All That You Need to Know About Bitcoins

Bitcoin is the new age digital currency introduced in the year 2009. It uses the blockchain method which hinders the role of a third party, that is, it’s self-governing and the first decentralised way of payment system. It is an open source network of chains, to be precise. Bitcoin is mystical and hence has garnered a lot of publicity worldwide. No one knows where it came from, where does it actually exists or where it is going, for that matter! There are no intermediaries or a sole person responsible. It works on a peer-to-peer network, in which the transactions take place directly between the two unknown users, without the involvement of a third party. The bitcoin currency is said to be invented by, alias, Satoshi Nakamoto.

Bitcoins, also known as virtual currency, is basically a computer programmed file. It is generally stored in a ‘digital wallet’ app on any smart-phone or computer. To engage in bitcoin earning and spending, one sends this digital cash to others across the Internet. Every single transaction is saved in a ledger called the blockchain. This global money system involves the mathematical field of cryptography to ensure bitcoin’s security.

How can one procure bitcoins?

Although bitcoins are not conferred as legal tender, they are still soaring high in the online marketing forums in exchange of services. You can obtain bitcoins by buying them from a close ally (in cash), or accepting them in return of goods and services (online). Once you have a bitcoin wallet, then you can use the traditional mode of payment that incorporates credit card transactions, bank transfer or debit card to buy bitcoins on a bitcoin exchange. This way bitcoins will be added to your digital wallet.

What is the unit of bitcoins?

The unit of account of the digital cryptocurrency bitcoin is bitcoin. Symbols used to denote bitcoins are BTC and XBT. Smaller denominations of bitcoin used as alternative units are millibitcoin (mBTC), and satoshi (sat). Satoshi, the alias name of the inventor is denoted as the smallest amount representing one hundred millionth of a bitcoin.

Is it legal to buy bitcoins?

Bitcoin being of decentralized nature, that is, no involvement of intermediary bodies like the State or the banks, no Country can pronounce it as illegal. It is an open source online wallet and hence its policies and terms are independent and cannot be altered or tampered. Having said that, the use of bitcoin can be criminalised in case of unlawful transaction, drug-dealing or fraudulent gambling is involved. The legitimate status of bitcoins varies substantially from country to country. In many countries, given the digital stature, it remains undetermined as legal or illegal. Some countries have explicitly allowed the use of bitcoins in their economy, while others have restricted or put a ban on it.

How many Bitcoins are there in the world?

There are a total of 21 million bitcoins that can be mined, as per the data base. Once all these bitcoins are tapped out, bitcoin will need to modify its protocol to meet to the sprouting needs.

Is bitcoin taxable?

Bitcoins are not physical money to be liable to be taxed. The IRS (Internal Revenue System) does not recognize bitcoins as legal tenders and hence it is exempted from being taxed.



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4 Important Investment Options in India for Tax Saving

How, when and where to invest is really a tough decision for the taxpayers? Considering the income tax strategy in India, it is really a tough decision to make. But, in case anything wrong happens in this regard then one has to repent for the same for longer time. Understanding of income tax strategy in India is necessary because this can only help in making the best investment for income tax savings. When investors look for the ‘best’ investment option, they want something that will earn them the maximum return with the least amount of risk. However, such an investment product does not really exist. This is because every investment has some risk attached to it, high or low.

One should not invest in something just to generate high returns because such products come with commensurate risk, and a higher chance of you losing the money that you have invested. Below are the investments that you can make to save your precious money.

Public Provident Fund

The Public Provident Fund (PPF) is one of the most popular investment options in India because of its sovereign guarantee. Some of its features are:

  • Investment offers tax benefit under section 80C, interest earned and maturity are also exempt from tax.
  • The scheme has a lock-in period of 15 years.
  • Post maturity, the account can be extended in block of five years for any number of times.
  • The interest rate is reviewed by the Government every quarter. Currently, for the April-June 2018 quarter, interest rate offered is 7.6 percent a year.

Bank Fixed Deposits

Bank fixed deposits (FDs) is another popular investment option which offers fixed returns. One can invest in a bank FD by visiting his/her branch or via Net-banking. Here are some of its key features:

  • FDs are available in a wide range of tenures. Banks like the State Bank of India (SBI) and HDFC Bank offer FDs with minimum tenure of 7 days and maximum of up to 10 years. One can invest in any tenure depending on his/her time horizon at the rates offered by banks.
  • Most bank FDs offer the option of premature withdrawal by paying a penalty. However, this should be checked at the time of opening the FD account.
  • A bank FD is insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC) rules only up to Rs 1 lakh (principal plus interest) is insured per person per bank.
  • Currently, SBI is offering interest rate between 6.40 percent and 6.75 percent for FD tenures of 1 year to up to 10 years. Senior citizens get an extra 0.50 percent.

Mutual Fund Debt Fixed Maturity Plans

Fixed maturity plans (FMPs) are close-ended debt funds offered by mutual funds. The maturity date of FMPs is fixed. Features of FMPs are:

  • These plans invest in various types of fixed income options such as bonds, bank certificate of deposits etc. which mature on or before the maturity date.
  • Unlike a bank FD where returns are fixed, FMP returns are not fixed or guaranteed.
  • FMPs have a tax advantage over bank FDs. Capital gains on debt FMPs, held for more than 36 months, qualify for long-term capital gains (LTCG) taxation. It is taxed at 20 percent post-indexation benefit. Also, if you have incurred long-term capital losses, you can set off the loss against the LTCG before calculating tax payable.

Debt Mutual Funds

Apart from FMPs, which are close-ended debt funds, mutual funds also offer open-ended debt funds. These open-ended funds are considered less volatile than equity thereby offering stable returns as compared to equities.

  • They also invest in various debt instruments such as corporate bonds, treasury bills, government securities etc. These schemes are professionally managed by debt fund managers.
  • There are different types of debt mutual funds such as liquid funds/money-market funds, short-term income funds, gilt funds, corporate bond funds etc. c) These funds invest in various instruments of different time horizons and carrying different levels of risk. An investor can invest in these funds depending on his/her time horizon and risk appetite.

These are the best tax saving options of investment in India. You can go with the same and save your money. Well, consulting a reputed tax service company in India will also help you in the concern.

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European Union to Implement India’s GST Model at Their Countries

GST has become the talk of the town in India and certainly this can be claimed with any doubt. But, what we are going to tell you today cab be really interesting for you to know. The European Union countries are now thinking to implement India’s GST model at their countries. And, it is definitely a matter of proud for India. As per the spokespersons of EU, GST has started changing India’s perception not just for policy makers in other countries but also for global investors. While India’s GST implementation has come under a lot of criticism from many in the domestic industry, the indirect tax reform has in fact attracted many global investors who until now were steering clear of India.

Also with GST, India may have moved the value chain and the tax system is almost on a par with countries that have good indirect tax structures, including those in China. There are lots of similarities between the Chinese system and the Indian system. But the Indian system is now extremely similar to the rest of the world’s VAT (Value Added Tax) systems. India has e implemented GST and it is starting to change the country in exactly the ways they were intended to. And actually India has got an awful lot to be proud of in how it has achieved its ambitions. The spokesperson from EU also claimed.

India moved to GST last year on July 1, where all the indirect taxes like sales tax and VAT were subsumed into a single producer tax. This did create initial problems, triggering litigations. In most cases, the government has come out with clarifications. But harnessing full benefits of the biggest tax reform since independence could be delayed if the complexities faced by the industry keep increasing. So, initially it was a tough walk for the financial department for the management of everything but now GST has emerged as the greatest benefit for everyone and the country plus the world is seeing the difference.

 There are many hopes with GST and the constant progress in the same is proving it right only. Other nations taking the reference from India’s GST is really a great achievement for the whole nation. Still many improvements are required for the same but whatever will come out from the same it will be beneficial only. Consultation from a reliable tax service company will always be a great aid for you.

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GST and Demonetization Has Brought 1.8 Million More People into Income Tax Net: India to UN

If you are still wondering that what changes has GST and demonetization has brought in the Indian economy then here is something very interesting for you to know. India has informed the UN that the Goods and Services Tax reform implemented by it, coupled with the demonetisation of high-value currency notes, and has brought 1.8 million more people into the income-tax net. As per the statement made by India at the general council, it has been stated that, India is currently implementing a wave of reforms. Apart from encouraging digital over cash transactions, India introduced the Goods and Service Tax regime which provides for uniform taxes. This has led to a 50 per cent increase in the number of indirect taxpayers.

It has also been stated that India stands firm on its stand on the fundamental principles of the World Trade, including multilateralism, rule-based consensual decision-making, an independent and credible dispute resolution and appellate process, the centrality of development, which underlies the Doha Development Agenda, and special and differential treatment for all developing countries. The global economic recovery is progressing gradually, with improved resilience and emergence of new sources of growth. However, there are concerns that a durable recovery may remain constrained by factors such as the persistence of low productivity and debt overhang problems in advanced economies as well as in some emerging market economies, rising populism and protectionism, and the slow pace of structural reforms

India has also committed to remaining mindful of new gaps in the domestic resource mobilization that may result from financial innovations, including digital finance, and the implications of fin-tech and the weightless economy on financial inclusion and access to finance. Further, stepping up its cooperation with the southern countries in the spirit of solidarity, last year India established the India-UN Development Partnership Fund that supports Southern-owned and led, demand-driven, and transformational sustainable development projects across the developing world, with a focus on Least Developed Countries (LDCs) and Small Island Developing States (SIDS).

So, it is definitely wrong to say and claim that GST has not brought any changes in the Indian economy. 1.8 million New taxpayers mean that the country is getting direct revenue out of that. GST is definitely a good initiative; all you need is to learn more about the taxes. Taking assistance of a good tax service company would also solve your purpose in better manner.

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What Changes are introduced for Filing Return under GST?

The Goods and Services law also known as the GST is always the talk of the town. Every day a new development is introduced in this country’s only tax GST. Now, the latest news is regarding the filing of return under GST. From this time onwards there would be three forms to be filed in a month and one additional annual return. So, total 37 returns are to be filed. The complete details of the return are mentioned below.

  • GSTR1 is to be filed by the seller by 10th of next month. This gets auto-populated to the buyer who corrects it and then files GSTR2 by 15th of the month.
  • GSTR3 contains tax liability of an assessee as the seller and input tax credit as the buyer. So, the assessee can net the two.
  • For the first quarter(July-Sept, 2017), GSTR3B, the summary of input-output, is to be filed by 20th of the next month, instead of GSTR3

Present system

Well, the present system of GST filing is quite different from the one existing. It is required that one should understand it well and should be aware of the changes that have been made in place of what was existing earlier.

  • After GST filing got complicated, GST Council suspended GSTR2 and GSTR3.
  • It extended GSTR3B first till December 2017, then till March 2018, and then till June 2018. Now it has been extended further.
  • GSTR 3B is to be filed by 20th of the next month.
  • Deadline of GSTR1 was extended to 40 days from the end of the month of transactions. This timeline, however, again is being shortened in a phased manner.
  • A group of ministers was constituted under Bihar deputy chief minister Sushil Modi to suggest new models based on the suggestions of Infosys chairman Nandan Nilekani and the officers’ committee.

Nilekani’s Model

The Nandan Nilekani’s model for GST is really very interesting and presents the most important clauses for the same. The main objectives of the model are listed here.

  • The seller will upload invoices and the buyer will acknowledge that.
  • Input tax credit will be available to the buyer on the basis of invoices uploaded by the seller. No credit for missing invoices

Officers’ Model

This is another important model related with GST return. The main points in consideration with the Officer’s model are mentioned below.

  • Similar to the Nilekani model but with an option for provisional credit for missing invoices
  • If the seller disputes the transactions, provisional credit will be reversed.

New model approved by GST Council

First stage

  • The present model of GSTR1 and GSTR3B will continue for six months with the timeline for GSTR1 shortened.

Second stage

  • The seller will then upload invoices. But, provisional credit will be allowed to the buyer, based on his/her calculations, even if the seller does not upload related invoices.
  • Assesses will have to file one return in a month, except for those who have no transactions or those who are under the composition scheme as they will file quarterly returns.

Third stage

  • There will be no provisional credit. Credit will be based on invoices put up by the seller.
  • The government will recover the tax from the seller and in extreme cases where the seller is not located or he/she does not have assets, the buyer will have to pay taxes.
  • Other processes will be the same as in stage two.

Understanding the tax laws is really very important. When it comes to GST then one should not take any sort of risk in any form. For your business GST registration number or GST tax filing you should contact S Lohia and Associates. A trusted company with the good knowledge and experience in GST return filing located in New Delhi, India.

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Everything You Want to Know About New Income Tax Return Form

The news of recent development is coming from the income tax department. It recently notified the income tax return (ITR) forms for the financial year 2017-18 (the assessment year 2018-19). A one-page simplified ITR Form-1 (Sahaj) has been notified. A very interesting thing to know about the new form is that the forms seek more details from individual taxpayers about their salary structure and income from property, say tax experts. The ITR Form-1 (Sahaj) can be filed by an individual who is a resident having income up to Rs.50 lakh and is receiving income from salary, one house property/other income (interest etc.).

For the previous assessment year (2017-18), a one-page simplified ITR Form-1 (Sahaj) was also notified. This benefited around 3 crore taxpayers, who have filed their return in this simplified form, the tax department said.The new Sahaj form seeks an assesses salary details such as allowances that are not exempt, the value of perquisites, profit in lieu of salary and deductions claimed under Section 16. 31st July is the last date to file Income Tax Return.

Experts have their own view about the Sahaj form, one expert claimed that “The Sahaj form has been amended to incorporate the same details for salary and house property as in other forms. Hence, the simplicity of the form has been somewhat diluted. Further, the requirement for GSTIN and turnover as per GST returns for assesses having business or profession has been incorporated, hence the effort has been made to integrate for the check,”

Income tax slabs/rates for FY 2017-18:

General category   Senior citizens   Super senior citizens      
(Up to 60 years of age) (60-80 years) (Above 80 years)
Income Tax Income Tax Income Tax
Up to Rs. 2.5 lakh Nil Up to Rs. 3 lakh Nil Up to Rs. 5 lakh Nil
Rs. 2,50,001-Rs. 5 lakh 5% Rs. 3,00,001-Rs. 5 lakh 5% Rs. 5,00,001-Rs. 10 lakh 20%
Rs. 500,001-Rs. 10 lakh 20% Rs. 5,00,001-Rs. 10 lakh 20% Above Rs. 10 lakh 30%
Above Rs. 10 lakh 30% Above Rs. 10 lakh 30%

Surcharge of 10% for income between Rs. 50 lakh and Rs. 1 crore with marginal relief

Surcharge of 15% for income above Rs. 1 crore with marginal relief

# Rebate of up to Rs. 2,500 for taxable salary up to Rs. 3.5 lakh

# Education and higher education cess of 3%

The amount of income-tax gets increased by a surcharge at the rate of 10 percent of such tax, where the total income exceeds Rs. 50 lakh but does not exceed Rs. 1 lakh. However, the surcharge shall be subject to marginal relief. The amount of income-tax shall be increased by a surcharge at the rate of 15% of such tax, where the total income exceeds Rs. 1 lakh. However, the surcharge shall be subject to marginal relief. To understand the law better, it is required to consult a tax service company and proceed with the income tax return filing at the earliest to avoid any sort of problem.

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How the New Income Tax Rules Going to Affect Taxpayers

With the start of new financial year, several changes in income tax has been introduced which would be effective from April 2018. These include penalty on late filing of income tax returns (ITR), medical reimbursement and transport allowance becoming taxable, and a 10 percent tax on long-term capital gains (LTCG) from listed shares and equity-oriented mutual funds. It is much necessary to understand the tax changes to face the fiscal well.

Here’s a list of all the tax changes that have come into effect from April 1.

Levy of LTCG Tax on Shares and Equity-Oriented Mutual Funds: LTCG from the sale of shares and equity-oriented mutual funds will attract tax at a flat rate of 10 percent. Indexation benefit (adjusting the purchase cost with respect to inflation) will not be available. Further, LTCG up to Rs 1 lakh in one fiscal will be exempted from tax. Click here to read more about how this LTCG tax will be calculated.

DDT Introduced For Equity Mutual Funds: Dividends declared in equity-oriented mutual fund schemes will come under the purview of dividend distribution tax (DDT) with effect from April 1. The tax will be levied at 10 percent and will be deducted by the fund house before paying dividends.

Senior Citizens to Get More Benefits: Starting from 1 April, interest income earned by senior citizens will be exempt up to Rs 50,000 a year. This includes interest income earned from savings bank/post office accounts, fixed deposits (FDs) and recurring deposits (RDs). This tax benefit is available to them under the newly inserted section 80TTB of the Income tax Act. TDS will be deducted only if interest income is more than Rs 50,000 in year.

Penalty on Late Filing of ITR: Starting from April 1, if you file your ITR post the deadline of July 31, 2018 (unless the tax department extends it), you will be liable to pay a maximum penalty of Rs 10,000.As per the new law, a penalty of Rs 5,000 will be levied if the return is filed after the due date but before December 31 of that year and Rs 10,000 post December 31. However, as relief to small taxpayers, if your income is not more than Rs 5 lakh, the maximum penalty levied will be Rs 1,000.

Reduction in the Time Limit to Revise Your ITR: Apart from penalty on late filing of ITR, if you make a mistake while filing for FY2017-18, then you would have time till 31 March, 2019 to file your revised return.

Hike in Cess Levied on Tax Liability: Starting from FY 2018-19, the cess levied on the tax liability will be hiked by 1 per cent to 4 percent, as proposed in the budget. The cess will be called ‘Education and Health Cess’, replacing the current 3 per cent education cess.

To understand the law even better, you should consult a tax service company, so that you may get the true information about the same.

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5 Tax Saving Schemes for the Financial Year 2017-18

The tax saving season is on and both, salaried and non-salaried taxpayers would comparing tax saving investment options. While choosing the right tax saver, among several other factors such as safety, liquidity and returns, make sure you understand how the returns would be taxed. If the income earned is taxable, the scope to make money over the long run gets constrained as taxes will eat into your returns. In this article, we are going to highlight about the five most important points that anyone could implement in order to save the income tax and that will help them in the long run too.

Equity-Linked Savings Schemes

Equity-linked savings schemes (ELSS) are diversified equity mutual funds with two differentiating features – one, investment amount in them qualifies for tax benefit under Section 80C of the Income Tax Act, 1961, up to a limit of Rs 1.5 lakh a year and secondly, the amount invested has a lock-in period of 3 years. Every mutual fund (MF) house offers them and generally uses the word tax-saving in its name to distinguish them from their other mutual fund schemes. The returns in ELSS are not fixed and neither assured but is dependent on the performance of equity markets.

Public Provident Fund

For decades, Public Provident Fund (PPF) Scheme, 1968 has been a favourite savings avenue for several investors and is still standing tall. After all, the principal and the interest earned have a sovereign guarantee and the returns are tax-free.

Employees’ Provident Fund

Employees’ Provident Fund (EPF) is another avenue that helps a salaried individual not only helps save tax through involuntary savings but also accumulate tax-free corpus. An employee contributes 12 percent of one’s basic salary each month mandatorily towards his EPF account. An equal share is contributed by the employer but only a portion (3.67 percent) goes into EPF.

Unit Linked Insurance Plan

Unit linked insurance plan (Ulip) is a hybrid product, a combo of protection and saving. It not only provides life insurance but also helps channel one’s savings into various market-linked assets for meeting long-term goals.

Traditional insurance plans

Traditional insurance plans could be an endowment, money-back or a whole life plan. Unlike pure term insurance plans they have a savings element in them and come with a fixed term and a fixed sum assured. The premiums are based on the age at the time of entry, the life coverage and the period for which coverage is required. Premiums are to be paid each year till maturity.

These are the best tax saving plans. You can contact a trustworthy tax saving company for further references and to get the best advice in the same.

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Various Laws under Goods and Services Tax Everyone Should Know

The goods and services tax is one amongst the most desired news of all the time for the taxpayers. Every day some developments happen in the same. To understand the tax better, one has to keep a close eye on the same. An indirect tax that has subsumed more than a dozen of state levies. GST replaced State taxes such as VAT, Central Sales Tax, Purchase Tax, Entry Tax, and Entertainment Tax, taxes on advertisements, lotteries, betting and gambling, and state cesses and surcharges.
Hailed as the biggest tax reform since Independence, GST is comprised in three parts Central GST (CGST), State GST (SGST) and Integrated GST (IGST).

CGST: Central Goods and Services Tax (CGST) is levied on intrastate supplies of both goods and services by the Central Government and is governed by the CGST Act. SGST, governed by the State Government, will also be levied on the same intrastate supply.

SGST: The State Goods and Services Tax (SGST) is a tax charged on intra-state supplies of both goods and services by the state government and is governed by the SGST Act. An important point to note is that any tax liability obtained under SGST can be set off against SGST or IGST input tax credit only.

IGST: The Integrated Goods and Services Tax (IGST)        are applicable on all inter-state supplies of goods and/or services and will be governed by the IGST Act. The tax is levied on any supply of goods and/or services in both cases of import into India and export from India. Under IGST, exports would be zero-rated and the tax will be shared between the Central and State Government.

With uniform prices throughout the country, GST is a simpler tax regime which brings transparency in the system. The new technologically driven tax structure has all aspects like registration, returns filing, application for refund and response that needs to be completed online via the GST portal. To know well about the same consulting a trusted company for tax services would help.

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GST Return Filing Day Subjected to Extend Till June 2018

It is rumored after the latest meeting of GST council held on 9 March that the GST return filing date may get extended till June of this year.  The Council, chaired by Finance Minister Arun Jaitley and comprising his state counterparts, is also expected to finalize a simplified return filing procedure for businesses registered under Goods and Services Tax (GST) regime.Simplified sales return GSTR-3B was introduced in July, the month of GST roll out, to help businesses to file returns easily in the initial months of GST roll out. This was to be followed with filing of final returns — GSTR – 1, 2 and 3.

With businesses complaining of difficulty in invoice matching while filing final returns as well as complications in GSTN systems, the GST Council in November last year extended GSTR-3B filing requirement till end of March, 2018, and did away with filing of purchase return GSTR-2 and final return 3.The last date for filing initial GSTR-3B returns for a month is the 20th of the subsequent month.

The GST Council had in January entrusted Bihar Deputy Chief Minister Sushil Kumar Modi led GoM to work out a simplified return filing process so that businesses can fill up only a single form to file returns under GST. The group of ministers met last month to work out a simplified return form, but the meeting remained inconclusive. In the Group of Ministers meet, the Centre and state officials presented their model for return simplification, while Nandan Nilekani also made his presentation. The idea is GST return form should be simplified, it should ideally be one return every month, Modi had said.

About 8 crore GST returns have been filed so far on GST Network portal since implementation of GST on July 1. For no hassle in filing GST return or anything related to GST, you can contact a reliable and trusted tax services company that could help you in all desires of yours related to your business and GST return.

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