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Custom duty, capitalgain tax, personal income tax

August 10, 2009
customs duty
Customs duty is a duty or tax, which is levied by Central Govt. on import of goods into, and export of goods from, India. It is collected from the importer or exporter of goods, but its incidence is actually borne by the consumer of the goods and not by the importer or the exporter who pay it.
These duties are usually levied with ad valorem rates and their base is determined by the domestic value ¬タリthe imported goods calculated at the official exchange rate. Similarly, export duties are imposed on export values expressed in domestic currency

The rates of basic duties vary from 0 to 30%.
Salient features are:

–  Peak customs duty reduced from 220% (in 1991) to 30% (in 2002).

–  The general project import duty (for new projects and substantial expansion of existing  projects) reduced from 85% to 25%.
–  Import duty under EPCG Scheme is 5%.
R&D imports – 5% customs duty.
–  Export made with imported inputs get concessions in form of duty drawback, duty
entitlement pass book scheme and advance licence.

–  Many type of industries such as 100% EOU and units in free trade zone get facility

of zero import duty.

–  An Authority for Advance Ruling for foreign investor

capital gains tax
A capital gains tax (abbreviated: CGT) is a tax charged on capital gains, the profit realized on the sale of a non-inventory asset that was purchased at a lower price.
The most common capital gains are realized from the sale of stocks, bonds, precious metals and property. Not all countries implement a capital gains tax and most have different rates of taxation for individuals and corporations.
Personal Income Tax
–   Personal Income Tax (PIT) is a direct tax levied on income of a person.
–   A person means an individual, an ordinary partnership, a non-juristic body
of  person, a deceased person and an undivided estate.
–    In general, a person liable to PIT has to compute his tax liability, file tax
return and pay tax, if any, accordingly on a calendar year basis.
Example 1: Let us take a case where the assessee’s income is Rs. 2,10,000.
  • According to the Income Tax Slab, the first 1,00,000 is not taxable.
  • The next Rs. 50,000 is taxable @10%.
  • 10% of Rs. 50,000 is Rs. 5,000.
  • The remaining Rs. 60,000 i.e. 2,10,000 – (1,00,000+50,000) is taxable @20%.
  • 20% of Rs. 60,000 is Rs. 12,000.
  • Therefore, the net Income Tax Payable is Rs. 5,000 + Rs. 12,000 i.e. Rs. 17,000.
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