Arsh Thakur Beginner

1 year ago

How is GST Calculated?

Answer: The current GST rates in India are 5%, 12%, 18% and 28%. Businesses, wholesalers, manufacturers, and retailers can ascertain their GST amount by using the below formula:

GST Calculation

  • Add GST:
    GST Amount = (Original Cost x GST%)/100
    Net Price = Original Cost + GST Amount
  • Remove GST:
    GST Amount = Original Cost – [Original Cost x {100/(100+GST%)}]
    Net Price = Original Cost – GST Amount

To understand how this works, consider this example: A product is being sold at Rs. 400 and the GST rate on it is 18%. The gross amount of the product will be 400 + (400 x (18/100) = Rs. 472.

A number of tax calculators are available across different portals that can help you find out the GST. Some of the details that you will be required to input for calculating the GST return filing month, due date of filing return for the month, filing date, total tax liability during the month and purchases where the reverse charge mechanism is applicable.

Arsh Thakur Beginner

1 year ago

What are the Benefits of GST?

Answer: The key advantages of GST implementation are as under:

  • Creation of a unified common market.
  • The tax structure is simplified with lesser exemptions.
  • Eliminates the cascading effect of tax. The consumer gets the end-product at cheaper rates.
  • Taxpayers will have a common portal (GSTN).
  • Helps build a transparent tax administration.
  • Uniformity in SGST and IGST rates reduces tax evasion to a large extent.
  • Buying input goods and services for production from other states becomes cheaper.
  • Boost to the economy in the long run. Increased supply and demand of goods and services.

Arsh Thakur Beginner

1 year ago

What is Service Tax in India?
Answer: Service Tax was a tax that was levied by the Central Government of India on the services provided by service providers. This indirect tax came into being under the Finance Act, 1994. It was set at 15% for transactions that occurred on or after 01 June, 2016. The tax was to be paid to the government in order to enjoy different services that were received from service providers. In that case, the tax was paid by service providers, but recovered from service receivers who purchased or received the taxable services.

Arsh Thakur Beginner

1 year ago

Service Tax Exemptions in India?

As per the previous regulations, the service tax in India was paid on all the services excluding those that were included in the other set of services, namely, the negative list. While all the service providers were liable to pay service tax, including those in the government and private sectors, the main exemptions included the following:

  • A service provider of a small scale can avail an exemption if his turnover on the taxable services does not exceed INR 10 lakhs within the same financial year.
  • When some goods and services are received from a service provider, and there is proof indicating that no credit duty has been paid on those goods or materials, while there is written proof of their value, and the fact that the services are rendered as per the CENVAT Credit rules, then the recipients are exempt from paying the service tax on those goods and services.
  • The service tax is also not applicable to the services that are rendered to diplomatic missions as well as to officers on such mission plus their family members.
  • Some other services that are not taxable include services such as port services, containerised transport services and goods transport services which have been either received by exporters or used for exporting goods. Here, the service tax which is paid by an exporter on these services is then refunded to the exporter.
  • Any services that are provided to international organizations as well as to the United Nations are not taxable.
  • The services that are provided to developers of SEZ or to a unit of SEZ are exempt from tax.

Arsh Thakur Beginner

1 year ago

What is GST (Goods and Services Tax)?

GST (Goods and Services Tax) is an indirect tax that has replaced many Central and State taxes like excise duty, VAT, and service tax. It is a single comprehensive tax levied on all goods and services produced in India as well as those imported from other countries. The new tax regime came into effect on July 1, 2017, after years of deliberation – with the Atal Bihari Vajpayee Government first suggesting it in the year 2000.

Calvani Samantha Beginner

1 year ago

Payroll Tax In USA:

Employers must withhold federal income tax from employee wages and must forward the tax to the government. They also must pay federal and state unemployment tax and social security taxes.

The federal unemployment insurance rate = 6% (imposed on the first USD 7,000 of each employee’s wages). State unemployment insurance is mandatory in all 50 states and the District of Columbia and varies by state. Employers receive a credit, up to a maximum of 5.4%, against the federal tax for amounts paid to state unemployment insurance funds.

 

Calvani Samantha Beginner

1 year ago

Sales Tax in USA:

Sales tax is collected in 45 states with rates differing based on specific state. The lowest average combined rates are in Maine (5.50%),Wyoming (5.47%), Wisconsin (5.43%), Hawaii (4.35%) Alaska (1.76%). The highest average combined state sales tax rates are in Tennessee (9.45%), Arkansas (9.26%), Alabama (8.91%), Louisiana (8.91%), and Washington (8.89%). The differences in the tax rates result in consumers shopping across borders or buying products online.

Calvani Samantha Beginner

1 year ago

Employee Social Security (EE SS) in USA:

The social security tax (old-age, survivors, and disability) for employees is 6.2% on the first USD132,900 of wages paid.

The Medicare rate is 1.45% for employees. Employees also face an Additional Medicare Tax of 0.9% on their wages in excess of $200,000 in a calendar year. It is the employer’s responsibility to withhold this tax.

Calvani Samantha Beginner

1 year ago

Employer Social Security (ER SS) in USA:

The Federal Insurance Contributions Act (FICA) imposes old-age, survivors, and disability insurance taxes, also known as social security taxes and Medicare taxes.

The social security tax for employers is 6.2% on the first USD132,900 of wages paid.

The Medicare rate is 1.45% for employers. Employers are also responsible for withholding an Additional Medicare Tax of 0.9% on an employee’s wages in excess of $200,000 in a calendar year.

Calvani Samantha Beginner

1 year ago

IRS provides tax inflation adjustments for tax year 2022 in USA:

he Internal Revenue Service today announced the tax year 2022 annual inflation adjustments for more than 60 tax provisions, including the tax rate schedules and other tax changes. Revenue Procedure 2021-45 PDF provides details about these annual adjustments.

Highlights of changes in Revenue Procedure 2021-45:

The tax year 2022 adjustments described below generally apply to tax returns filed in 2023.

The tax items for tax year 2022 of greatest interest to most taxpayers include the following dollar amounts:

  • The standard deduction for married couples filing jointly for tax year 2022 rises to $25,900 up $800 from the prior year. For single taxpayers and married individuals filing separately, the standard deduction rises to $12,950 for 2022, up $400, and for heads of households, the standard deduction will be $19,400 for tax year 2022, up $600.
  • The personal exemption for tax year 2022 remains at 0, as it was for 2021, this elimination of the personal exemption was a provision in the Tax Cuts and Jobs Act.
  • Marginal Rates: For tax year 2022, the top tax rate remains 37% for individual single taxpayers with incomes greater than $539,900 ($647,850 for married couples filing jointly).The other rates are:
    35%, for incomes over $215,950 ($431,900 for married couples filing jointly);
    32% for incomes over $170,050 ($340,100 for married couples filing jointly);
    24% for incomes over $89,075 ($178,150 for married couples filing jointly);
    22% for incomes over $41,775 ($83,550 for married couples filing jointly);
    12% for incomes over $10,275 ($20,550 for married couples filing jointly).
    The lowest rate is 10% for incomes of single individuals with incomes of $10,275 or less ($20,550 for married couples filing jointly).