Krishi Kalyan cess making eating out dearer, one-time black money compliance window opening for four months, Google tax and no deduction of tax for PF withdrawals, here's what kicks in on June 1, 2016
Making eating out dearer with Krishi Kalyan Cess to the four-month disclosure window for domestic black money holders, here's a list of things that in on June 1:
Krishi Kalyan Cess
Eating out, mobile phone usage and air and rail travel will become expensive with the new Krishi Kalyan Cess (KKC) of 0.5 % on taxable services coming into force from June. With the imposition of Krishi Kalyan Cess, the total incidence of Service Tax will go up to 15 %.
KCC to be levied on all taxable services is aimed at financing and promoting initiatives to improve agriculture. The Central Board of Excise and Customs (CBEC) has notified that the Cess will come into force on June 1. The service tax is levied on all services, expect a small negative list.
Know more about Krishi Kalyan Cess here.
Tax on Luxury Cars
If you are in the market for buying a car with a price tag of Rs 10 lakh or more, you should make the purchase before the day is over. This is because from June 1 (Wednesday), the luxury tax on luxury vehicles announced in Finance Minister Arun Jaitley's speech will be applicable.
From June 1, a 1% luxury tax will be applicable on the purchase of vehicles priced at Rs 10 lakh or more. Read more here.
Google Tax
The 'Google Tax' or 'Facebook Tax' which was first announced in the FY17 budget statement by Finance Minister Arun Jaitley will be levied from June 1.
The Google Tax was announced to introduce a tax on the income as accrued to a foreign e-commerce company outside of India. Google Tax or 'equalisation levy' as it's called in India, is expected to impact the bottom lines of giants like Google, Facebook, and others.
According to the Budget announcement, any person or entity that makes a payment exceeding Rs 1 lakh in a financial year to a non-resident technology company will now need to withhold 6% tax on the gross amount being paid as an equalisation levy. The said rule is applicable when the payment is made to companies that don't have a permanent establishment in India. This tax, however, is only applicable when the payment has been made to avail certain B2B services from these technology companies.
Know more about Google Tax here.
One-time black money compliance window
The four-month disclosure window giving an opportunity to domestic black money holders to come clean by paying tax and penalty of 45% on such assets will open on June 1. However, people who have made money through corrupt means will not be allowed to take advantage of the disclosure window.
Under the Income Declaration Scheme, persons making disclosure of unaccounted assets will be given time up to November 30 to pay taxes, penalty and surcharge totalling 45% at the fair market value.
Know more about the black money compliance window here.
No deduction of tax for PF withdrawals
No tax would be deducted at source for PF withdrawals of up to Rs 50,000 from June 1.
The government has notified raising the threshold limit of PF withdrawal for deduction of tax (TDS) from existing Rs 30,000 to Rs 50,000.
"The Finance Act, 2016 has amended section 192A of Income Tax Act, 1961 to raise the threshold limit of PF withdrawal from Rs 30,000 to Rs 50,000 for Tax Deducted at Source (TDS)," the notification stated.
The provision will come into effect on June 1, 2016, providing relief to subscribers of retirement fund body EPFO.
Know more about the PF withdrawal notification here.
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