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May 28, 2016
Service tax is a tax levied by the government on service providers on certain service transactions, but is actually borne by the customers. It is categorized under Indirect Tax and came into existence under the Finance Act, 1994. Union Finance Minister, Arun Jaitley, in his budget announcements proposed to impose a cess, called the Krishi Kalyan Cess, @ 0.5% on all taxable services. The present rate of service tax will be hiked to 15 per cent from June 1, 2016, from 14.5 per cent. Take a look at what gets expensive:

service-tax-2016


Phone Bills: Your phone bills are going to go up. So, pay a good 15 per cent now on service tax on phone bills.

Restaurant Bills :If you are dining in a restaurant that already has service tax applicable, you are going to pay more on your eating out. Though 0.5 per cent on a single bill may not mean much, frequent diners may end-up paying a lot during the year.

Travelling: You will have to pay more for air travel, as there is a service tax on tour operators and travel agents.

Financial services, where there is already a service tax, like insurance would become costlier from June 1, 2016.

The proceeds of the Krishi Kalyan Cess shall first be credited to the Consolidated Fund of India and the Central Government may, after due appropriation made by Parliament by law in this behalf, utilise such sums of money of the Krishi Kalyan Cess for such specified purposes.

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March 31, 2016

Benefits Of The 1031 Tax Exchange For Property Investors



If you’re a property investor - or are considering putting your money into real estate, - make sure you are aware of the 1031 exchange. It’s a common strategy that many investors use to limit their exposure to tax. In IRC 1031, investors can sell or give up a property and reinvest the proceeds into another, with the tax due being deferred. Let’s take a closer look at some of the many benefits the 1031 exchange can bring anyone seeking to bolster their property portfolio.

Defer your taxes

As we mentioned above, the 1031 exchange enables you to defer the tax you have to pay on a sold property at a later date. In effect, this allows you to use money due to the government to grow your property holding and defer your tax-deferred exchanges.

Reinvestment

The 1031 exchange allows you to reinvest that tax money into new property, giving you more leverage when it comes to prices. You might be able to buy a property that is significantly more valuable than you could before, as an example. Or, you could even purchase several properties, and enjoy all the investment benefits that come with it.


Climb the ladder

With this in mind, it’s clear that it is possible to use the 1031 exchange to trade up your property for one of higher value. And, you can keep doing this for as long as you wish. This puts you in a position of plowing as much money as possible into your portfolio and growing it to a level that would otherwise be out of reach. It will help you become a lot more competitive. Even with a single property, there are significant tax gains to draw upon. You can expect a large increase in your cash flow and your net worth will rise. Not only that but when your portfolio is passed down to your kids, it could be possible for them to eliminate a lot of their tax burden. We’ll look a little closer at that later.

Easing your responsibilities

As any property investor will tell you, the process isn’t as easy as buying a building and watching the profits roll in. You will be responsible for your tenants, and when you ramp this up across several properties, it can be a high workload. Not to mention the expense! Struggling investors can instead use the 1031 exchange to replace current properties with managed alternatives. It’s an easier way to manage your portfolio when your responsibilities are bursting at the seams.

No legacy

As Benjamin Franklin once said, nothing is certain in life except death and taxes. And, even death can’t escape the IRS - your heirs will be liable for all your unpaid tax. However, if you die after using 1031, things are a little different. You will still accumulate capital gains tax that needs to be paid. But, your heirs will not be liable for those accumulations. Instead, they will only have to pay for the adjusted, current value of the property.

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July 14, 2014
Central Board of Direct Taxes (CBDT) has launched a new online 'tax calculator' for computing annual I-T liability.The 'tax calculator' is a computer based program hosted on the web-based platform of the I-T department and is meant for the aid of the taxpayer before they file their final Income Tax Return (ITR). The 'calculator' is updated every fiscal after budget and is calibrated by the Central Board of Direct Taxes according to the new announcements made by the Finance Minister in respect of tax rates.


income-tax-calculator-india

The 'tax calculator' computes the total tax liability of an individual or any other category of taxpayer under various heads like income from house property, capital gains, profits and gains of business or profession and agricultural income among others.

The department will soon start updating taxpayers about the status of their I-T refunds and processing of certain tax statements by sending real-time SMSes and emails, on similar lines as that of credit card and bank transactions at present.

You can access the calculator here at:  Income Tax Calculator
Also e-payment facility can be availed here: E-Tax payment system


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