( i) Business losses, other than unabsorbed depreciation, can be carried forward for the subsequent eight years and set off against taxable business income
( ii) It is mandatory to submit the annual return of income within time in order to claim carry forward benefit
( iii) Losses of closely held companies can be carried forward for set-off, provided at least 51 per cent of the share capital continues to be beneficially held by the same person( s)
4.6.1.9 Withholding Tax
Businesses need to withhold tax on specified payments viz salary, contractual, brokerage, commission, professional fees, etc. To illustrate
Payee |
When |
Tax Withholding Rate |
Date of Deposit |
Reporting |
|
|
( per cent)* |
|
|
Employee |
If salary is taxable |
per prescribed slabs |
Within 7 days |
Quarterly |
|
|
Refer Para 4.6.2.4 |
of the month following the month in which payment is made |
|
Contractor |
Annual payment |
2 |
With in 7 days |
Quarterly |
|
exceeds ` 75,000 |
( 1 for individual payee) |
of the month following |
|
|
( US $ 1,377 approx) |
|
the month in which |
|
|
or, single payment |
|
the payment is accrued |
|
|
exceeds ` 30,000 |
|
or paid, whichever is |
|
|
US $ 551) |
|
earlier |
|
Landlord |
Annual rental |
10 |
With in 7 days |
Quarterly |
|
exceeds ` 180,000
( US $ 3305)
|
( 2 for plant, machinery or equipments) |
of the month following the month in which the payment is accrued |
|
Profession |
Annual payment |
10 |
or paid, whichever is |
|
|
exceeds ` 30,000( US $ 551 approx) |
|
earlier |
|
Figure 17 * Further enhanced by applicable surcharge and education cess if payment is made to non-residents. Note: Higher TDS rate of 20 % for not furnishing correct PAN: Requirement to furnish PAN to deductor is compulsory to deductor otherwise TDS shall be deducted @ 20 % with effect from April 1, 2010
4.6.2 Expatriate Taxation
Taxation of expatriates in India certainly merits special attention. Besides an inherent understanding of the domestic laws, an understanding of the concerned tax treaty is essential. The matter cannot be classified as always clear, since case rulings and emerging legal provisions have constant bearing. Normally an expatriate is taxed on his total income if he is a resident of India. A non resident is taxed on his income arising to him in India.
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