Taxation in India&

Nationalized bank

by: Abhishek

Disclaimero All images are for representational purposes only. All images are property of and belong to their respective owners.

o Presentation has been prepared from a speaker’s point of view and thus it has not been described in detail.o Law updated as per Finance Act, 2016o Suggestions for improvement may be

mailed toabhishek.tak@icai.org

Taxation

Ministry of FinanceFM- MR. ARUN JAITLEY

• Department of Economic Affairs

• Department of Expenditure

• Department of Revenue

• Department of Financial Services

• Department of Disinvestment

Constitutional authority•Nature of TaxEntry No.•Taxes on Income82•Duties of Custom83•Duties of Excise84•Taxes on Services92C•Residuary 97

Union list

Govt.’s primary source of

revenue is tax

TAXKIN

D O

F TAXES

Compulsory Extortion of money under any law for the time being in force.

Direct Tax

• On persons for Income earned

• Borne by the person on whom it is levied

• E.g. Income tax, House tax

Indirect Tax

• On Goods and services

• Borne by ultimate consumer

• E.g. Excise duty, Custom duty, Service tax, VAT

CBDTCBEC

…………………………………………………………………….Department of REVENUE

RELIEF TO SMALL TAX PAYERS Raise the ceiling of tax rebate under section 87A from

Rs.2000 to 5000 to lessen tax burden on individuals with income upto Rs.5 lac

100% deduction of profits for 3 out of 5 years for startups setup during April, 2016 to March, 2019. › MAT will apply in such cases.

Lower the corporate tax rate for the next financial year for small enterprises i.e. co’s with turnover not exceeding Rs.5 crore in the financial year ending March 2016 To 29% plus surcharge and cess.› Earlier 30%

Finance Act, 2016

Undisclosed incomeFinance Act, 2016

Domestic taxpayers can declare undisclosed income or

by paying tax at 30%, and› surcharge at 7.5% and penalty at 7.5%;

which is a total of 45% of the undisclosed income. Declarants will have immunity from prosecution.

Surcharge levied at 7.5% of undisclosed income will be called Krishi Kalyan surcharge to be used for agriculture and rural economy.

29th Feb 2016; Times on India

Indirect taxes Excise Act,1944

› Charge duty on Manufacturing or producing of Goods.

› Excise Duty called Central Value added tax (CENVAT)

Customs Act,1962› Charge duty on Import and Export› Custom Duty means Import duty or Export

duty

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Service TaxIntroduced in 1994 by FM Mr. Manmohan singh with 3 services, namely:- Stock Brokers Service, General Insurance Service and Telephone Services. Than Expanded to 120 services.

Govt. brought an end to Selective Taxation Scheme and brought out Comprehensive Taxation Scheme (Negative List Regime).

Negative list introduced by FM P. Chidambaram in 2012 budget speech.

Goods and Service Tax (GST) in pipeline, soon to replace existing tax laws.Tax on Service Levied @14%;o on value of all services (other than Negative list)o Provided or agreed to be provided in Taxable Territoryo Carried out by a person for another.

Cess

Swachh Bharat Cess at a rate of 2% or less on all servicesand

15thNovember,2015 the date from which Swachh Bharat Cess (SBC) come into effect @ 0.50% on value of service.

Levy by the govt. for a specific purpose and the collection is utilized for the intended purpose only.

Recently introduced cess: Krishi Kalyan Cess

(KKC) on all taxable services

w.e.f. 01-06-2016, to finance and promote initiatives to improve agriculture and welfare of farmers at rate 0.50%.

BankingNationalization

RBICentral Bank & Supreme Monetary authorityEstablished on 1935; Nationalization 1 Jan 1949.

Scheduled Bank

•bank which is listed in the 2nd Schedule of the Reserve Bank of India Act, 1934

Non Scheduled Bank

•Banks not under this Schedule are called non-scheduled banks

What is scheduled bank?

Scheduled Bank

Sch. State Co-op bank

Sch. Urban Co-op bank

Nationalized banks

SBI & Associates Private banks Foreign banks Regional Rural

bank

Commercial Bank Cooperative bank

“nationalized banks” those banks which were “nationalized” under the “Banking Companies (Acquisition and Transfer of Undertaking) Bill”.

List of Banks Operate in India at web site of Ministry of Financial Services

Public sector Bank

•where the Government holds the majority stake (more than 50% of the shares) are known as public sector banks

Private sector Bank

•where private institutions or individuals hold more than 50% of the shares are known as private sector banks

• Govt. holding is 58.60%SBI

• Govt. stake is 76.50%IDBI

• Majority by Individ.ICICI

• Govt. stake is 29%Axis

Eg.

Q. Which of the following statements are correct? All public sector banks in India are nationalized

banksAll nationalized banks are public sector banks in India.

Note: both above are not nationalized by govt.

NATIONALIZED BANK

Public Sector Banks (PSBs) are banks where a majority stake (i.e. more than 50%) is held by a government.

The shares of these banks are listed on stock exchanges.

[21 Nationalized banks + 6 State bank group (SBI + 5 associates) ]= 27 PSBs in India

GOVERNMENT CO

MPAN

Y

“Government company” means any company in which not less than 51% of the paid-up share capital is held by› the Central Government, or › any State Government or Governments, or› partly by the Central Government and partly

by one or more State Governments,

Email: abhishek.tak@icai.org