Ashok Zawar & Co

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Direct Tax »

Compliance to the numerous government laws requires in-depth knowledge of various tax laws. In this ever-changing scenario where tax laws are amended every now and
then, services of an expert have become the need of the hour.

Even a minor lapse can cost the organization huge amount of money. We at Lakhani & Lakhani provide the required specialized services and formulate effective strategies
which enable the organization to comply with the rules of the land.

The above can be broadly classified as follows:

01. Direct Taxes (including income Tax, TDS & Wealth Tax)
02. Indirect Taxes (including Vat, Service Tax & Excise )
03. Company Law Matters

img     The direct tax services are offered to wide range of persons being:

    Individuals-resident & non-resident
    Hindu Undivided Families
    Partnership firms
    Private & Public Companies
    LLP’s
1.1 Income Tax
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1.1 (a) Individual Taxation

Any income earned during the year by an individual, in or outside India, is subject to Income Tax. For computing the income chargeable to tax there are certain exemptions
and deductions which need to be claimed. Further, to this tax amount, prepaid taxes in the form of TDS or advance tax is deducted and the balance is paid via Self
assessment Tax challan. The details of the same are furnished in the Income Tax Return.

Income can be earned from various sources. The heads of income can be broadly classified as follows:
   Salary Income
   Income From House Property
   Income From Business or Profession
   Capital gains
   Income From Other Sources
   An individual can be classified as a resident or a non-resident. Residential status of an individual can be determined on the basis of the following conditions:-


» Basic Conditions:-


If he is in India for
   182 days or more; or
   60 days or more (the period of 60 days stands changed to 182 days or more for Indian citizens or persons of Indian origins on a visit to India; and also for citizens of
   India who leave India for employment abroad as member of a crew of an Indian ship) during the tax year, and an aggregate of 365 days or more during the four years
   preceding the tax year.


» Additional Conditions:-


   He has been resident in India in atleast 2 out of 10 previous years immediately preceding the relevant previous year and
   He has been in India for a period of 730 days or more during 7 years immediately preceeding the relevant previous year.

On the basis of the above conditions, we can determine the residential status of an individual as follows:

Resident and ordinarily resident Resident and not ordinarily resident Non Resident
Must satisfy at least one of the basic
conditions and both of the additional conditions.
Must satisfy at least one of the basic
conditions and one or none of the additional conditions
.
Should not satisfy any of the basic conditions.

   Similarly the incidence of tax is as applicable as follows:-

Resident and ordinarily resident Resident and not ordinarily resident Non Resident
Income which is received or deemed to be received
in India in the previous year by
or on his behalf.
Income which is received or deemed to be
received in India in the previous year by
or on his behalf.
.
Income which is received or deemed to be
received in India in the previous year by or
on his behalf.
Income which accrues or arises or is deemed to
accrue or arise to him in India during the previous year.
Income which accrues or arises or is deemed to
accrue or arise to him in India during the previous year.
Income which accrues or arises or is deemed
to accrue or arise to him in India
during the previous year.
Income which accrues or arises to him outside India
during the previous year.
Income earned from business or profession controlled
from a place within India.
 

1.1 (b) Corporate Taxation

The residential status of a company can be determined as follows:

  • An Indian company is always a resident in India.
  • A foreign company is resident in India only if, during the previous year, the control and management of its affairs are situated wholly in India.
  • A foreign company is treated as non-resident if, during the previous year, the control and management of its affairs are situated either wholly or partly out of India.

» Minimum Alternate Tax

Normally, a company is liable to pay tax on the income computed in accordance with the provisions of the income tax Act, but the profit and loss account of the
company is prepared as per provisions of the Companies Act. Under the existing provisions of Section 115JB(1), a company is required to pay a minimum
alternate tax(MAT) on its book profit, if the income tax payable on the total income, as computed under the Act in respect of any previous year relevant to the
assessment year is less than the MAT. The amount of tax paid under the said section is allowed to be carried forward and set off against tax payable up
to the tenth assessment year immediately succeeding the assessment year in which the tax credit becomes allowable under the provisions of section 115JAA.
The rate of MAT for the assessment year 2012-13 is eighteen and one-half percent.

» Dividend Distribution Tax

A domestic company is liable to pay additional income tax on any amount declared, distributed or paid by such company by way of dividend (whether interim or
otherwise) on or after 1-06-1997, whether out of current or accumulated profits. Such additional income tax is payable @ 15% of the amount so distributed
+ applicable surcharge + education cess + secondary & higher education cess for the assessment year 2012-13. This additional tax shall be payable even if no
income tax is payable by such company on its total income.

» Transfer Pricing

As Income Tax Act is prone to many changes, decision maker should be perfectly updated with new amendments. Our team of professionals is abreast with the
current knowledge so that they can provide customized and innovative solutions to our clients. We provide the following advisory services to our clients:-

  • Recommending tax strategies which would minimize tax incidence.
  • Tax planning for Non-Resident Indians (NRI's), overseas entities desirous of setting up a business in India.
  • Handling assessment, Revision and appellate proceedings.
  • Corporate tax management and consultancy.
  • Transfer Pricing studies & its findings.
  • Preparation and filing of tax returns in India and various other procedural compliance such as preparing and filing applications for a Permanent Account Number,
    Tax Deduction Account Number, certificate for non-deduction of taxes at source.
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1.2 Wealth Tax

Wealth tax is a direct tax, which is charged on the net wealth of the assessee exceeding Rs. 30 lakhs. It is taxed on assets as defined under sec 2(ea) of the
Wealth Tax Act, 1957 owned by an assessee as on 31st March of the preceding financial year. The following are few of the assets subject to wealth tax:

  • Guesthouse, farm-house, commercial complex and residential complex.
  • Jewelry and items made up of precious metals like gold, silver, platinum or any other precious metal.
  • Aircrafts, yachts, boats that is used for non-commercial purpose.
  • Motor car owned by an individual.
  • Wealth tax, in India, is levied @ one percent under Wealth-tax Act, 1957.

We provide the following services:

  • Advisory Services with regards to wealth tax matters.
  • Filing of W.T Return in Form BA.
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1.3 Tax Deducted at Source

In respect of TDS, we would like to inform you that as per amendments to Income Tax Act, 1961, any expenses incurred without deduction of tax would be
disallowed thereby resulting to higher tax outgo.

With respect to the above scenario we shall offer the following services

  • Information regarding the heads of expenses and amount from which tax needs to be deducted.
  • Information regarding the rate and the limit above which tax is to be deducted.
  • Confirm timely payment of tax to the government.
  • Compilation & filing of quarterly E-TDS Returns.
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