GST Registration

The Goods and Services Tax (GST) was introduced as a replacement for all the erstwhile state and central indirect taxes. Thus, GST registration is compulsory for all the entities who engage in the supply of goods and services across the nation.

Tax Deducted at Source or TDS is referred to a type of tax where an individual is liable to deduct tax for services rendered. The tax deducted from the total payment amount goes to the government for various types of activities such as infrastructure development, defence, development, etc. Depending on the type of service, a certain type of tax (TDS) is levied that the payee is expected to deduct. If the individual has deducted more than the required tax amount, he/she will be eligible for a TDS Refund. The individual will require filing their TDS Return in order to receive the refund amount. TDS can be collected on a regular, periodic, or occasional basis, it is applicable to salary, interest, commission, fee, etc.

TDS Rate on Salary :

Any employer has the authority to deduct tax at source while making the actual payment to the employee. The employers deduct tax from salaries only at the time of payment. TDS is deducted if the total income of the employee is taxable. TDS will not be deducted if your total income is Rs. 2, 50,000. This amount is applicable for men and women below the age of 60 years. Normally, the TDS deduction rate on salary ranges from 5% to 30%.

The following chart contains the TDS amount applicable to each type of payment :

TDS Rate Chart for Persons who are Not Resident in India (NRI) for FY 2017-2018

Particulars TDS Rates (in %)
Section 192: Payment of salary According to Income Slab as specified above
Section 194B: Income earned through winnings from lotteries, card games, crossword puzzles, and/or any other game of any type 30
Section 194BB: Income earned through winnings from horse races 30
Section 194E: Payment made towards a non-resident sportsman and/or sports association 20
Section 194EE: Payment made towards any deposit under National Savings Scheme (NSS) 10 (w.e.f. 1 June 2016) [20% till 31 May 2016]
Section 194F: Payment made towards the repurchase of unit(s) by Mutual Fund or Unit Trust of India 20
Section 194G: Income from commission and other proceedings earned on the sale of lottery tickets 5 (w.e.f. 1 June 2016) [10% till 31 May 2016]
Section 194LB: Payment made towards interest on infrastructure debt fund 5 (w.e.f. 1 June 2016) [10% till 31 May 2016]
Section 194LBA: Some particular income which is given out by a business trust among its unitholders 5
Section 194LC: Payment made towards interest by an Indian Company or business organisation in relation to foreign currency borrowed under an agreement of loan or via the issuance of long-term bonds 5
Section 194LD:
  • Payment made towards the interest on a rupee-denominated bond which is issued by an Indian Company
  • Payment made towards the interest on a Government security which is issued to a Foreign Institutional Investor or a Qualified Foreign Investor
5
Section 195: Payment of any other sum to a Non-resident:

a) Income arising out of investments made by a Non-resident Indian (NRI) citizen

20
Section 195: Payment of any other sum to a Non-resident:

b) Income arising out of short-term capital gains as per the recommendations of Section 111A

15
Section 195: Payment of any other sum to a Non-resident:

c) Income arising in relation to long-term capital gains as per the reference of Section 115E in case of Non-resident Indian (NRI) citizen

10
Section 195: Payment of any other sum to a Non-resident:

d) Income earned in terms of fees which is payable by the Government or an Indian organisation for technical services, subject to certain conditions

10
Section 195: Payment of any other sum to a Non-resident:

e) Income arising out of long-term capital gains as per the recommendations of sub-clause (iii) of clause (c) of sub-section (1) of Section 193

10
Section 195: Payment of any other sum to a Non-resident:

f) Income arising out of royalty which is payable by the Government or an Indian organisation

10
Section 195: Payment of any other sum to a Non-resident:

g) Any other income arising out of long-term capital gains except for long-term capital gains as per the recommendation of clauses (33), (36), and (38) of Section 10

20
Section 195: Payment of any other sum to a Non-resident:

h) Income arising out of royalty which is payable by the Government or an Indian organisation [not of the nature which is referred to in the sub-item (b)(i)(F)]

10
Section 195: Payment of any other sum to a Non-resident:

i) Income arising out of interest which is payable by the Government or an Indian organisation on debt incurred or money borrowed by them

20
Section 195: Payment of any other sum to a Non-resident:

j) Income arising from any other source

30
Section 196B: Income arising from units to an offshore fund 10
Section 196C: Income arising out of GDR or foreign currency bonds of an Indian company 10
Section 196D: Income of foreign institutional investors from securities 20

TDS Rate Chart for Domestic Company for FY 2017-2018

Particulars TDS Rates (in %)
Section 193: Interest on securities:

a) any securities or debentures for money offered by or on behalf of any corporation which is set up by a Central, State or Provincial Act, or issued by a local authority:

b) any debentures which are issued by a company wherein the debentures are listed on a recognized stock exchange adhering to the norms of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and any rules made thereunder:

c) any security of the State or Central Government:

d) Interest on any other security:

10
Section 194: Dividend 10
Section 194A: Income through interest other than "Interest on securities" 10
Section 194B: Income earned through winnings from lotteries, card games, crossword puzzles, and/or any other game of any type 30
Section 194BB: Income earned through winnings from horse races 30
Section 194C: Payment to contractor/sub-contractor:

a) HUF/Individuals

1
Section 194C: Payment to contractor/sub-contractor:

b) Others

2
Section 194D: Insurance commission 10
Section 194DA: Payment made towards life insurance policy 1 (w.e.f. 1 June 2016) [2% till 31 May 2016]
Section 194EE: Payment made towards any deposit under National Savings Scheme (NSS) 10 (w.e.f. 1 June 2016) [20% till 31 May 2016]
Section 194F: Payment made towards the repurchase of unit(s) by Mutual Fund or Unit Trust of India 20
Section 194G: Income from commission and other proceedings earned on the sale of lottery tickets 10 (w.e.f. 1 June 2016) [10% till 31 May 2016]
Section 194H: Brokerage or commission 5 (w.e.f. 1 June 2016) [10% till 31 May 2016]
Section 194-I: Rent paid for:

a) Plant & Machinery

2
Section 194-I: Rent paid for:

b) Building or land or fitting or furniture

10
Section 194LA: Payment of compensation on acquisition of some particular immovable property 10
Section 194LBA: A particular amount of income which is distributed by the business trust among its unitholders 10
Any Other Income 10

TDS Rate Chart for a company other than Domestic Company for FY 2017-2018

Particulars TDS Rates (in %)
Section 194B: Income earned through winnings from lotteries, card games, crossword puzzles, and/or any other game of any type 30
Section 194BB: Income earned through winnings from horse races 30
Section 194E: Payment made towards a non-resident sportsman and/or sports association 20
Section 194G: Income from commission and other proceedings earned on the sale of lottery tickets 5
Section 194LB: Payment of compensation on acquisition of some particular immovable property 5
Section 194LBA: Some particular income which is distributed by a business trust among its unitholders 5
Section 194LC: Payment made towards interest by an Indian Company or business organisation in relation to foreign currency borrowed under an agreement of loan or via the issuance of long-term bonds 5
Section 194LD: Payment made towards interest by an Indian Company or business organisation in relation to foreign currency borrowed under an agreement of loan or via the issuance of long-term bonds 5
Section 195: Payment of any other amount to a Non-resident:

a) Income arising out of investments made by a Non-resident Indian (NRI) citizen

20
Section 195: Payment of any other amount to a Non-resident:

b) Income arising out of short-term capital gains as per the recommendations of Section 111A

15
Section 195: Payment of any other amount to a Non-resident:

c) Income arising in relation to long-term capital gains as per the reference of Section 115E in case of Non-resident Indian (NRI) citizen

10
Section 195: Payment of any other amount to a Non-resident:

d) Income earned in terms of fees which is payable by the Government or an Indian organisation for technical services, subject to certain conditions

10
Section 195: Payment of any other amount to a Non-resident:

e) Income arising out of long-term capital gains as per the recommendations of sub-clause (iii) of clause (c) of sub-section (1) of Section 193

10
Section 195: Payment of any other amount to a Non-resident:

f) Income arising out of royalty which is payable by the Government or an Indian organisation

10
Section 195: Payment of any other amount to a Non-resident:

g) Any other type of income arising out of long-term capital gains except for long-term capital gains as per the recommendation of clauses (33), (36), and (38) of Section 10.

20
Section 195: Payment of any other amount to a Non-resident:

h) Income arising out of royalty which is payable by the Government or an Indian organisation [not of the nature which is referred to in the sub-item (b)(i)(F)]

10
Section 195: Payment of any other amount to a Non-resident:

i) Income arising out of interest which is payable by the Government or an Indian organisation on debt incurred or money borrowed by them

20
Section 195: Payment of any other amount to a Non-resident:

j) Income arising from any other source

30
Section 196B: Income arising from units to an offshore fund 10
Section 196C: Income arising out of GDR or foreign currency bonds of an Indian company 10
Section 196D: Income of foreign institutional investors from securities 20

The TDS on income/salary is calculated on an annual basis. The TDS calculation is based on various types of slabs as indicated in the Budget 2017 – 2018. The following table provides the details of income slab with their applicable tax amount in percentage -

Income Tax Slabs in India for FY 2017 - 2018

Tax applicable for individuals below 60 years
Annual Income Tax Rates Education Cess Secondary and Higher Education Cess
Up to Rs.2,50,000 Nil Nil Nil
Rs.2,50,001-Rs.5,00,000 5% 2% of income tax 1% of income tax
Rs.5,00,001-Rs.10,00,000 Rs.12,500 + 20% 2% of income tax 1% of income tax
Above Rs.10,00,000 Rs.1,12,500 + 30% 2% of income tax 1% of income tax
Tax applicable for individuals over 60 years and under 80 years
Annual Income Tax Rates Education Cess Secondary and Higher Education Cess
Up to Rs.3,00,000 Nil Nil Nil
Rs.3,00,001-Rs.5,00,000 5% 2% of income tax 1% of income tax
Rs.5,00,001-Rs.10,00,000 Rs.10,00 + 20% 2% of income tax 1% of income tax
Above Rs.10,00,000 Rs.1,10,000 + 30% 2% of income tax 1% of income tax
Tax applicable for individuals over 80 years and above
Annual Income Tax Rates Education Cess Secondary and Higher Education Cess
Up to Rs.5,00,000 Nil Nil Nil
Rs.5,00,001-Rs.10,00,000 20% 2% of income tax 1% of income tax
Above Rs.10,00,000 Rs.1,12,500 Rs.1,00,000 + 30% 2% of income tax 1% of income tax

Frequently Asked Questions

  1. What is a TDS Certificate? A TDS certificate is a document that is issued by a deductor to a deductee. The two kinds of TDS certificates are Form 16 and Form 16A.
  2. What is Form 16? Form 16 is issued by employers to employees. It contains details regarding the tax deducted over the course of the year.
  3. What is Form 16A? Form 16A certifies the amount deducted at source, the kind of payments and the payments that have been deposited with the IT Department. It is issued for payments apart from salary, such as rent, professional charges, bank interest payments, etc.
  4. What are the TDS rates applicable to interest on securities? The TDS rate for interest on securities is 10%.
  5. What is the minimum exemption limit for individuals under 60 years of age? Individuals who are below 60 years of age and earn under Rs.2.5 lakh will be exempt from tax.

News About GST Registration

  • Overseas E-Commerce Companies Could be Forced to Start GST Registration in Every State

    Overseas e-commerce companies such as Apple, Google, and Amazon that operate in the e-commerce space in India may soon have to commence registering under GST with each state in the country. The Economic Times recently reported that the deadline for these companies to register is October 1. There was hope in the industry that the government will allow a special one-time registration rather than registrations in multiple states, but the government is offering no respite. As a result, compliance costs for these companies are bound to shoot up. From the 1st of October, these e-commerce players will have to collect tax from sellers on their online platforms or websites. Central and State GST of 1% each shall be levied on intrastate supplies exceeding Rs.2.5 lakh. So far as interstate supplies more than Rs.2.5 lakh are concerned, TDS of 2% will integrated into GST.

    26 September 2018

  • GST, GAAR Reporting in Tax Audit Report Pushed Till March Next Year

    The proposed General Anti Avoidance Reporting (GAAR) and Goods and Services Tax (GST) reporting has been pushed till the 31st of March, 2019, by the Central Board of Direct Taxes. The board recently issued a circular stating the same. According to the board, tax auditors no longer have a requirement to submit details requested for under Clause 44 and Clause 30C of tax audit report relating to the Goods and Services Tax and General Anti Avoidance Reporting. According to the circular sent by the Central Board of Direct Taxes, there was examination of the matter and the board came to the conclusion that reporting under the proposed Clause 44 and proposed Clause 30C of the Tax Audit Report will be deferred until the 31st of March, 2019.

    11 September 2018

  • Problems Faced by American Companies Regarding GST and Railway Clearances To Be Resolved

    Piyush Goyal, the Railway Minister, has said that the problems raised by some American companies about the Goods and Services Tax, third-party certification, and fast-tracking at the research and development wing of the railways will soon be resolved by the Railway Board. Goyal stated the aforementioned words over the course of his August 13 round-table talks with a prominent delegation of major American companies that operate in the area of Information Technology, and railway construction and maintenance. Ashwani Lohani, the Chairman of the Railway Board, was among the other senior officials present at the round-table.

    There were 13 US companies that made presentations which covered a wide variety of goods and services, like anti-corrosion coating, the use of cloud computing or high-speed internet for railway passenger reservation and passenger experience, energy efficiency, fire protection, modern ways to construct bridges, composite sleepers for bridges, etc.

    31 August 2018

  • Price Rises and Declines Over The Past Year After Implementation of GST

    The implementation of the Goods and Services Tax took place on the 1st of July 2017, and it subsumed more than a dozen indirect taxes. Since the implementation of the new regime, tax rates of more than 190 items within the 28% GST slab were reduced, and there are only 35 items left in that category now. A comparison of commodities’ prices carried out by Care Ratings showed that the changes in prices were not fully influenced by GST changes, attributing them to other factors too, like global prices, taxes, demand conditions and trade.

    20 August 2018

  • Center May Allow Employees to Travel Overseas Through the LTC

    While the centre seems unlikely to agree to the demands of its employees seeking an increase in the minimum pay beyond the 7th pay commission report, there are rumors that the government might permit employees to go on international junkets.

    Employees may be permitted to travel to a few Central Asian countries as part of their Leave Travel Concession (LTC). The idea behind this decision is to increase the country’s footprint in countries of importance in that region. The proposal has been finalised by the Personnel Ministry and consultations with Tourism, Civil Aviation, and Home departments have already been completed.

    20 August 2018

  • 145% return in one year for V-Mart Retail

    Presently, a number of small cap businesses are staggering in terms of their growth and performance. However, V-Mart Retail has stood out in this case with a massive growth of 108% since January till the first week of July this year. Quite a number of industries are appealing a rapid change and fixing of the loopholes in the Goods and Services Tax (GST) regime.

    Anand Agarwal, the CFO of V-Mart Retail said that the company generates 85% of its revenues from products that are priced below the range of Rs.1,000. These products come under the 5% tax slab of the Goods and Services Tax (GST). Agarwal said, “We have always been a value for money retailer and with a low tax rate of 5 per cent, the customers at the middle and bottom of the pyramid have continued to see value in the products being sold by us.” He also added that the implementation of the new indirect tax regime has proven to be very useful for the industry and has been very helpful for the retailers.

    Addressing the press, the CFO said that the company has witnessed a lot of benefits from the Goods and Services Tax (GST). These benefits have come in terms of both simplicity of implementation as well as logistics. He further said that this move has helped push the consumers towards the organised retail.

    16 August 2018

  • Rationalisation of GST rate possible, says the Finance Minister

    The Minister of Finance Piyush Goyal recently said that the Goods and Services Tax (GST) Council are looking for possibilities to rationalise the rates of tax on a number of items. However, he added that it will be effective only after ensuring the balance with revenue mop-up. Goyal also said that the council will be discussing the ease of filing returns along with the ease of assessment in their next meeting. He said that the GST Council has already reduced the rates on 328 items which might lead to the further possibility of a reduction in rates on certain items. However, they have to be in balance with the revenue considerations.

    On being asked if the GST Council will consider lowering the rates in the next council meeting, the Minister of Finance said that the council had been very responsive to the demands of the industry from the inception of the Goods and Services Tax (GST). Wherever there were cases of inverted duty or any other issue that required attention, the council had reduced the rates accordingly to ensure the ease of doing business. At present, there are 4 slabs under the Goods and Services Tax (GST) regime: 5%, 12%, 18%, and 28%.

    Since the rollout of GST on 1 July last year, the new indirect tax system has subsumed over a dozen local levies and helped to transform the nation into a single market with the seamless flow of goods.

    8 August 2018

  • Single GST rate slab is a ridiculous suggestion: Finance Minister

    The Union Finance Minister Piyush Goyal recently said that the proposal put forward by some of the political parties for a single GST rate slab was a “ridiculous suggestion”. Some of the political parties have been constantly placing the proposal for the four-slab Goods and Services Tax (GST) rate structure to be abolished. They have proposed the introduction of a single slab tax structure instead and Congress has also promised that the rates will be reduced to just one slab if they are voted to power in the 2019 general elections. In this context, the Union Finance Minister said that implementing one rate of tax slab will not be a prudent move. He indicated that the main burden, in this case, will fall over the people belonging to the middle class as well as the poor as items of daily use such as salt, sugar, and clothes will be coming under the 18% GST slab.

    Goyal said that the past Congress-led UPA government has proposed an 18% single GST slab looking at the tax collections and concessions given to the poor. He added that the rate proposed earlier would not have been accepted and the GST structure would not have worked. After the rollout of the Goods and Services Tax (GST) last year, the rates have been reduced for 328 items out of the 1,200 items that have been included under the ambit of the newly implemented indirect tax.

    26 July 2018

  • GST Council to discuss annual return form on 21 July

    The Goods and Services Tax (GST) Council is likely to approve the format for annual returns and audit in its meeting which is to be held on 21 July 2018. As the government plans to check tax evasion, the industry is expecting some reconciliation with annual income tax returns. 2017-18 is the first year when businesses will be required to file their annual returns (GSTR-9) under the GST regime. This has to be done by the end of the year, i.e. 31 December 2018. Businesses with a turnover of more than Rs.2 crore will be required to file audit reports in addition to the annual returns.

    A draft has been prepared by the revenue officers for the Goods and Services Tax (GST) annual return form. This form will be taken up for discussion at the GST Council meeting on 21 July 2018. Once the form is taken up, the IT backbone of the Goods and Services Tax (GST), GST Network (GSTN) will finalise the software which will enable the firms to file their annual returns. Tax experts are expecting that the GST annual return form will be in line with the prior indirect tax regime, Value Added Tax (VAT) regime. They are expecting the presence of certain columns on the form for reconciliation with ITR and audit report. The expected date of the availability of the forms according to the experts is by the end of October this year, so that the annual returns are filed by the end of the year, i.e. 31 December 2018.

    20 July 2018

  • Top IT companies have over $2 billion in tax disputes

    Leading IT companies like Tata Consultancy Services (TCS), Infosys, Cognizant, and Wipro have more than $2 billion in tax disputes pending in India. The main reason behind the disputes is the differences in the calculation of incentives for export-oriented units and distribution of dividend taxes to investors. Reportedly, Infosys and Wipro are fighting cases related to tax incentives that they have claimed under the Software Technology Parks of India (STPI) and Special Economic Zone (SEZ) schemes. On the other hand, Cognizant is in a dispute over how the dividend distribution tax over profits repatriated to its parent company is calculated.

    Tata Consultancy Services (TCS) has over Rs.5,600 crore in disputes pending with the tax authorities. In the financial year 2017, TCS reported Rs.2,690 crore in contingent liability related to tax disputes. The company disclosed in their latest annual report that the liability has almost doubled since the previous financial year. The senior vice president of IT industry body Nasscom, Sangeeta Gupta said, “Many of these disputes are because of issues with interpretation by different tax officials.” She added that a number of these cases eventually land up in courts and are dragged on for years.

    11 July 2018

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