TDS will apply on interest income exceeding Rs 10k, cabs, metro not in tax list
GN Staff | June 1, 2015
Savings will be taxed so will be spending. From Monday most of the services one buys will attract enhanced service tax of 14% and TDS (tax deducted at source) is going to charged on all kinds of FDs and RDs (fixed deposits and recurring deposits). TDS will apply on interest income exceeding Rs. 10,000.
Service tax is applicable on almost all services. Some of the services that are going to be expensive due to tax are: railway and airline tickets, banking, insurance, advertising, construction, credit cards, event management and tour operators.
The Centre aims to collect around ₹2.10 lakh crore through service tax, about 32 per cent of the total indirect tax target, which is 24.7 per cent higher than the revised estimate of 2014-15. Keeping this in mind, the tax authorities have decided to collect the hiked service tax from June 1, instead of July 1 in previous years.
According to railway ministry officials, fares for First Class and AC classes in passenger trains, besides freight charges, will go up by 0.5% from June 1.
Finance minister Arun Jaitley in his budget had proposed to raise service tax from 12.36% (including education cess) to 14%. The proposal takes effect from June 1.
Hike in service tax is to facilitate a smooth transition to the goods and services tax (GST) regime, which the government wants to roll out from April 2016. The GST will subsume service tax, excise and other local levies. Education cess, which is levied on service tax, will be subsumed in the service tax rate with effect from June 1.
The budget had also proposed a 2% Swachh Bharat cess on selected services but the government is yet to notify the cess.
Life and general insurance premiums could go up as a result of the additional service tax. Life insurance premiums currently attract service tax at 3 per cent in the first year and 1.5 per cent of the premium charged in the subsequent years. For all traditional life insurance plans, service tax rate will increase from 3 per cent to 3.5 per cent for first year premiums and from 1.5 per cent to 1.75 per cent for subsequent years' premiums.
Similarly, for all other insurance products such as general insurance and unit linked insurance plans the applicable service tax will go up from 12.36 per cent to 14 per cent.
Services that will not be taxed
Education remains a priority sector for the government. So, pre-school education and education up to higher secondary school or equivalent remains out of the service tax net. Likewise, certain common transportation modes such as metered cabs, auto rickshaws, metro and monorail are kept out of the service tax net.
Sometime in 1999, I took Arun Jaitley out for meal for the column, “Lunch with Business Standard”. As is his wont, he chose his own place for lunch. It was at the Chambers at the Taj Mansingh hotel, an exclusive domain of the high and the mighty Delhi. As we sat down for the meal
The arrest of Palaniappan Chidambaram, former union minister of home & finance, by the CBI, albeit after his much dramatic disappearance and reappearance, has brought an end to his long run from the arms of law. As a finance minister, being at the other end of the law, the former ministe
An unintended consequence of the inversion of Article 370 and the division of the state of Jammu and Kashmir into two union territories is the curious revival of Pakistan’s interest in Indian history and sociology. For the first time in decades, a Pakistan prime minister made the Rasht
Neeraj Kabi, a critically acclaimed self-taught actor, theatre director, and acting teacher, has worked in Odiya, Hindi and international cinema, theatre, television and web series. In 2014 he was honoured with the best actor award at the 4th Sakhalin International Film Festival for his role in the fil
Prime minister Narendra Modi has told US president Donald Trump that Pakistan prime minister Imran Khan’s “incitement to anti-India violence” was not good for peace in south Asia. Modi and Trump had a telephonic conversation – their first since the Aug 5 move to chang
As children are consuming more and more fast foods and sweetened beverages are becoming, leading to obesity and related non-communicable diseases (NCDs), the Indian Academy of Pediatrics (IAP) has come out with guidelines on such substances. The dietary guidelines under its nutrition chapter