Entries Categorized as 'IncomeTax'
June 8, 2013
So while we rejoice about inflation having come down and all that, the income tax department quietly issues a notification that the inflation it allows you to “index” your investments by gives us a 10.21% inflation for the last year. The Cost Inflation Index (CII) is used for long term capital gains calculations, and a number is released every year, which indicates inflation for the last year.
(Read: How to calculate long term capital gains tax)
I plotted the average change in the Wholesale Price Index (WPI) per year and change in the Cost Inflation Index (CII) since 1983. The notified CII for 2013-14 is actually the inflation for 2012-13, so I had to offset it one year back.
The CII change has diverged from the WPI change – where the WPI tells us inflation has come down, CII tells us costs have gone up!
The last time this happened was in 2009-10, when the CII showed a 12.5% increase in costs while the WPI average moved only 3.81%!
The Income tax department is part of the ministry of finance, which at one end has the Finance Minister Mr. Chidambaram talking about inflation coming down, while the tax department …
February 28, 2013
Budget 2013 has plugged a loophole in the tax system. Consider a small company that wanted to pay its management a bonus based on a large profit it had received.The company can deduct the amount paid, as an expense (so it’s taxes are lower). The individual would have that much money as an income, on [...]
February 28, 2013
It has been an extremely boring budget (except for those in the stock markets who saw the market up 0.5% at the beginning and end up 2% down towards the close). Let me first tell you what you want to hear. Taxes Slashed Across The Board. That’s what you want to hear. But no. Some [...]
February 28, 2013
From 1 June 2013, any dividends paid out by debt mutual funds to individuals will have to deduct Dividend Distribution Tax (DDT) of 25%, regardless of the type of scheme. Equity mutual funds (>65% in equity shares) will not pay such a DDT, as earlier. As of now, non equity mutual funds have to pay [...]
January 14, 2013
The Nifty crossed 6,000 yet again, on the back of news that the finance ministry isn’t really keen on the General Anti-Avoidance Rules (GAAR) and has deferred them to 2016 instead of 2014. I’m not sure how a ministry can issue a statement like this when there are elections in May 2014, and if a [...]
April 30, 2012
According to the Parliamentary Committee Report on the Direct Tax Code (DTC) headed by Yashwant Sinha, the total number of individual taxpayers (2010-11) that earned more than Rs. 20 lakhs (Rs. 2 million, or $40,000) a year were just 406,000. That is our 1%, as the total taxpayer base is around 3.25 cr. (32.5 million). [...]
January 25, 2011
When you sell an asset like a stock or mutual fund after a year – in some cases, like Gold, three years – you need to pay long term capital gains tax. Equity mutual funds where more than 65% of the holding is equity don’t have long term cap gains tax c…
August 30, 2010
The Government introduced the Direct Tax Code Bill today. After some serious amount of searching, I found the bill online, after struggling with pages timing out, debugging communication messages and guessing IP addresses. (Read: It was darn easy in th…
August 26, 2010
The Union Cabinet has cleared the Direct Tax Code bill, which means nothing other than it will actually be cleared by December if it’s tabled on Monday, and that means sometime in the next decade it might actually happen. The DTC simplifies tax sla…
July 27, 2010
When filling income tax forms, there’s an entry for the Designation of the Assessing Officer and Ward/Circle. This might be irrelevant for you, but if you do need to fill it up here’s how you can get the information. Go to https://incometaxindiaef…