Tax rates under GST: The gains and losses for the Indian middle class

It's only less than a month left until Goods and Service Tax (GST) sees the light of the day. India's biggest tax overhaul crossed its final hurdle last week when GST Council agreed to tax gold and silver jewellery at 3 per cent tax rate.

Tax consultant in India

With GST to be implemented from July 1, it's the ideal time to check if your monthly budget will be affected under the new tax regime. We've put down a list of goods and services that will become cheaper or costlier once GST comes into force.
Gold: GST Council has fixed the tax rate of the precious metal at 3 per cent. GST Council on June 3 created a new tax bracket for gold, diamonds and silver. The current excise duty on gold was 1 per cent and 1 per cent VAT in many states. With 3 per cent GST, Gold is set to become costlier July onward.
Insurance: Premiums are set to rise on car, health and and term insurance with the government. Currently, insurance is taxed at 15 per cent. Under GST, this would go up to 18 per cent.
Banking Charges: Transaction fee on various banking and financial services are expected to go up as GST will tax these services under 18 per cent tax rate from the current 15 per cent.
Hotel Bookings: GST on hotel services will depending on the kind of room you stay in. If the room tariff is less than Rs 1,000, your stay will be tax free. However, if the room tariff is between Rs 1,000 - Rs 2,500, you'll be taxed 12 per cent. It the tariff is between Rs 2,500 to Rs 5,000, the stay will be taxed at 18 per cent. For luxury hotels, where the tariffs are more than Rs 5,000, GST rate of 28 per cent will be applicable.
Eating Out: There are different tax slabs for restaurants depending on their turnover and whether they have air-conditioning or or not.
Restaurants with a turnover of less than Rs 50 lakh will be levied a tax rate of 5 per cent.
Non-AC restaurants will be charged 12 per cent GST on food bill. Tax rate for AC restaurants and those with liquor licence will be 18 per cent, whereas restaurants in 5-star hotels will attract a GST rate of 28 per cent.
While ordering food from your neighborhood non-AC joint may get a little costly under GST, eating out in AC restaurants is set to become cheaper as the current tax rate includes 5.6 per cent Service tax and 14 per cent VAT in some states.
Telecom Bills: Your mobile and internet bills are expected to rise once GST comes into force. Currently, there is a 15 per cent service tax on telecoms services. Under GST, the tax rate applicable will be 18 per cent. The industry, which is already stressed with the launch of Reliance Jio, is expected to pass on these charges to customers.
Movie Tickets: During a GST Council meet in Srinagar, Finance Minister Arun Jaitley had said movie tickets in cinema halls will be taxed at 28 per cent.
Currently, there is service tax on cinema and states have separate entertainment taxes. Maharashtra levies more around 50 per cent entertainment tax on movie tickets. In Uttar Pradesh (UP) entertainment tax is around 30-40 percent.
More at: http://bit.ly/2rFDxvx

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5 bank charges that most have no clue about

Tax Advisor in India

Banks charge clients for a plethora of services to recover their costs. And it is not a recent phenomenon. There are charges for PIN generation, demand draft, duplicate bank statement, and even account balance updates that you get via SMS on your phone.

Here are some common bank charges that we all should know about.

1) Cash Transactions
You cannot do unlimited cash transactions from your bank account. There is a cost to it and banks charge you for that. For example, SBI Bank allows just three free cash transactions per month and thereafter charges Rs 50 per transaction. The charges were introduced last year by the bank.

Similarly, India's biggest private sector bank, ICICI Bank, reintroduced cash transaction charges post demonetization at branches from January 1, 2017.

There are no charges for first four transactions in a month at branches in the same city. Thereafter, Rs 5 per Rs 1,000 is charged.

2) Non-maintenance charges
Non-maintenance charges have always been a point of dispute between a customer and a bank. It is always advisable to ask your banker at the time of opening an account about the minimum balance required.

For example, HDFC Bank charges Rs 600 if the minimum balance (Rs10,000) falls below Rs 2,500. If the balance is between Rs 7,500 and Rs 10,000, the penalty is Rs 150. 

SBI recently brought back the penalty for failure to maintain the monthly average balance (MAB) in metro, urban and rural centres. In a metro city, failure to keep the Rs 5,000 balance will attract a Rs 50 charge if the shortfall is 50 per cent, Rs 75 if the shortfall is 50-75 per cent and Rs 100 if the shortfall is 75 per cent or more. 

Different types of accounts have different minimum balances. So, while opening any account, ask the bank about the minimum balance for your account and the penalty for not maintaining it.

Banks calculate the MAB by adding daily closing account balance and dividing by the number of days in the period. Considering the method involved you might meet the minimum balance limit just by keeping your salary for a few days in your bank account.

3) Home branch and non home-branch transactions
Though the banking industry has adopted core banking, several banks still distinguish between home and non home-branch transactions. Large transactions are generally not encouraged at non-home branches  and therefore charges are levied on them.

For instance, HDFC Bank has capped the amount that can be transacted in the home branch at Rs 2 lakh. Above Rs 2 lakh, it charges Rs 5 per Rs 1,000.

At non-home branches, there is a cap of Rs 25,000; above this, customers are charged Rs 5 per Rs 1,000, subject to a minimum charge of Rs 150.

It is always good to shift your bank account to the place you reside so that there is less cost to the transaction

4) ATM transactions
You cannot make unlimited cash transactions from your ATM. There is a limit to it. According to RBI rules from your own ATM you can make at least first five transactions in a month free. From other ATMs you can make three free transactions per month in six metro cities and five in other cities.

Banks charge Rs 20 per financial transaction and Rs 9.55, including tax, for every non-financial one beyond this limit.

5) International Transactions
If you make payments abroad through debit or credit card, a charge of 3-4 per cent is added to the exchange rate. So, before swiping the cost abroad, add 3-4 per cent extra cost on the transaction amount.

Next time when you do any banking transaction do keep the above-mentioned charges in mind.

Original Source: http://bit.ly/2ojeg8W

The Lazy Investor’s Quick Guide To Last Minute Tax Savings

Tax Consultant firms in India

The financial year is fast coming to an end. If you’re reading this article then you probably haven’t taken your investment and tax planning as seriously as you should have. Worry not though. There’s just enough time left for you to sneak in a tax-saving investment. Just make sure you don’t put it off for much longer.

Here are some options for you to save tax under , where you can invest and save up to Rs. 1.5 lakh in taxes.

What To Buy	How much	Where	Benefits	You need	Processing time
Rs. 100 upwards	Through authorised banks, post offices	Safe investment, 8% ETE returns, 5-year lock-in	Investor’s name, cash or DD.	1 working day	Recommended for long-term investmentf
Rs. 500 to Rs. 1.5 lakh	Through authorised banks, post offices	Safe investment, 8% EEE returns, loan on investment facility, 15-year maturity	ID & address proof, 2 colour photographs, account opening form (for offline application)	1 working day	Best saving scheme for the general investor, great tool for long-term wealth building.
Rs. 500 upwards	AMCs, distributors, agents	Market-linked and tax-free returns, 3-year lock-in	KYC documents, cheque,	1 working day	Great for long-term wealth creation; can be bought easily online.
Depends on coverage, age	Insurers, agents, online aggregators	Life cover with investment benefit	KYC documents, cheque, photograph. For some term plans, income proof and health check	1 day to 1-2 weeks	Go online to compare and buy a cover as per your needs. Pick a term plan if you have dependents.
Rs. 200 upwards	Insurers, agents, online aggregators	Safe investment, 6.6%-7.5% returns	KYC documents, PAN card, cash or cheque,	1 working day	Low returns currently along with poor tax efficiency. Use minimally, buy online.

Original Source: http://bit.ly/2nftOZi

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