  • Affix 2 passport size photos in the 2 photo boxes which are present at the left top and right top of the Form 49A.
  • Sign the photo across it the one which was affixed at the left top of the form.
  • Put another signature in the box below the second photo which was affixed at the right top side of the Form 49A.
  • Enter your Surname, First name and last name in the name field.
  • Enter the name you preferred to display on the Pan Card.
  • Enter your gender and date of birth.
  • Enter your Parents details (both mother & father).
  • Enter your residential address.
  • Enter your Office address.
  • Select your address for communication from office & residential addresses by ticking the box.
  • Enter your phone number, Email id.
  • Select your status whether you are an individual or firm etc.
  • If you are an individual, enter your Aadhar card number and your name same as mentioned in the Aadhar card.
  • Enter the source of income details.
  • Enter the details of yours along with complete address in the representative assessee field.
  • While applying online, you have to attach the scanned address proof document, date of birth, identification proof document.
  • Verify your Pan Card Application form and the details entered in it with your sign along with the date and place.
  • If you are applying online then click the submit button.
  • If you are applying offline then sign the application form with date and send the  Application form to the address mentioned in the application form along with the photocopies of the supporting documents.

Documents Required Applying for Pan Card:

  • Two Passport size photographs (size 3.5 cm x 2.5 cm)
  • Photo Identity proof
  • Residence proof/Address Proof
  • Birth Certificate/ Date of Birth Proof
  • Pan Card Application form and prescribed fees

Who Can Apply Pan Card?

  • All the Indian Citizens residing in India
  • All the Tax Payers
  • Individuals who intend to enter into economic or financial transactions
  • For people over 18 years of age it is advised

Pan Card Correction Form Download PDF

Pan Card Online Correction Form

Pan Card Correction Form helps you in applying to make the corrections on the Pan card. Apart from applying for the corrections you can even use the Pan card Correction form applying for the address change. Through this article we providing Pan Card correction form for free you can download it or complete the Pan Card correction form online and take the print.

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Pan Card Correction Sample Form PDF:

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How to Fill Pan Card Correction Form Online & Offline?

  • Form 49A consists of 16 fields.
  • Affix 2 passport size photos in the 2 photo boxes which are present at the left top and right top of the Form 49A.
  • Sign the photo across it the one which was affixed at the left top of the form.
  • Put another signature in the box below the second photo which was affixed at the right top side of the Form 49A.
  • Enter your Surname, First name and last name in the name field.
  • Enter the name you preferred to display on the Pan Card.
  • Enter your gender and date of birth.
  • Enter your Parents details (both mother & father).
  • Now select the appropriate box in which you want to make changes.
  • For example if it is signature mismatch then tick box 6, if it is photo mismatch then tick the box 5, if it is address for communication then tick box 7, and if you want to change all then tick the boxes 5,6,7.
  • Enter your address for communication.
  • After entering address now enter your phone number, mail id, and Aadhar number if it is allotted.
  • Enter your pan number.
  • Verify your Pan Card correction form by signing it along with the date and place.

Form 16A Download for IT Returns

Form 16A Online Application Form PDF Basically Form 16 A is a IT Returns form to submit the tax deduction at source (TDS) by the employer on behalf of the employee. Form 16 A approves the TDS of the employee for the financial year. Through this article we providing Form 16A Application form for free you can download it or you can complete the form online and take the print.

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Form 16A Sample Form PDF:

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How to Fill Form 16A Online & Offline?

  • Write the certificate number and last updated date.
  • Write the name and address of the employer in the employer column.
  • Write the employee name and address in the employee column.
  • Write the Pan Number of the employer.
  • Write the TAN number of the employer.
  • Write the Pan number of the employee.
  • Write or enter the reference number of the employee given by the employer.
  • Enter the Address, the assessment year, working period of the employee with the employer.
  • Enter the summary of amount paid or tax deducted at source in respect of the employee.
  • Now enter the details of the tax deducted and deposited in the Central Government account.
  • The last part of the form 16A is verification, the person who is responsible for deduction tax must verify the application by signing it with date and place.

Form 16 Download for filing IT Returns

Form 16 Online Application Form PDF

The Income Tax Department of India provides the Form 16 to file the Income Tax returns by the employer on behalf of the employee. Form 16 is a Tax filing form, Form 16 approves the deduction of the TDS from the salary of the employee by the employer. Form 16 certifies the employee is paying income tax through the employer. Through this article we providing Form 16 Application form for free you can download it or complete the form online and take the print.

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Form 16 Sample Form PDF:

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How to Fill Form 16 Online & Offline?

  • Enter the certificate number and last updated date.
  • Enter the name and address of the employer in the employer column.
  • Enter the employee name and address in the employee column.
  • Enter the Pan Number of the employer.
  • Enter the TAN number of the employer.
  • Enter the Pan number of the employee.
  • Enter or enter the reference number of the employee given by the employer.
  • Enter the Address, the assessment year, working period of the employee with the employer.
  • Enter the summary of amount paid or tax deducted at source in respect of the employee.
  • Now enter the details of the tax deducted and deposited in the Central Government account.
  • The last part of the form 16 is verification, the person who is responsible for deduction tax must verify the application by signing it with date and place.

TDS | What is TDS | Full form of TDS | TDS for Individuals, Firms, Start-ups, Property Sales, Purchase Explained

Form 26AS Download for IT Returns

Form 26AS Online Application Form PDF

Form 26AS is a Consolidated Annual Tax Statement filed by an individual for that assessment year. The Income Tax Department issues Form 26AS to the individuals to file the consolidated tax returns like TDS, TCS and the payments excluding TDS & TCS. Through this article we providing Form 26AS Application form for free you can download it or complete the form online and take the print.

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Form 26 AS Sample Form PDF:

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How to Fill Form 26AS Online & Offline?

  • Form 26 A application contains three parts.
  • First part of the application is called Part A – to enter the TDS details of the assessment year.
  • Second part of the application is Part B – to enter the TCS details of the assessment year.
  • Third and last part of the Form 26AS is Part C – to enter the tax paid for the assessment year.
  • Enter your Pan number in the Pan Number field.
  • Enter your name in the Assessee name field.
  • Enter your complete address in the Assessee address field.
  • Enter the financial year in the financial year field.
  • Now fill the part A of the application form 26AS by entering the details of the tax deducted at source.
  • Fill the Part B of the application form by entering the details of the tax collected at source.
  • Fill the Part C of the application form by entering the details of the tax paid.

TDS | What is TDS | Full form of TDS | TDS for Individuals, Firms, Start-ups, Property Sales, Purchase Explained

UK Mortgage

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UK Mortgage Calculator 

When borrowing money to help finance a home purchase deal, you may opt for a mortgage because it tends to offer lower interest rates and it may extend over a long period allowing you ease the burden for paying for the loan. However, as much as a mortgage may seem attractive, you also want to know that it is just part of many other expenses you may be living with. The cost implication of a mortgage is not something many people understand and that is one reason why people find themselves in financial difficulties once they have taken a mortgage. There is every reason for you to make a sound financial decision when borrowing a mortgage in UK and one tool that you may find very resourceful is a UK mortgage calculator.

A mortgage calculator is not just a tool for providing you with values and numbers, it is a something more than that. It helps in many different ways including estimating the amount you may be approved for a mortgage, the suitable loan amortization period, and the best interest rates in the market. It can help you in coming up with a budget that allows you to repay your mortgage with ease.

 Why You Need a Mortgage Calculator

There are obvious reasons for using a mortgage calculator one being that it allows you to easily determine the amount of mortgage you should borrow and the interest rates applicable. It also helps you compare the different mortgage deals available in the market because different lending institutions will offer different rates and charges.  When you use the loan calculator, you are in a position to know which mortgage works for you and which lending institution you should work with. A mortgage comparison can give you the best deals meaning you get the best rates.

Many a times, people only see the mortgage amount as directly correlating to the price of the home they want to purchase, but there are costs you should be wary of. When taking a mortgage, you want to evaluate all the risks involved including the costs and expenses that may not directly be pointed out when borrowing. A mortgage will come with other related costs and charges or fees. It is also just one of the expenses that you will be meeting because you have to live your daily life that means you have other financial obligations to meet. You could also be having another loan for example, a home improvement loan or a car loan that you are paying. All these are costs that you need to consider carefully and a mortgage repayment calculator is going to assist you come up with an appropriate budget so that you don’t struggle to repay the amount. 

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Mortgage Costs

A mortgage comes with other costs and the obvious one is the interest rate you pay against the principal amount. Apart from the interest amount, there are other raft of fees, taxes, and charges that you may have to pay before and after you get the home loan. You need to factor in all these mortgage costs when buying a home so that you don’t find yourself in an awkward position.

Before you take the mortgage, there are fees that you pay to the lender and you will find that most mortgage products in UK have at least one fee if not two or three. The mortgage arrangement fee and the mortgage booking fees are two typical fees that you will pay to the lender. The arrangement fee use to cover the lender’s administration costs, but now, it has become a crucial part of the cost of mortgage besides the mortgage rates. Sometimes, the arrangement fees may be termed as the product fees or the application fees or the booking fees.    

When you use a mortgage calculator UK tool, and you want to budget for the repayment of the loan, see that you consider the various mortgage costs.

As the homeowner taking a mortgage, you should be wary of lenders that offer you low rates to disguise their high fees. You may find some lenders charging fees as high as £2,000 or more, but when it comes to the rates, they look so attractive. What they do is that they have cunningly tried to lure you with the low interest rates, but they trap you with the high charge fees that you may not be aware of. Depending on the size of the loan you want, sometimes, you may find that a high fee- low rate deal is more attractive and cost efficient than a low fee – high rate deal. Higher fees may be seen to work better for larger loans.

Also, be careful because a lender will provide you with options of paying the product fee or arrangement fees. It may be upfront, where you pay at the time you are getting the loan or you may add it to the mortgage. If you add that amount to the mortgage, it will be charged interest and it may create more burden to you in the long run. There is also the disadvantage of paying upfront because you may lose the arrangement fee you pay if something goes wrong with the home purchase deal. The trick here is that you should add the arrangement fee to the mortgage loan, then immediately the home purchase deal matures, you pay off that fee immediately so that it’s not charged interest together with the loan. Even when you use the mortgage calculators, it may be important to seek the help of a mortgage advisor to give an insight on the various fees and charges that may be imposed on your loan because some may not be disclosed to you at the time of applying for the loan.

When you add the fees onto the mortgage, it is going to protect you from losing some or part of the fee you pay upfront if the mortgage does not materialize or go through for any reason. Sometimes, lenders may prevent you from adding the fee to the mortgage and paying it immediately after the mortgage deal goes through, so there is also another trick you can use which is overpaying the mortgage. Many mortgage lenders will allow borrowers to make over payments of up to 10% without imposing overpayment penalties. That should be fine with you if the other option does not work out.

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Lenders may also charge what they call booking fees to help secure a fixed-rate, discount deal, or tracker. This may amount to about  £100 to £200.

Apart from the mortgage fees, there is also the stamp duty that is paid to the government. It is a form of tax that property buyers pay to the government when they buy property. Stamp duty may not be levied on properties that are of £125,000 or less, so you want to think about that and know when it applies because it is going to have an effect on the cost of your mortgage. Do all your mortgage cost properly and take advantage of the loan repayment calculator to help you make a wise decision. You should also know that the mortgage calculator you use may not factor in some of the cost of the loan, so you to do your research well.

Other costs involved are such as conveyancing fees, land registry fees, relocation expenses, services charges, and upkeep.

 How to Use a Mortgage Calculator

A loan repayment calculator will help you in different ways whether you are borrowing a mortgage or you already have one. If you want to know the amount you will pay every month, you will enter the amount of loan you want to borrow and the interest rate. In case you already have a loan, and you probably want to know how a rise in interest rate is going to affect your payments, you can use the calculator. A mortgage affordability calculator will require you to provide information such as the your income details including salary, pension, and bonuses; information of payments you make on other loans such as personal loans and credit card payments; other outgoing that you have such as council tax, maintenance costs, monthly travel, and insurance.  Depending on what you want to compute, these is usually data that you have to feed in to the loan calculator and it will give you the results in just a few minutes.

If you want to know the monthly payments, total payment, and the total interest paid, you may enter data like the mortgage amount, the mortgage term in years, and the interest rate in a mortgage calculator like that provided by nationwide mortgage. 

Buy-to-Let Mortgages

When you talk of buy-to-let (BTL) mortgage, it’s a form of mortgage that applies to property buyers buying to rent the property. While the rules for applying for the loan as similar to those for the normal mortgages, there are some different. You will find that with the BTLs, they tend to attract higher interest rates. When seeking to get a BTL mortgage, you want to use a loan calculator to determine how much to borrow depending on your financial situations. You may get a BTL mortgage if you want to invest in flats or houses and you can afford taking the risk of investing in property.

With buy to let mortgage, it’s mostly interest only meaning that you are not paying anything each month, however, at the end of the loan term, you will repay the principal or capital in full. The fees for applying for these mortgages are much higher and there is age limit for the mortgage. If you are taking buy-to-let mortgage, you should plan for times during which there may be no rent that is coming in. So don’t assume that there will be tenants occupying the property all the time, and at times, the tenants may not pay the rent as agreed. So, make sure you plan for these eventualities. Also, don’t rely on selling that property to repay the loan. If you fall into this trap, it is going to hurt you. The prices of the houses may fall and this means you may not get sufficient amount of money to repay the loan. In case the prices are down, you may have to make up for the different on the mortgage balance.

Investors may houses to let may want to consider other costs like tax. If you purchase a house to let for profit, you are required to pay what is known as the Capital Gains Tax, especially if you exceed the threshold provided. A rent income which is more than your mortgage interest payment or some allowable expenses may be levied Income Tax. A buy to let mortgage calculator can help when you want to find the amount you can borrow and how the loan is going to cost you.

Calculating Mortgage UK Manually

The easiest way to calculate a mortgage is by using the calculator, however, if you want to do it manually, you may use this formula:

M=P*r(1+r)n/(1+r)n-1

In this formula, “M” stands for monthly repayments and “P” denotes the principal amount. The “r” stands for the interest rate and the “n” represents the term of the loan or the period in which you are repaying the loan.

Remortgaging or Refinancing your Mortgage 

Remortgaging helps you reduce the cost of paying for your loan. It allows to get a loan with a lower interest rate thereby ensuring you comfortably pay for your mortgage. You can find out the most suitable mortgaging deal by using a remortgage calculator. A remortgaging calculator helps you find out if you will be saving money by switching to a lower interest rate mortgage. Borrowers need to realize that if they consolidate their short term debts into a remortgage, they may increase their interest rates if they are repaying for a longer term. A remortgage is a situation where a homeowner takes out a new mortgage against their property to replace the current mortgage they are paying with a better term loan or to borrow against the property. It is estimated that about a third of home loans in UK are in form of remortgages.

A remortgage is suitable for you if the current mortgage deal is just about to end. You will find that most mortgages will last a short time, let’s say two to five years – which is the typical length of loan repayment offered to tracker, discount, or fixed rate mortgage. After that period, you are put on the standard variable rate (SVR) and in some cases, the SVR may be higher than what you have been paying. A remortgage can allow you to switch to a better loan rate. You can also consider a remortgage if the value of the home has gone up or if you are worried that interest rates may go up. If you want to switch from the interest only to the repayment form of mortgage, you may as well think of remortgaging. So if you want to offset mortgage, there are many ways to do it including remortgaging for a cheaper interest rate loan.

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Canadian Mortgage

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Canadian Mortgage Calculator 

Some people have sufficient amounts of money to purchase houses without needing to take a mortgage, but for others, they will rely on mortgage to finance the house buying deals. A mortgage is a loan that is taken to help buy a home. Individuals taking out mortgages will make down payments and the remaining balance of the loan is paid through monthly installments. The length of paying for mortgage also known as the amortization period can vary depending on the kind of loan you are taking but most have an amortization schedule of about 25 years. To calculate the amount of mortgage you should take, the home buyer may need to use a mortgage calculator.

A Canadian mortgage calculator helps you to find out the monthly mortgage repayments you will be making. The mortgage calculator also helps you know the total payment and the interest you will pay. This way, you can make an informed decision on whether you are financially fit to be able to repay the mortgage or not. A mortgage calculator uses a program that works out the figures or values you want to know about regarding the loan. For example, you may enter the mortgage amount, the mortgage term in terms of years, and the interest rate expressed in percentage form. The mortgage affordability calculator will then give you the monthly repayment, the total amount to pay in that loan term, and the total interest paid.

What is a Mortgage Calculator?

So, a mortgage calculator is actually a tool that applies a mathematical mortgage monthly payment formula to help in mortgage computations. It is a useful tool for checking different values that are involved in mortgaging. In addition to knowing the values, you are also able to find out if you can qualify for a mortgage loan or not. So, if you are looking for a mortgage loan in Canada, you will find it very useful to apply the Canadian mortgage calculator.

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 Why Use a Mortgage Calculator in Canada

 You can use a mortgage calculator Canada tool for many reasons and one is that you can get a loan that attracts the lowest interest rate. Because the calculator will show you the loan interest rate you will be paying and the interest amount, you are able to know if that is the kind of loan you want or not. You also learn what the effects of the loan will be to you and this should be your most important thing. Calculating the mortgage amount you will take is very important so that you don’t find yourself in financial troubles or worse still a foreclosure situation.

That said, a Canadian mortgage calculator will help you in the following ways:

Obtaining a Pre-approval

You may think that getting a mortgage is easy, however, if you don’t know how it is going to affect you, it could turn out a big burden on your finances. Individual homebuyers often are not the only people having a say regarding the mortgage they should take, lending institutions also have their voice. The lenders can dictate the amount you will get. The lending institutions may determine what homebuyers should take as a mortgage loan. A mortgage calculator Canada is a very essential tool when you want to determine what you should be willing to apply as a loan to buy a home. If you use the calculator, you can find out the amount you can get and then make your loan application for approval. The pre-approval knowledge you have helps you make the right application so that you are not denied the loan. The loan calculator allows you to evaluate your pre-approval process by knowing how much of a mortgage you may be able to get approved for.

 Calculate other Expenses Related to the Mortgage

Many people will just look at the amount of mortgage that they may be approved and then start thinking of the properties that are the top of the budget. It’s important that homebuyers taking mortgage loans to consider other expenses related to the mortgage. For example, you are paying interest on the loan. Since a mortgage involves a big sum of money, many people will have a significant amount going to service the interest of the loan. Besides the interest rates, the homebuyers will also be paying homeowners insurance and taxes.

All these are expenses that may be related to the mortgage loan and they should be factored in when taking the loan and making key decisions regarding the amount to take and how much to pay in monthly payments. Other people may need to have mortgage insurance, though this depends on the amount of down payment they will be making when they are getting the loan. If you plan for these expenses, you are in a better position to budget for the loan and sail through in your payment plan. A mortgage calculator comes in handy to help you in making these key decisions.

 Helps Factor-in Other Expenses

Because a mortgage has a big impact on your finances, there is need to take other expenses into account, and not just those related to the mortgage. For example, a homeowner unlike a renter, will not get services like heat, television, water, and others included the loan. So, homeowners should not just be worrying about only the mortgage related expenses but also other costs they have to incur in their day to day housing and financial life. A mortgage calculator becomes an important tool for you to consider other expenses that you incur before you take the mortgage loan. These expenses may include furniture, groceries, upkeep of your property, and the general maintenance of the property. If you are trying to figure out what you can reasonably afford when taking a mortgage, then all the other expenses have to be put into the picture.

 Helps with a Trial Run

When you use the Canadian mortgage calculator to find out the interest amount and the loan you may be approved for, you can give yourself a test. This is what is called the trial run – you are simply trying to test yourself and see if you can actually meet the challenge of paying for the mortgage or not. So, once you have decided the amount you want to take and determined the amount you will be spending per month, you should do a trial run. This will allow you to measure your ability to repay the loan without having a hitch. Remember that you have the other expenses, so you don’t want to overburden yourself.

What basically you want to do is find out if you can set aside that amount of money for paying the loan after spending on all other expenses for the month. If you find that you cannot do it, then you should reexamine your decision and choose a property that is less expensive or pay a larger down payment. And you know, when you make a larger down payment, it may reduce the interest rate you are paying, which also reduces the monthly repayments amounts.

Make wise Overall Mortgage Decisions  

Many people want to get the home that is at the top of the budget, which means getting a larger mortgage. But that can be tricky and often a bad decision. It is likely that you don’t need that expensive home for now, so you can go for a smaller house that is affordable and won’t put pressure on you through mortgage payment. You can then later on move to a bigger home or just expand the home you purchase rather than considering an expensive house in the beginning that only creates more financial troubles in your mortgage payment.

The decision on the amount you will be spending on a mortgage can be very intricate and unless you have taken a serious thought about it and considered all the expenses and costs you will be meeting, it is easy to make the wrong decision. However, a tool that can assist you in the process is the mortgage calculator. It may not show you exactly how much you should take, but it will help you get an estimate of the amount and then you can work out the interest you are paying, the monthly payments, and the other expenses and do a trial run to see if things are working out for you. The goal is to ensure you don’t stretch your budget to the limit and that you have money left with you for servicing the mortgage during the repayment period.

Features of a Mortgage Calculator 

A mortgage loan calculator should be simple and easy to use. It should also provide you with the kind of information or values that you want regarding the cost of a mortgage and what you are likely to be approved for. The calculator should tailor your mortgage calculations so that it represents the exact way the bank is charging. For example, a mortgage rate comparison helps you compare the different rates different banks are charging for their mortgage. You should determine which rate is going to work for you by doing comparisons. This way, you can get an affordable mortgage.

A fast, easy-to-use interface helps you to calculate your mortgage values in just a minute. If you encounter troubles when using the calculator, you should be able to get support, so a reliable access to help is needed.

In addition to comparing the rates for different banks, a mortgage calculator should tailor the calculations to match with those of your bank’s rates. The calculator allows you to customize the calculations to your bank. The loan interest calculator should also help you to create a schedule for payment of your mortgage while also allowing you to be send updates should the mortgage rates changes with time.

It is important to note that the different Canadian mortgage calculators may have different features, but they should be able to give you as much and accurate information and values as needed. They should also be updated often to reflect the current mortgage rates and those of individual banks.

Mortgage Amortization and Payment Frequency

 The amortization schedule or period is the length of time that a home buyer who has taken a loan will be able to take to pay off the entire mortgage. In Canada, the amortization period of a mortgage loan is 25 years. You may want to know that the amortization period is different from the mortgage term, which is the length of time you commit yourself to a specific rate, loan condition, and lender. The typical mortgage term in Canada is about 5 years.

When you talk of payment frequency, it may differ but many people would pay their mortgage loan once in a month. There is also the semi-monthly payment frequency, which implies that you pay twice a month meaning you have 24 yearly payments. Bi-weekly payments mean that you pay an amount after every two weeks and that would total to about 26 payments in a year. There are the accelerated bi-weekly payments, which mean you are paying the same amount that you would be paying if you had the semi monthly option, but this time, you will be making 26 instead of 24 payments in a year. The accelerated biweekly payments allow you to pay off your mortgage faster than in typical payments meaning you also save on the interest you have to pay.

When you make a down payment that is less than 20 percent of the home purchase price, you may have to pay for the mortgage default insurance. In this case, you may find that the maximum allowable amortization schedule or period, or the length of time you will be taking to pay the loan suppose the interest does not change, and you do all your regular payments, then the amortization period would be 25 years.

While mostly the amortization period is placed at 25 years, home buyers taking mortgage loans in Canada may accelerate that period to a shorter period so that they reduce the interest charges provided that they are comfortable with paying larger payments.

How to Use a Mortgage Calculator

 To use a mortgage loan interest calculator, you will enter the mortgage amount in Canadian dollars. You will also enter the mortgage term in years and then the interest rate in percentage. If you have a more advanced calculator, you may have other values to enter. When you enter the values as said, you will be able to get the total interest you will pay for that loan amount you entered. It is important to note that the Canadian mortgage interest calculator is only for Canada because different countries have different ways of calculating mortgage interest. The monthly mortgage payment calculator will show you the values you need for your monthly mortgage payment computations.

Manual Mortgage Calculator for Canada

 If you want to calculate the value for your mortgage manually, you may use this formula:

The above mathematical formula is for calculating the mortgage payments for every month in which case “M” stands for monthly payment and “P” stands for the principal amount, “r” stands for interest rate, and “n” stands for the number of payments you make.

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Canadian HST

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In Canada, you may find that in addition to the goods and services tax (GST), some territories and provinces have an additional form of sales tax they call the provincial sales tax (PST). In majority of the provinces, the GST is harmonized with PST to come up with what is called the Harmonized Sales Tax (HST). The rates may be different for the provincial sales tax, but the GST rate remains at 5%. Any business that is charging HST meaning both GST and PST will be able to claim the credits (Input tax credits – ITC) for the purchases that they made in time of their commercial activity. When filing for their HST returns, business owners can claim for their ITC or input tax credits. The input tax credits are supposed to be 100 percent of the HST that you incurred on supplies made for commercial activities. However, you should realize that you cannot claim input tax credits if the purchases made are related to providing supplies that are regarded or classed as exempts. Also, in most of the cases, HST paid on entertainment and meals only allows for 50% recoverable amount, so the other 50% may not be considered a deductible expense.

HST Rates

Where HST charges prevail, the rates encompass both the provincial sales tax and goods and services tax. The provincial sales tax rates may differ from one territory or province to another, and also not all territories and provinces charge the provincial rates. Where a province or territory does not apply PST, then the GST applies. For the case of Ontario, the HST is at 13%, a rate that became effective from the 1st of July 2010. The British Columbia returned to the GST rate of 5%, but before then, they had a HST rate of 12%.

Other provinces and territories that have maintained the HST system include New Brunswick, Nova Scotia, Newfoundland and Labrador, and Prince Edward Island where the rates of HST are at 15%.

A business will charge HST if it exceeds the limit of $30,000 that is considered a small supplier. A business may be a partnership, corporation, or sole proprietor and the taxable revenues before the expenses are deducted should be more than $30,000 in order for them to charge and pay the HST amount. If it’s a non-profit entity, the total taxable revenue should be more than $50,000 in order to be required to pay the tax. There are, however, businesses that regardless of their scale of operation, may not be classed as small supplier, for example, taxi and limousine operators. These have to get a GST account no matter the size of their income.

If you want to calculate the HST charge, you can use a HST calculator. The calculator has been programmed with the different PST rates and the standardized GST rates to have one single valued added sales tax that is called the HST. For example, if you use a GST/HST calculator, you find that for Alberta, CA, the rate is only 5% because this territory has not implemented the harmonized sales tax system. In other words, there is no provincial sales tax and the territory only uses the goods and services tax that is charged by the federal government.

The Canada Revenue Agency (CRA) is the only body that is responsible for collecting the provincial sales tax from the different territories. Although the territories or provinces have implemented the HST system, they cannot collect the taxes for themselves.

If you want to calculate the tax manually, you may use this formula;

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HST Calculation Formula:

HST Amount = Amount with out Sales tax*(HST Rate/100)

Another formula for calculating HST is; 

HST Registration

Registering for HST is the same as that of GST and therefore a business will need to visit the Canada Revenue Agency website page. You may also call CRA at 1-800-959-5525. A business number is needed prior to registering for the HST account.

In Quebec, you can register for HST by going to the Revenu Quebec web page or calling 1-800-567-4692. The date of registration depends on whether it is a voluntary registration or mandatory registration. Registering on voluntary basis even when you have not exceeded the limit for small supplier (meaning your revenues for the four calendars quarters has not surpassed $30,000 for a business or $50,000 for a non-profit organization) allows you to get input tax credits for the HST or GST amount that you paid. In essence, you find that most of the rules for registering for GST also apply for the HST.

You may not register for HST account if you provide HST exempt goods and services such as child care services, used residential housing, and music lessons. You may want to know what kind of services and goods are exempt of HST and GST.

Even when you don’t qualify for HST, you may want to register because it has some advantages. No matter the type of business you are doing, you directly or indirectly pay for HST on taxable goods and services that you acquire during the time of your commercial activity. If you have registered for HST, you can recover part of the HST amount you paid out for business purchases in what is called input tax credits. You may feel that because you are classed as a small supplier, there is no need for you to register for HST account. It makes sense if you have this account because of the input tax credits benefit.

One thing for sure is that you are paying for tax whether you are registered or not, because there are purchases you will make as a business. If you don’t have a HST account, there is no way you can get back the HST amount you paid out. You find that the amount you are paying as a small supplier to acquire services and supplies during the year may be quite a lot even if it does not reach the threshold of $30,000. So, there is economic sense when you have the HST account. Also, input tax credits are considered stackable, but only for a period of four years. The amount for the four years can total to huge chunk of money that could just be lost somewhere because you have not been able to claim it.

HST Rebate 

You may also apply for a rebate in case you made an error when charging the HST. This allows you to get a refund for the amount that you have paid and which you shouldn’t have paid. The HST rebate depends on the situation at hand. For example, the rebate application or claim for refund should be done within two years from when you remitted the amount deemed to be in error. If that period expires, you may not be able to get the refund. You also need to know that that you only submit one rebate application for a calendar month. The information required includes; the reason you say that the amount shouldn’t be remittable or payable and the way you did the calculations. You may want to provide copies of purchases and receipts to support your claim.

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Canadian GST

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In Canada, there are various kinds of value added tax and the most profound is the GST standing for Goods and Services Tax. GST is a multi-level value added tax that was introduced in the country on 1st January 1991. The tax system was introduced by the Prime Minister serving then, Brian Mulroney and the finance minister Michael Wilson. Goods and Services Tax replaced the hidden 13.5 percent MST, which standards for Manufacturer’s Sales Tax. The reason GST replaced MST was because it was impairing the ability of the manufacturing sector in the country to have a competitive playground for exporting goods and services. Today, the GST rate is at 5%, a figure that became effective on 1st January 2008. 

The Goods and Services Tax applies to most goods and services sold in Canada. However, despite this levy, some provinces still uphold provincial sales taxes and in this case, GST is charged on top of the provincial retail taxes. For example, provinces such as British Columbia, Manitoba, and Saskatchewan have both GST and Provincial Sales Tax (PST). Some other provinces including Ontario, PEI, New Brunswick, Nova Scotia, Labrador, and Newfoundland have combined both GST with PST to have what is known as Harmonized Sales Tax (HST).

The provinces that do not have provincial sales tax, they use GST. The harmonized sales tax and provincial sales tax rates are different for each province and a lot of products and services are exempted from the levy. It may be quite difficult for you to know what exactly you need to do and therefore invoicing is a big headache for businesses. However, you may want to look out for the PST, GST as well as the HST rates for the different provinces.

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Canadian GST Exempts and Zero-Rated Items 

Some of the items that may be exempted from GST include residential rent, sale of a used residential housing in the event that the owner isn’t the builder and there has been no substantial renovation done on the building. Exempts from GST may also be allowed on residential condominium fees, dental and medical services, college and university courses, toll charges, music lessons, and government or municipal services including licenses, recycling collection, garbage collection, sewerage, and water distribution. There are also zero-rated items where a purchaser may not pay GST for example basic groceries, prescription drugs, and medical devices. However, a seller may claim ITC credits for GST that was paid on expenses and purchases relating to the sale of such zero-rated items. 

Registering for Canadian GST

You will need to have a business number (BN) for you to register to collect GST. You may register online by visiting the Canada Revenue Agency (CRA) website. Even if you are registering a business or corporation, you will need to provide your personal information and other details regarding the business. Another way you can register is by phone. What you need to do is call CRA at CRA at 1-800-959-5525.

If you are registering for GST in Quebec, you will need to go to the webpage Quebec at http://www.revenuquebec.ca/en/sepf/services/sgp_inscription/default.aspx.

You may also register by phone at 1-800-567-4692.

Before registering for GST account, you may want to find out if you are required to do so or not. If you provide only exempted goods and services, then you cannot register for the tax account. You, however, are required to register for GST if you provide taxable supplies within Canada unless the supplies are connected with real property that has been sold other than during the course of the business. You also need to register if you aren’t classed as a small supplier.

You are a small supplier if your business sales don’t exceed a threshold of $30,000 within four consecutive calendar quarters. However, you may decide to have voluntary registration in the event that you provide taxable supplies within Canada. If your sales exceed $30,000 limit in a single calendar quarter, then you are not classed as a small supplier. You actually cease being a small supplier on the month that you exceeded the limit for a small supplier and therefore, you are required to register for GST within a period of 29 days from that supply, which crossed you over from the small supplier limit.

Once you register for GST account, you will be issued with a GST number that you pay your tax against. You will need to confirm the number once you have registered so that you make sure it is the correct one.

In voluntary GST registration, you should ensure that you charge and collect as well as remit the GST applying on the taxable supplies including property and services. You should also file GST returns regularly and have to remain registered for 12 months before cancelling the registration, or unless you stopped the commercial activity, you were taking. When registered, you can claim your input tax credit (ITC) for the GST paid and payable on purchases and operating expenses you made.  

Remitting GST Amounts

When you want to remit the GST amounts, you should know your GST filing period. It may be monthly, quarterly, or annually. When choosing a method of GST payment, you can go for electronic method, or pay at a financial institution, or remit by mail. If you are remitting a payment of $50,000 or more, that should be done electronically, but you may also pay at a financial institution. You cannot pay that kind of amount by mail. In electronic payment of your GST, you can go to the CRA’s “My Payment” option where you make payments online right from an account using CRA website platform. 

You can use a Canadian GSA calculator to calculate the amount of tax you should remit. This makes the process easy for you rather than struggling with the manual calculations. When using the calculator, you have to select the province or territory because there may be different rates or systems used for example, the Harmonized system. 

Applying For GST Rebate

Before you apply for GST rebate, you want to first determine if you’re eligible depending on your specific situation. Business persons may apply for rebates on GST amount paid if there were errors when they were charging the GST or if they paid for a non-taxable item.

You can visit the Canada Revenue Agency website to find out if you are eligible or not – just go to https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/gst-hst-rebates/general-gst-hst-rebate-application.html

If you, for example, paid a certain amount as GST and you discover there was some error you made to the supplier, you may contact the supplier to give you a refund or credit of that amount. If that works out, then you don’t have to apply for GST rebate, and that’s usually the easiest and simplest way to recover your money. But should the supplier fail to refund you or credit that amount, you can apply for the rebate to the CRA.

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Australian GST

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GST stands for Goods and Services Tax, and when used in the context of Australia, it is a broad-based tax usually calculated at 10 percent on most of the goods and services that are sold in the country. This tax applies to businesses in Australia that are registered for the valued added sales tax or for Goods and Services Tax. Any business having a turnover of $75,000 and more should be registered for GST.

How to Register for GST 

When registering for GST, a business or other organization will need to have what is called Australian Business Number or ABN. In the event that you are not a resident of Australia, there are rules that apply. For example, as of July 2017, registration for GST in Australia would apply to imported services as well as digital products that are connected with Australia.

For instance, in Australia, a product or service may be deemed connected with Australia if the purchaser is regarded as an Australian consumer; if that service or thing is done within Australia; or if you make sales through an enterprise or business that is set up or run in Australia.

Non-resident entities also may need to register for GST, but if you involve yourself in selling low value imported goods in Australia, you might not be required to register for this tax until a later date. The federal parliament passed a law that seeks to extend GST to low value importation of physical goods from July 2018.

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It is important that if you are a non-resident and running a business in Australia, you understand what the rules and laws say regarding GST.

To register for GST, you will need to visit an Australian Tax Office to do the registration there. You may also use the online business portal to register. Other ways you can register are through a registered tax agent or on phone to the ATO or Australian Tax Office.

There are various types of GST registration and they include:

  • Simplified GST registration: This is designed for non-residents that are classed as eligible and wanting to register through electronic ways and wanting to report and pay their tax easily and quickly.
  • Standard GST registration: This is for entities or organizations that have an ABN. It is the form of registration designed for entities making supplies connected with Australia and those that issue tax invoices and would want to claim their GST credits.
  • Standard claim only: This GST registration is made for entities that do not have an ABN or for non-residents that have an enterprise outside of Australian and which are not entitled to have an ABN or do not make supplies that are connected with Australia, or those that want to claim their GST credits.
  • Voluntary registration: For entities that are not required by law to register for GST, they may still register if they so wish, but when they do this, they will need to remain registered for not less than 12 months.

If you have not yet registered for GST, it is paramount that you constantly check each month to see if you have hit the threshold taxable amount that is $75,000 or you can estimate if you may exceed that amount come the end of the financial year. If that is case, you should register within 21 days of reaching the threshold. Even if you have multiple businesses, you need just register once.

Australian GST Rates

The Goods and Services Tax in Australia, popularly referred to as GST is simply a value added tax that is capped at 10 percent of most of the sales on goods and services. It is levied on many of the transactions involved in the production process, but is usually refunded to almost all parties involved in the chain of production apart from the final consumer. GST was introduced in mid 2000 by Howard Government and it replaced the previous sales tax system or federal wholesale sales tax that was phased out. For a business or enterprise to register for GST, it needs to meet or exceed the turnover threshold of $75,000 Australian dollars or $150,000 Australian dollars in case of non-profit organizations.

Calculating Australian GST

If you want to find out the amount of GST that has been added in the price, then you will want to divide the price you have by 11. For example, if you have a price of $220, then the added GST amount on that price will be $220/11 and that is $20.

One thing to mention here is that calculating reverse GST amounts is pretty tricky. For example, $200 + 10% gives you $ 220, but if you take $220 – 10%, you find that it’s not $200. It is actually $198.

If you want to find the price of a product without GST, then you will need to divide the price by 1.1. For example, $220/1.1 and this will give you $200.

Because working out numbers can be so difficult, you can eliminate the manual work by using the Australian GST calculators.

Formula to Calculate GST in Australia

Amount before Sales Tax*GST rate/100)= GST Amount

 GST Refund

If you are entitled to a GST credit claim or indirect tax refund claims, you need to do so within a period of four years. This is four years after the earliest due date based on the earliest activity statement you should have made that claim. In order for the claim to be approved, you should revise your activity statement in which you made an error and then request a correction to be made. The request should be done in writing. You then need to correct the error you made in a later activity statement.

GST on Imports and Exemptions

The federal government of Australia levies sales tax on multi-stages where a 10 percent rate of tax is applied on the supply of most products or goods and services that are sold or consumed in Australia. The Australian GST system was first introduced on 1st July 2000 by the government, which was in office then – the Howard Liberal government. However, it is important to note that there are some supplies or goods and services that may be exempted from this tax and are considered to be GST-free.

For example, a majority of the basic foodstuffs and educational services may not be levied the tax. Similarly, medical services and exports are said to be GST-free. Other products or good and services are considered input-taxed for example financial services and residential accommodation.

Government charges are exempted from the tax and on top of that, there are some services or goods that may not be levied the tax, especially those that are classed as outside the scope of Australian Goods and Services Tax. The revenue that is raised from this form of tax is usually distributed to the different states of the country. Businesses or institutions and organizations that are registered for GST and would want to know the amount they are required to submit or pay, may want to use an Australian GST calculator.

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UK VAT

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Value added tax (VAT) is a consumption tax system applied in the United Kingdom. It is considered the third-largest revenue earning source for the national government after the income tax and the National Insurance. VAT was introduced back in 1973 and it collected by HM Revenue and Customs. This tax system applies to a majority of goods and services that are provided by businesses in the UK. It also applies to some imported goods and services.

This consumption tax is an indirect tax that is charged to the consumer but paid by registered businesses. The tax is seen as a consumption tax because it is usually charged on items bought by people, and by indirect tax, it means that it’s collected and remitted by businesses rather than the people who pay the tax.

VAT Rates

The standard rate of value added tax in UK is 20% and this rate applied to most of the purchases made by the consumer. Businesses should also be aware that there are some other VAT rates that are applied in the United Kingdom. For example, there is the reduced rate VAT that is charged on things like sanitary products, children’s car seats, energy saving measures and others. This reduced rate is charged at 5%.

There is also the zero rate, which means that a 0% rate is applied on specific goods and services. For example, zero rate VAT applies to most books, children’s clothes, newspapers, and food.  While there is no amount charged on these goods, businesses are required to record and report zero rate goods on their VAT return. In addition to that, there are items that are considered exempt. For example, financial and property transactions, and postage stamps are exempt items from the tax.

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In 1973, VAT replaced the Purchase Tax. In the Purchase Tax, tax was levied at the production and distribution levels and not at the selling level, as with the case of VAT.

Because VAT rates can change, businesses should be updated with the current applicable rates and ensure that their invoices and accounts are also updated. Business owners can use VAT calculators to get the right amount of tax that they should pay. The VAT calculations are programmed to incorporate the current VAT rates.

The 20% VAT rate was introduced on 4th January 2011 and before that the rate was at 17.5%

Who Pays VAT in UK

VAT in the UK is charged, collected, and remitted by businesses having a turnover that exceeds £85,000.  This means that if your business has a turnover exceeding this limit, it should register to charge and pay VAT amounts on products and services they sell. There is also the option where businesses can register voluntarily even when they have not passed the limit. Businesses that register to charge VAT should remit the same to HMRC during the time they file VAT returns.

There are different ways businesses can pay VAT to HMRC. For example, businesses can pay using their phones or online through the Faster Payments platform. They can also pay by CHAPS using a form that they fill online. Besides these two payment options, businesses in the UK may pay their VAT through:

·         BACs

·         Direct debit

·         Debit or credit card

·         Standing orders

·         At building society or a bank.

Registering for VAT 

When you register for VAT, you are given a VAT registration certification. The certificate will confirm the VAT number, the date you are required to remit your VAT payment and returns. It also confirms the effective date of the VAT registration for your business. Usually, the effective date of VAT registration is the date when your business reached the threshold or limit, and in case of voluntary registration, it’s the date when you asked to register.

You can register online for VAT in UK. When you register online, you create an online VAT account, which may also be referred to as Government Gateway account. You may also use an agent to submit VAT returns and handled matters pertaining to your VAT with HMRC on your behalf.

Charging VAT

Since VAT is an indirect tax, businesses collect the levy on behalf of the national government. Therefore, businesses should add the tax on the amount they charge to customers for services and goods bought. Businesses need to ensure that they add the amount correctly at the point of sale.

 When creating invoice to reflect on VAT rate and amount, businesses need to ensure the following information is available:

  • An invoice number
  • The date of the invoice including the date in which the business supplied the goods and services in the event that it’s different to invoice date.
  • Business contact information including the name and address
  • The VAT registration number
  • Contact information of the customer including the name and address.
  • Description of the products and services that are being invoiced for.

On top of that, a business should ensure that it provides information for each item featuring on the invoice including:

  • VAT rate
  • Quantity of items sold
  • Unit price in exclusion of VAT
  • VAT amount being paid
  • Total amount the customer pays excluding VAT
  • And any cash discounts.

Businesses are required to submit VAT returns to the HMRC in every 3 months. The 3 months’ period is known as the accounting period of the business. The VAT returns record things such as the total sales and purchases, amount of VAT the business owe, and the amount of VAT a business can reclaim. The VAT returns also feature the VAT refund from HMRC.

What are VAT returns? When we talk of VAT returns, we simply mean the record of the sales and purchases that your business has made and these should be submitted in every three months.

VAT Calculator

When calculating the amount you are required to pay for VAT, you may want to use a VAT calculator. The calculator is helpful if you are confused over how to calculate the VAT and it eliminates the manual method of calculating the VAT amount.

Formula for Calculate VAT in UK

amount inclusive of VAT = Amount excluding VAT + VAT amount

Amount excluding VAT*(VAT rate/100)=VAT Amount

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Posted in UK

Excise Duty

Excise Duty 

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In the world of today, taxes represent so much more than monetary aid given to the government. It is the money that goes into the country’s development for a better future for the nation. Since India is a democratic country, this aid is obtained through taxation. Both the state and central government are entailed to levy out taxes. There are several tax types, which are levied through the local or municipality levels.

However, these small taxes affect the area that fall under their jurisdiction. Excise duty tax however fall under the central government. It means that everyone in the country can pay this tax. This tax is imposed on certain goods on their sales catering or production or licenses on specified activities and services.

Excise duty is an inland tax. It is also a form of indirect tax. They are generally taxes to be collected by retail stores or a body which acts as an intermediary from a person who bears the tax payment responsibility as the consumer. The producer is then required to pay the tax to the administration.

Excise duty falls under excise duty Act of 1944. The state government charges commodities such as alcohol, narcotics or even alcoholic products. This fall under the state government jurisdiction. The other goods fall under the central government jurisdiction. The tax is collected by the administration when they move from a factory and the dispatch.

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Rules and act governing excise duty collection

The charges apply to textile commodities such as yawn and fiber. Under the 1944 Act, tax is imposed on production and the manufacture of goods. The tax rates are well specified under the tariff excise Act of 1985.

Central board that deals with customs and excise

It was established by George Robison in 1855. The British general governor at that time was the head. Its main purpose was to manage and administer custom laws in the country and import duty collection and revenue of land. The laws governing excise duty tax are implemented by this statutory body. Its functions include;

  1. Policy formulation for the collection and levying of the excise and custom duties
  2. The management of narcotics, customs and the central excise according to the set limits
  3. Goods smuggling prevention

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Excise duty purposes

Taxes are generally levied so as to ensure the smooth operation of all public services in the county.

  1. It ensures that the sector of manufacturing adequately involves themselves the taxation process.it is also an important tool which is used in the control of certain goods in the market such as narcotics and even alcohol. Theincrease in there taxation rate will reduce the purchasing power.
  2. Tax in general enables the administration to construct roads, railways and other amenities that the public will use. It also helps to make sure that the country’s defense forces are adequately catered for. Therefore citizen residents are able to live in peace without nay fear.
  3. The maintenance of water treatment and the country’s cleanliness in all public areas are funded by the taxes paid.

Sales Tax

Sales Tax 

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Trade has created an integral segment of the world’s history. It has been helpful in shaping and developing the world in to what it is today. A world without trading wouldn’t be completely functional. This concept made people to move around to other parts of the world so as to find trading partners. Therefore eventually the demographic of the world has been greatly changed. This concept is very important in the world therefore the governments found a way to benefit from this via sales taxes.

Sales tax is a form of tax payment to the government when goods and services are sold. Sales taxes are a form of indirect taxation and are charged from the purchasing point or during the exchange of goods that are taxable. The percentage charged depends on the value of the services or goods.

The rules governing this tax type depend on the administration, which is in power and the policies enforced. Sales tax is simply the additional money one has to pay while purchasing services or goods.

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Types of the sales tax

This concept relies on the governing body and the principles they decide to implement. However, there are some general sales taxes, which are applicable to most countries. Below are the different types;

  1. Sales taxes for retail section
  2. Sales taxes for the manufacturers section
  3. Sales taxes for wholesale section
  4. Use tax
  5. Value added tax

India has managed to emerge as a sound county of democracy. Moreover, over the years, it has managed to achieve great progress in the economy as compared to several other countries. Taxes collected by the administration have played a vital role in this development. The government follows the central union administration at the top and the state administration at state level system.

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The Central Act of Sales Tax, 1956

It’s the sales tax rules that govern the whole entire country. This Act enables the collection of sales taxes of various services and commodities all over the country. The amount of sale tax is payable to the state in which the goods or services are purchased and is determined by the policies implemented in that state.

Objectives of Central Act of Sales Tax

This Act was created with the main goal of making the task of tax collection much simple and streamlined. The main objectives have been stated below.

  1. Provide for levying provision, collection and the dissemination of taxes gathered from the sales of goods via interstate trades
  2. Principle of frame so as to determine when the sales and goods purchase occur
  3. The classification of certain goods as important and special during commerce and trade
  4. To be the authority in the solving of interstate disputes when they occur

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State administration taxes

State governments have the powers to impose and collect sales taxes within their jurisdiction. This is helpful in that it enables them meet their requirements financially. The sales taxes might vary from one state to another. This is the reason as to why some goods are much cheaper in other states as compared to others.

Service Tax

Service Tax 

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Service tax refers to tax paid to the administration of India from various service providers since they are offering and providing certain services. A person who is required to pay this tax can be either a service provider or a receiver or simply any other individual responsible in the provision of certain services. This is a form of indirect tax since the providers of the services pay the required tax amount and later on recover the cost from the service receivers who will purchase or receive the service, which has been taxed.

It is a type of tax you pay to the government for enjoying certain services. Service tax was implemented in India in 1994 following the Finance Act. The services, which tax was imposed on were considered taxable under the Act section 65.

The 2012 budget increased the range of services, which were then taxable under the Act. The services which were incorporated included long or short term lodging services provided by hotels or even private guest houses as well as services provided by AC restaurants.

As per the new regulations implemented, the service tax charge is applicable to individuals as well as various companies. Individuals can use cash in the service tax payment while companies pay it on the accrual basis. This tax can only be paid if the service value exceeds Rs.10 lakh as per one financial year.

However the new regulations which have been recently added are not applicable to the Kashmir and Jammu state.

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Rules governing this tax

As the Finance Act in 1994, the government came up with rules so as to govern the collection of service tax.

  1. Short commencement and title rule
  2. Definitions rules
  3. Officers appointment rules
  4. Registration rules

4[a] Information on services that are taxable to be provided on challan, bill or invoice

4[b] Consignment note rule

  1. Records rules

5[a] Registered premises access

  1. Service tax payment

6[a] Service export

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  1. Returns

7[a] taxable services return provided by the operators of transport

7 [b] return revision

7 [c] amountpaid for furnishing returns delay

  1. Central excise commissioner appeal
  2. Appellate tribunal appeals form
  3. Procedures and facilities for large tax payers

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Payment of the service tax in India

You can easily make payment on the service tax using a G.A.R-7. Challanwhich is found at several banks in certain branches which have been specified. You are required to properly fill in the challan and then submit it at you bank. However one can also make the required payment online while using epayment facility which has been offered by central bank.

If an individual or a companyfail in topay tax. They shall be penalized under the 76, 78 and 77 section of the act of finance.

Normally the tax is payed on all services apart from those found in the negative service list. Providers for government services as well as those in the private sector are liable in the tax payment. However there are sometimes few scenarios that are exempted from taxation.

VAT

VAT

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Taxation is the process through which the government levies charges on services, goods and transitions. This is a very important power that a government possesses. The tax is applicable at certain stages of the goods and services purchase .VAT is one of such tax.

VAT can be defined as the tax imposed on the sales of services and goods commodities are sold to the consumers.

The VAT is regarded as a very vital integral section of a country’s GDP. While the VAT is imposed on the sale of services and goods and paid to the administration by the producers. The cost of the tax is however catered for by the customers of the commodities. Thus it’s regarded as an indirect form of taxation paid by costumers to the administration through the producers or sellers of the commodities.

VAT is implemented as a multiple stage form of taxation. The charges occur at every stage of taxation of the services and goods sale or purchase. Any individual who is earning an annual turnover of Rs.5 lacks and more should register as a VAT payer. This tax is imposed on goods and services that are either local on imported.

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Features of VAT in India

  • Similar services and goods are to be taxed the same for example a television regardless of the brand type is to be taxed the same.
  • VAT is to be levied at each production stage and therefore making the taxation process more transparent and simple
  • VAT greatly reduces the chances of tax evasion and encourages tax compliance.
  • Encourages lots of transparency of goods and services sales to the most tiniest level

VAT calculations

It is in fact calculated as the set difference between the output tax and the input tax.

VAT = INPUT TAX – OUTPUT TAX.

Output tax refers to the tax that a seller receives for his or her services and goods sale and input tax refers to the tax the seller is expected to pay for the raw materials which ate required in the production of his services and goods.

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The benefits of VAT

  • India was one of the late countries to introduce the implementation of VAT. The taxation process was exploited by business people who would find loopholes present in the taxation process therefore easily avoiding taxes. VAT was introduced into the country so as to minimize the level of tax evasion, which was taking place. It also renders the taxation process transparent and presents uniformity in payment process of tax.
  • There are no exemptions under this system since the levying has been imposed at each production stage so as to ensure better compliance and less exploitation of the present loopholes.
  • When imposed properly it will form a very important instrument of tax consolidation in the country and therefore be of great help in solving deficit issues
  • Since VAT has been accepted globally, India is able to properly integrate into trade with other countries.

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Therefore, VAT should be embraced in a country because it plays a vital role in the economy.

Posted in VAT

save your tax

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Its financial year ending time!!! Hurry up save your tax 

  • Its March, the end of financial year and from April a new financial year will be started. And now you have to pay your tax on your earning.
  • From an employee’s prospective here I would like to highlight that each employee of an organization (With a taxable salary) will make an all out effort to save some tax on his/her earning.
  • However most of us unaware about the various ways to save the tax under the several section of IT Act (Income Tax Act). Yes, The government of India in the IT act has made some provision to get rebate and exemption on your income taxc.
  • Here we will discuss in detail about the various exemption and rebates of the IT Act.

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Income Tax Slab:

  • Before proceeding for the tax saving options, let me tell you about the different slab of Income tax and the slab is applicable according to your monthly gross salary.
  • Here is the table for tax slab, have a look:

 

 

Upto Rs. 2,50,000 Nil Nil
Rs. 2,50,001 to Rs. 3,00,000 10% 10%
Rs. 3,00,001 to Rs. 5,00,000 10% 10%
Rs. 5,00,001 to Rs. 10,00,000 20% 20%
Above Rs. 10,00,000 30% 30%
  • Yes for women, senior citizens and PH the tax slab vary and they will get some additional discount.

Tax saving options:

  • Under the section 80C of income Tax an individual can get an exemption and rebate upto 1.5 lacs per annum on the total income tax for a financial year.
  • Now let me highlight you what is Section 80 C and how a person can get rebate under section 80C.

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  1. Insurance or LIC premium: Any LIC or insurance policy on your or our spouse name you will get the rebate. Whatever premium you are paying for the policy for a financial year, the same amount of rebate you will get in your income tax.
  2. PPF: It is the most attractive, safe, high rate of return and highly liquidity option to save your hard earned money. In the current financial year whatever money you have saved or deposited in the PPF account, you will get the same amount of exemption in the income tax.
  3. NSC Deposit: This is the scheme run by the postal dept of India. You can purchase a NSC Certificate according to your caliber and in the return you will also get the tax rebate while paying the income tax. Of course it is a safest and attractive investment.
  4. Mutual fund, ELIS and 80 CG equity plan: You can also invest in Mutual fund, ELIS and 80 CG equity plan. According to your invested amount you will get the tax emption.
  5. Child education and hostel exemption: If any of your child is studying and for that you have taken any bank loan than also you will get some exemption. The interest whatever you are paying in a financial year, the same percentage of exemption you will get in the income tax. And so in case of the hostel fees for your child.
  6. Loss of house property and capital gain: This is also another option by virtue of which you can save your tax.
  7. Housing loan interest: Whenever you take a housing loan from bank, monthly you need to pay the interest. You will get tax exemption according to your paid interest on your housing loan.

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So all total you can show a saving of 15. Lacs for a financial year and you will get the tax exemption of 1.5 lacs for a financial year.

Good news!!!

Employees those who are under the NPS(New pension scheme) can get a tax benefit of another 50000 for a financial year. Just by saving (Max 50000) in the NPS, you can claim the tax exemption of 50000 for a financial year.

Posted in Tax

Self-Assessment Tax

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This refers to any balance paid tax through the assessee on income that was assessed after taking advance tax and TDS into play before the filling of the return income tax. All corporations and individuals are liable to self-assessment tax payment. There are certainly no precise dates to make the required payments. It is only stated that defaults in the tax payment or filling the required returns will start fetching interest as from 31stJuly.

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Tax liability will be calculated after the consideration of various exemptions and deductions. In the event that the sum of entire tax paid [TDS total and tax advance] is lesser than the entire tax liability. This means that the remaining balance tax is owed to the government. This can either be from a corporation or an individual. Therefore,it’s paid as assessment self-tax.

There two different procedures through which a person can make payment on the tax. It can either be direct payment mode or online payments mode. Below both procedures will be discussed and elaborated on.

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Direct payment mode

A person or a corporation can make the necessary payments through filling of the challan tax payment, ITNS 280. The Challans can be found at the selected bank branches that have a department that deals with income tax.

 

Online payment mode

The tax could be payed by simply visiting their link https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp

 

When you are in the website, select the Challan No. ITNS 280, as it is the number which is used in the payment of the corporation tax and income tax.

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  • Choose Tax that is applicable as[income tax – 0021 – other than other establishments]
  • Choose the year of assessment
  • Then choose the payment type as assessment self-tax and go ahead to fill in the required information
  • The online payment is allowed to be made by net banking but not debit cards
  • You are then required to choose the correct year of assessment
  • Fill the required form and afterwards click on proceed
  • Give all the required tax details on the form
  • Key in the payable tax amount
  • Afterward confirm and then proceed

 

The tax income return can only be filled if you have paid the due tax to the central government. Defaulting on tax payment is regarded as a criminal offense and an individual or certain corporation is liable to penalties punishable the law courts system. Moreover, the more you delay or postpone the payment the more the interest amount grows. This will go on till the time you will decide to make necessary required payments. It is important to make the appropriate payments on time before the tax cost became too expensive to deal with.

Once you have cleared on tax payment it will soon after show on 26AS form within at least 2 to 3 days since the payment date. It is important to ensure you select the correct year since the wrong year choice will lead you pay the tax amount of the wrong chosen year. However, this can be corrected through rectification challan process. In case there is any occurring problem please contact the tax department and ask for assistance.