Taxing the Rich Farmers – Current status of Farm Taxes, pros and cons

Recently, economist Bibek Debroy, a member of the NITI Aayog, recommended that the agricultural income above a certain threshold should be taxed. This brought back the question of the status of taxation on agriculture. Almost 20% of GDP of the country comes from the agricultural sector but still its share in the revenue generated in […]

Policy Measures on Transfer Pricing

Transfer pricing is one of the methods of tax avoidance. It refers to allocating expenses to high tax countries and profits to low tax countries to reduce tax liability. This is generally done within the associated companies. Transfer pricing is illegal and hurts the economy. Concept Take an example here. In 2009-10, TCS had shown […]

GST and Taxation of Intangibles

One of the major taxation problems in India is the taxation on intangible products and services. These include Intellectual property (IP) such as patents, copyrights and trade secrets and software, software services such as SAAS. This problem is global and not specific to India. In most VAT/GST countries, the characterization of intangibles is full of […]

Distribution of Tax Revenues: Constitutional Provisions

Article 268 to 281 in the constitution of India deal with the distribution of tax revenues. These articles have been amended from time to time, for example 88th amendment provided for service tax via article 268-A. Some articles have been amended as per recommendations of finance commission also. The current position is as follows: Article […]

Draft Place of Effective Management (PoEM) Rules

Residential status of the companies is an important factor in deciding their tax liabilities. The income tax act provides that a company is resident in India if it fulfils either of the following two conditions: It is an Indian company During a particular financial year, the control and management of its affairs is situated wholly […]

Swachh Bharat Cess

The thrust of new Government towards clean India has recently made the government to impose Swachh Bharat Cess of 0.5% on all services liable for service tax. The Swachh Bharat cess will be an additional levy, making the effective service tax rate 14.05% against the current 14%. In budget 2015-16, the government had put the […]

Tax Information Network

On behalf of the Income Tax Department, the National Securities Depository Limited (NSDL) established Tax Information Network (TIN). This is a source of the countrywide tax related data.  The basic idea behind establishing TIN was to modernise collection, processing, monitoring and accounting of direct taxes using information technology. TIN has three subsystems viz. ERACS, OLTAS […]

Gender Budgeting in India

A gender budget is not a separate budget for women. Instead, the gender budgets are an attempt to assess government priorities as they are reflected through the budget and examine how they impact women and men. Gender budgets look at what the impact of the spending is on men and women and whether or not […]

Merits and Demerits of Progressive Taxation

A progressive tax is imposed to raise the tax rate effectively more than the rate at which it was applied. It is characterised by a more than proportional rise in the tax burden relative to the increase in income. Thus, progressive taxes are seen as fighting inequalities in income distribution. The taxes that are often […]

Timeline of Taxation in India

1922: The Income Tax Department was established in the year 1922. The Income Tax Act, 1922 gave a particular classification to different income tax authorities. 1924: The Central Board of Revenue Act established the Board as a legislative body with operational duties for the operation of the Income-tax Act. Each province had its own appointed […]