Monthly Archives: February 2017

Child Support Payments: Can You Claim Child Support Payments On Your Taxes In Canada #alabama

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Can You Claim Child Support Payments on Your Taxes in Canada?

If you have not made a declaration or claim for child support payments before the current tax year, you should report support payments made or received on your tax return — but note that the CRA no longer includes child support payments as income or deductions.

For previous court orders, you may be required to claim or deduct support payments, depending on the date child support court orders took effect. Child support payments can affect how you report spousal support.

Transition Date

May 1997 is the dividing line, says Wes Beharrell, certified financial planner and Division Director with Investors Group Financial Services in London, Ontario. Prior to May 1, 1997, both child and spousal support payments were deductible to the payer and taxable to the recipient. The rules for child support changed as of that date, and are no longer deductible. Some conditions exist that mandate agreements and orders issued prior to May 1997 to change to current rules.

Any amendment to an older agreement after the May 1997 date causes that agreement to update to current rules. If there is a subsequent agreement made after May 1997 between the same two people, previous agreements are also updated to the current rules.

If your order or agreement is dated earlier than May 1997 and both people agree, you can complete Form T1157 (Election for Child Support Payments) to change to the current rules as well. Child support is federally administered, so these guidelines apply to all provinces and territories.

Declaring Support Payments Made

Child support and spousal support are reported together on line 230. Spousal support payments remain deductible, while child support payments may or may not be, so line 220 reports what portion of the amount in line 230 is deductible.

For example, when your total annual support payments equal $4,800 divided equally between child and spousal support, you must enter $4,800 on line 230. If your child support arrangements predate May 1997, with no later agreements or orders, enter $4,800 on line 220, since all of your support payments are deductible.

Child support arrangements made in April 1997 or later alter your line 220 amount to $2,400 (accounting for deductible spousal support only).

Declaring Support Payments Received

Enter the total of all received support payments on line 156, and declare the taxable amount on line 128 of your return. This works the same way as with making support payments.

If your child support arrangements predate May 1997, lines 156 and 128 match. Later agreements for child support are not declared as taxable income and are subtracted from the amount in line 156 to give your line 128 amount.

You don’t need to declare any amounts your children receive outside of your agreement or order, such as gifts or allowance, that the support payer may give.

Child Support Priority

When your support order or agreement includes both child and spousal support, child support is considered paid first.

When support is underpaid, this may affect how you declare taxable income or support payment deductions. For example, the total support obligation for a year is $4,800 divided evenly between child and spouse, but only $2,400 of payments are made — because of the priority of child support, the CRA considers that no spousal support is paid.

The child support amount remains subject to the May 1997 provisions, but the recipient declares no taxable spousal support income and the payer may not deduct spousal support payments.

E-File Wisconsin (WI) State Tax Extension Forms #business #income #insurance

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Wisconsin State Tax Extension

If you have an extension for filing your federal return, this automatically gives you a 6-month Wisconsin extension, provided you attach a copy of your federal extension application to your Wisconsin income tax return. However, to avoid penalties you should pay at least 90% of total tax liability by April 18, 2016,2016.

Business extension for Wisconsin is granted after 30 days of federal extension ,thus extending 7 months of time to file your business returns. You don t have to apply exclusively with any form to get this extensions. However, in both the cases you can use a form (Form 1-ES & Form 4-ES) to make payments if owe to the state. For more information,please check with respective section in this page.

How do I get automatic business tax extension of time for Wisconsin?

Any extension of time granted by federal law or by the IRS for filing a federal corporation income tax return or exempt organization business income tax return automatically extends the time for filing the corresponding Wisconsin return. A federal extension form 7004 extends the due date of the Wisconsin return to 30 days after the extended due date of the federal return, regardless of when the federal return is actually filed.

If a corporation is not requesting an extension of time to file its federal return, but needs additional time to file its Wisconsin return, Wisconsin law provides an automatic extension of 7 months after the original Wisconsin due date or until the original due date of the corporation s federal return,whichever is later.

Does Wisconsin permit filing of consolidated return ?

The parent corporation of an affiliated group of corporations may file a consolidated federal corporation income tax return and obtain an extension of time to file the consolidated federal return. Wisconsin does not permit the filing of a consolidated return, but requires the filing of a combined return by corporations in a commonly controlled group engaged in a unitary business.

Tax payments

It is not necessary to pay the Wisconsin tax (“tax” includes economic development surcharge) that is estimated to be due in order to receive an extension of time to file the franchise or income tax return or the nonresident combined income tax return (Form 1CNS). However, an extension of time to file is not an extension of time to pay the tax. Tax not paid by the original due date of the return is subject to interest.

Interest:

Interest during the extension period is 1% per month, except that if the net tax due shown on a corporation franchise or income tax return is $500 or more, interest of 1% per month applies to only 10% of the tax due, and interest of 1.5% per month applies to the balance (this does not apply to Form 1CNS).

Exception: Interest will not be charged if the corporation qualifies for a federal extension due to a federally-declared disaster.
Interest during the extension period can be avoided by paying the taxes that are estimated to be due by the original due date of the tax return (if the actual tax due exceeds the estimate,the balance is subject to interest). Form 4-ES,”Wisconsin Corporation Estimated Tax Voucher,” Form PW-ES, “Wisconsin Pass-Through Entity Withholding Estimated Payment Voucher,” and/or My Tax Account should be used to make these estimated tax payments. If using a voucher, be sure it is for the same year as the tax return.

Why should I use Express Extension?

ExpressExtension has an experienced and competent team to meet all your individual and business tax solutions.We provide a complete and easy solution to all your tax needs.

Are extensions available if I can’t file my Wisconsin return by the due date?

Individual income tax return must be filed by April 18, 2016. unless you have an extension of time to file.
The following extension of time to file options are available:

  • Extensions available under federal law may be used for Wisconsin purposes, even if you do not need a federal extension because you filed your federal return by April 18, 2016. To obtain an extension only for Wisconsin, you must attach a statement to your Wisconsin income tax return indicating you wish to take the federal Form 4868 extension provision or attach a copy of the federal Form 4868 Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, with only the name, address, and signature areas completed.
  • If you have an extension for filing your federal return, this automatically gives you a 6-month Wisconsin extension, provided you attach a copy of your federal extension application to your Wisconsin income tax return.
  • If you are allowed an automatic 2-month extension for filing your federal return because you are outside the United States and Puerto Rico on April 18, 2016, this automatically gives you a Wisconsin extension. Attach a statement to your Wisconsin return explaining how you qualify.

If I have an extension, will this extend the time to pay any tax due?

Even though you may have an extension of time to file your return, you will owe interest on any tax not paid by April 18, 2016, 2015. Returns not filed by April 18, 2016, 2015, or during an extension period, are subject to additional interest and penalties. If you expect to owe additional tax, you can avoid the 1% per month interest charge during the extension period by paying the tax you will owe by April 18, 2016. Submit the payment with a Wisconsin Estimated Tax Voucher.

You will not be charged interest during an extension period if:

  • Operation Iraqi Freedom in the United States, or
  • You qualify for a federal extension because of service in a combat zone, or
  • You qualify for a federal extension due to a federally-declared disaster.

Penalty and Interest Charges on Tax Owed:

In all cases, interest will be charged at a rate of 1% per month from the date the tax should have been paid (April 18, 2015) until the date of payment. In addition, the state may assess the following penalties:

Late Payment Penalty

Wisconsin may also assess additional late payment penalties at a rate of 18% per year on the outstanding balance if you do not pay the total tax due by August 15, 2015.

If You Owe.

If you owe additional Wisconsin Income Taxes you may pay your estimated balance due in the following ways:

Pay with check or money order:
Prepare an Wisconsin Form 1-ES to download PDF. Enclose a check or money order along with the completed form and mail to:

Wisconsin Department of Revenue,
PO Box 930208,
Milwaukee,
WI 53293-0208.

Pay by Credit Card:
Wisconsin accepts payment by credit card through Official Payments Corporation. Making your payment in this way automatically qualifies you for an extension of time to file your tax return until August 15, 2015. You will not need to file any other forms at this time. You can do this either on the web or by telephone.

Official Payments Corporation will accept Discover/NOVUS, MasterCard, Visa or American Express card to pay your personal income taxes. There is a convenience fee for this service equal to 2.5% of the tax amount being charged. The minimum fee is $1.00.

To make your payment and receive an automatic extension of time to file, have the following information ready:

  • The amount you are paying in dollars and cents
  • Your social security number
  • Your spouse’s social security number (if applicable)
  • The first four letters of your last name
  • The first four letters of your spouse’s last name, if different from yours
  • Tax year 2016
  • Your home telephone number (including area code)
  • Credit card number
  • Credit card expiration date (MM/YYYY)
  • ZIP Code for the address where your credit card bills are sent

On the Web:
Make your payment at the Official Payments Corp. website.
By Telephone:
Use your touch-tone phone to call toll-free (800) 272-9829. At the end of your call you will be given a confirmation number. Write down and save this confirmation number for your records.

If You Do Not Owe.

The Wisconsin Department of Revenue does not require that you request an extension if you do not owe or are expecting a tax refund. There is nothing to be filed at this time.

Why should I use Express Extension?

ExpressExtension has an experienced and competent team to meet all your individual and business tax solutions.We provide a complete and easy solution to all your tax needs.

Public Access to Court Electronic Records #michigan #income #tax #forms

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Public Access to Court Electronic Records (PACER) is an electronic public access service that allows users to obtain case and docket information online from federal appellate, district, and bankruptcy courts, and the PACER Case Locator. PACER is provided by the Federal Judiciary in keeping with its commitment to providing public access to court information via a centralized service.

NextGen CM/ECF

The Federal Judiciary has developed a Next Generation (NextGen) Case Management/ Electronic Case Files (CM/ECF) system that will allow you to use the same account for both PACER and electronic filing access.

More information on the improvements to PACER and CM/ECF is available. Check back for updates as courts go live on the new system.

Click here if you received a notice about NextGen CM/ECF from a federal court or just have questions about NextGen CM/ECF.

Frequently Used

PACER Case Locator

The PACER Case Locator is a national index for U.S. district, bankruptcy, and appellate courts. A subset of information from each case is transferred to the PACER Case Locator server each night.

The system serves as a locator index for PACER. You may conduct nationwide searches to determine whether or not a party is involved in federal litigation.
Search Now

PACER Announcements

Roth IRA Contribution Limits in 2016 #income #rules

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Roth IRA Contribution Limits in 2016

The Internal Revenue Service (IRS) recently announced Roth individual retirement account (IRA) contribution limits and income limits for 2016. There are only minor changes from 2015.

Contribution Limits

The limit on contributions to a Roth IRA are unchanged. Individuals may still contribute a maximum of $5,500. People over the age of 50 are allowed to add an additional $1,000 for a total contribution of $6,500.

Income Limits

One of the IRS rules on Roth IRA is that your income can not exceed a certain level of modified adjusted gross income (MAGI). The amount that you can contribute to a Roth IRA first enters a phase-out stage and then goes to zero. The income limits vary according to tax-filing status.

Taxpayers filing jointly as married in 2016 enter phaseout at $184,000 and become ineligible at $194,000. Single taxpayers or people filing as head of household enter phaseout at $117,000 and become ineligible at $132,000.

IRS Publication 590-A provides a worksheet to figure MAGI and the allowable contribution amounts.

Retirement Savings Tax Credit

Low- and moderate-income taxpayers may qualify for an additional tax break. The retirement savings tax credit may provide a 10 to 50% tax credit on the amount contributed to a Roth IRA. Taxpayers who are married and filing jointly must have incomes below $61,500; head-of-household filers must have incomes below $46,125, and single taxpayers must have incomes below $30,750.

The tax credit percentage is calculated using IRS Form 8880.

What Is a Roth IRA?

A Roth IRA is a special type of tax-sheltered retirement account. Similar to a traditional IRA, all earnings on funds inside the account accumulate without being subjected to income taxes. and withdrawals may start at age 59 1/2.

There are three main differences between a traditional IRA and a Roth IRA. Contributions to a traditional IRA are fully tax-deductible, but Roth IRA contributions are not tax-deductible. Distributions from a traditional IRA are fully taxable, while distributions from a Roth IRA are tax-free. Traditional IRA accounts must start making distributions when the beneficiary reaches age 70 1/2, while a Roth IRA has no required age for the start of distributions.

The money put into a Roth IRA has already been taxed, so contributions may be taken out at any time without any taxes or penalties.

Traditional IRA vs. Roth IRA

Whether you should contribute to a traditional IRA or a Roth IRA depends on whether you think your tax bracket will be higher when you retire than it is now, or if you want the contributions to be available in an emergency.

If you have a lower income or if you are younger, you do not need the tax deduction and are better served by using a Roth IRA and taking advantage of years of tax-free compounding. If you have a higher income, you get more advantage from the tax deductions and should choose a traditional IRA. If you have both types of accounts, you have greater flexibility in managing your tax status in retirement.

Investments for a Roth IRA

The most appropriate investment for your Roth IRA is a selection of either growth- and income-oriented mutual funds or an index fund that tracks the S P 500 average. These types of investments rely on professionals to do the work; they have lower fees and need very little attention until you are getting close to retirement. When retirement is near, look at investment diversification and possibly move your money to more conservative investments.

Sophisticated investors with larger accounts can invest in almost any class of investment to boost or shelter returns. Futures, options, real estate. small corporations and venture capital are just a few of the choices available through self-directed retirement plan administrators.

However, most financial advisers would counsel that the bulk of funds should be in more conservative investments.

The Hamptons Effect refers to a dip in trading prior to the labor day weekend followed by increased trading volume as traders.

There is no alternative is used to explain a less-than-ideal portfolio allocation, usually to stocks, since other asset.

A financial asset donation made to a non-profit group or institution in the form of investment funds or other property that.

The amount by which assets exceed liabilities. Net worth is a concept applicable to individuals and businesses as a key measure.

A style of trading that attempts to capture gains in a stock within one to four days. Swing traders use technical analysis.

A type of federal, fixed-rate student loan that was available to college and university undergraduate and graduate students.

EZ File – What is it and how do I open it? #sample #balance #sheet

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Opening EZ files

What is an EZ file?

Every day thousands of users submit information to us about which programs they use to open specific types of files.

While we do not yet have a description of the EZ file format and what it is normally used for, we do know which programs are known to open these files. See the list of programs recommended by our users below.

We are constantly working on adding more file type descriptions to the site – the current count exceeds thousand by far, and more information about EZ files will hopefully be added soon.

Software that will open, convert or fix EZ files

Windows

What is a file extension?

A file extension is the characters after the last dot in a file name. For example, in the file name “winmail.dat”, the file extension is “dat”. It helps Windows select the right program to open the file.

We help you open your file

We have a huge database of file extensions (file types) with detailed descriptions. We hand pick programs that we know can open or otherwise handle each specific type of file.

Original downloads only

All software listed on file.org is hosted and delivered directly by the manufacturers. We do not host downloads on our own, but point you to the newest, original downloads.

Copyright 2010-2016 Trusted Software Aps – All rights reserved.

Taxes in India #income #tax #slab

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Paying taxes in India can be a complicated matter, and it s recommended expats consult a tax specialist to facilitate the matter.

Am I a taxpayer in India?

Each taxpayer, whether expat or local, is allocated a unique identifying number called a Permanent Account Number (PAN).

All taxpayers, including non-residents, must apply for PAN if their taxable income exceeds the maximum amount not chargeable to tax, or any person carrying on a business or profession whose total sales, turnover, gross receipts exceed or are likely to exceed Rs. 500,000 in any previous year.

Every person who is required to deduct tax at source must apply for a tax deduction at source number (TAN), and quote this number on all certificates issued for tax deducted and remitted to the government and also on all returns relating to withholding tax.

India s tax calculations follow the financial year from April to March. For example, the income earned for any period which falls between 1st April 2012 and 31st March 2013 (called the Previous Year ) will be taxable in the next financial year (called Assessment Year ) i.e. 1st April 2013 to 31st March 2014.

The tax returns have to be filed by either 31 July or 30 September of the assessment year, depending on the requirement of the tax audit for the individual.

Tax Residence Categories

Expats will fall into one of three tax residence categories in India. These categories are the primary criterion used to determine what income a person must pay tax on – their worldwide income or the income accruing and arising in India.

  • Resident and Ordinarily Resident (ROR)
  • Resident but Not Ordinarily Resident (RNOR)
  • Non Resident (NR)

Rule 1

An Individual is a Resident in India in any financial year if he/she:

  1. Is in India in that year for a period of 182 days or more, or
  2. Within four years preceding that year has been in India for 365 days or more and is in India for a period of 60 days or more.

If an individual s stay does not satisfty the resident requirements they are considered an NR. Alternativley, if an individual s status as a resident in India is confirmed by the above rule, they must be catergorised as a ROR or RNOR. To determine their status the following rule must be applied
Rule 2
An Individual who is a Resident is a RNOR in India if he/she

  1. Has been a NR in India for nine out of ten years preceding that year, or
  2. Has been outside of India for 729 days or less during the seven previous years preceding that year.

Foreign executives working in India on a continuing basis would be RNOR for the first two years of their employment, but from the third year they will become ROR and will be taxed in India on their worldwide income.

The administration usually verifies passports to determine the number of days an individual has been present in India.

Taxability of Tax Residents vs. Non Tax Residents

Once one has figured out which category of tax residence they satisfy, they can determine which portion of income will be taxed.

  • An ROR (Determined as per Rule 1 2) is subject to tax on their worldwide income (including capital gains).
  • A NRs (determined as per Rule 1) are subject to tax on Income received in India or accruing or arising (including deemed to be received or accruing or arising) in India.
  • An RNOR (determined as per rule 1 2) are subject to the same tax treatment as NRs, except that income accruing or arising outside India is also chargeable if it is derived from a business controlled in India or a Profession set up in India.

Residents (ROR) are subject to tax on their worldwide income, including capital gains. Income from abroad is taxable in India on gross basis and credit is provided for the taxes paid abroad; however, such credit cannot exceed the tax payable in India on such income.

Non residents (NR) are liable to tax in India on their Indian source income and income received or deemed to be received in India or deemed to be accruing or arising in India. Foreign source income of non residents is exempt from Indian income tax, subject to certain deeming provisions.

Individuals who are residents, but not ordinarily residents (RNOR), are subject to the same treatment as non residents, except that income accruing or arising outside India is also chargeable to tax in India if it is derived from business controlled in India or a profession set up in India.

What if, as an expat in India, I am a resident in two countries?

India has double taxation agreements, which override the Indian law, with virtually all its major trading partners. Meaning, expats are not liable to pay taxes in both countries of residence. Consult a tax specialist to determine if ones home country and India have such an agreement in place, and to determine in which country one should file taxes.

Can I use tax planning to accelerate or defer residence?

Expats can use careful tax planning to avoid becoming a tax resident in India, and can thus avoid paying taxes on a worldwide income.

Expatriates seeking to accelerate or defer tax residence in India should consider all the rules related to the residential status mentioned above. Pay special attention to the ROR criteria, noting the number of days for which it is necessary an individual remains in India to satisfy this status.

For example, splitting the time spent in India for a lengthy assignment between two financial years can help an individual avoid tax residence status.

Taxable categories in India

The following categories of income are taxable in India

  1. Salaries
  2. Income from House Property
  3. Profits and Gains from business or profession
  4. Capital Gains, and
  5. Income from other sources

Tax rates in India

The tax rates in India for the financial year 2013 to 2014 and 2014 to 2015 assessment year is as follows:

  • Up to INR 200,000 = NIL
  • INR 200,000 INR 500,000 = 10 percent
  • INR 500,001 INR 1000,000 = 20 percent
  • INR 1,000,000 and above = 30 percent

Non-resident women and senior citizens are subject to the same tax rates.

Income from Capital gains

Residents are subject to capital gains tax subject to specific rules applicable. These rules determine the rate of taxation and whether such income is to be taxed or not. Capital gains tax applies to all capital assets which have been defined as per Section 2(14) of the Income Tax Act, 1961. It must be noted that from Assessment year 2008-09 jewellery, archaeological collections, drawing, paintings, sculptures or any work of art became taxable under this catergory.

The capital gains are segregated into short term and long term capital gains. Generally gains are considered as long term only if the asset is held for more than 36 months with the exception in case of shares or listed securities or units of UTI/Mutual fund etc. where an asset becomes long term if it is held for more than 12 months.

The long term capital gains are chargeable at 20 percent rate of tax on the gains and in certain specified cases the rate is 10 percent. The gains are calculated by deducting the indexed cost of acquisition (only in long term) from the sales consideration. In the case of short term gains, the same are calculated at the normal rates of 30+ percent surcharge and education cess.

Long term capital gains arising on transfer of global depository receipts (which were issues in accordance with the notified Employee Stock option scheme, and purchased in foreign currency by a resident employee of an Indian company) are subject to tax of 10 percent. Benefits of indexation and calculating long term capital gains in foreign currency and then reconverting them into Indian currency are not available.

Non Residents

Non Residents are subject to capital gains tax in India only in respect of capital gains accruing or arising or received in India (including capital gains deemed to be accruing, arising or received in India).

In case of shares or debentures of an Indian company acquired in foreign currency by non residents, the cost of acquisition, expenditure incurred wholly and exclusively in connection with the transfer and full value of consideration are converted back into foreign currency and gains are calculated and taxed at a rate of 20 percent. Long term capital gains arising from sale of shares and securities through a recognised stock exchange are exempt from tax.

The benefit of cost indexation is not available to non resident Indians who claim special tax rate of 10 percent and to other non residents where capital gains on the transfer of shares in, and debentures of, Indian companies are determined in foreign currency.

Claiming Income Support During Pregnancy #free #online #income #tax

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Claiming Income Support During Pregnancy

Income Support is offered to qualified women to assist them during pregnancy and after. This is a much needed income for some women who are struggling to make ends meet. This benefit is available to women who are incapable of working because they are pregnant or are due to have their baby in 11 weeks, or if they had their baby in the last 15 weeks. This guide will show you the process to apply for income support when 29 weeks pregnant. Also, it applies to those living in England, Scotland or Wales as there are different rules for Northern Ireland.

Making a Claim – Income Support Explained

If you feel you may be entitled to this benefit, you can make a claim by calling 0800 055 6688 between the hours of 8am and 6pm, Monday through Friday.

If you believe you were entitled to these benefits before your initial claim but did not make a claim for that time period, you might also be able to get money for the previous three months if you qualify. Acceptable reasons for not applying on time may be due to the fact you received the wrong information by the Jobcentre or because you may have language difficulties.

Also, it may be helpful to know that you don’t have to have a permanent address to make a claim. If you sleep rough, live in a hostel or care home, you can still apply.

To make a claim for income support when 29 weeks pregnant, you will need to give the following details:

The income of your partner

Who lives with you

Claiming Support If You Live With a Partner

Only one person in the household can claim Income Support. Anyone you may live with that you consider to be in a romantic relationship with counts as a partner.

If you claim as a couple, your partner’s income and capital will be taken into account along with yours. Therefore, if your partner works 24 hours or more per week, you won’t be able to make a claim.

Reasons You May Not Qualify for Income Support

Have a savings above 16,000 Pounds.

If you need permission to enter the UK.

You receive Jobseeker’s Allowance.

You receive Employment and Support Allowance.

You are a young person who is looked after by a local authority.

Where to Find Help with Income Support

If questioning, “When can I claim income support when I’m pregnant?” there is assistance available to you. The Citizen’s Advice volunteers are well aware of the benefits system and can help you understand what you may be entitled to. To get in person advice, you can visit your local bureau and bring along all of the details of your benefits and your financial situation.

How Much Can I Expect to Receive?

The actual amount you are entitled to varies on your individual circumstances, but if you qualify and have no income, you’ll be eligible for at least 57.90 Pounds a week.

Www.income tax india.gov.in #how #to #income #tax #return

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File Validation Utility (FVU) version 2.147 (to validate statement(s) pertaining to FY 2007-08 to 2009-10) and FVU version 5.1 (to validate statement(s) pertaining to FY 2010-11 onwards) are available for download at TIN website. NSDL e-Gov Return Preparation Utility (RPU version 1.6) for e-TDS/TCS Statements from FY 2007-08 onwards is released (27/06/2016) Facility to make payment of demand raised by CPC-TDS against TDS on Sale of Property has been enabled. For details, please click on the URL https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp and select Demand Payment. Services of TIN call centre are now available 24 x 7.You may call on 020-27218080 anytime and select appropriate options to check the status of PAN /TAN application.

NSDL e-Governance Infrastructure Limited

Copyright 2005 | NSDL e-Governance Infrastructure Limited (NSDL e-Gov).

Page last modified on. August 26, 2016

Disability Income – State Farm #endowment #life #insurance

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Disability Income Goes to Work for You When You Can’t

Most people don’t realize the risk of becoming disabled, permanently or temporarily, at some point in their lives. But the reality is that at age 40, your chances of becoming disabled for 90 days or more prior to age 65 is 43%. (Source: 2004 Field Guide, National Underwriter).

When evaluating the chances of disability, you should carefully consider sources of available funds:

Employer Coverage

How long would the business continue to pay you? How much would they pay you? When would your employer have to hire a replacement? Could the business afford to pay both?

Using Savings

If you saved 10% of your income each year, one year of total disability could wipe out 10 years of savings. Can you afford that?

Obtaining a Loan

Without an income, who will lend you money?

Working Spouse or Partner

Can your spouse or partner earn enough and be a companion, parent, private nurse, and employee all at the same time?

Selling Investments

Will a sale under forced conditions bring a true value? What will their value be at the time you are disabled?

Collecting Social Security

You cannot collect benefits until the end of the fifth full calendar month of total disability and only if it is expected to last 12 months or more. What will you do if your disability doesn’t meet those requirements? Even if it does, can you wait six months for payment?

Counting on Friends, Family or Charity

Would these sources have funds for you to use? Do you want to depend on them?

Many different disability insurance products are available to help protect you and your family against severe financial hardship that may accompany a disability.

For additional information on Disability Income. Mortgage Disability Income. or Individual Credit Disability Insurance. please contact a State Farm agent or To learn more about Disability Income Plans in your state of residence, select your state to get started:

50-year trend of Indian personal tax rates- Business News #refund #of #income #tax

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50-year trend of Indian personal tax rates

It is that time of the year again when the common man waits in anticipation for the finance minister (‘FM’) to announce the annual budget. Even as the FM tries to juggle many hats and get the balancing act right i.e. managing expectations of common man, inflation, fiscal deficit, the common always feels that the tax rates are very high.

However, going by the history of the evolution of personal tax regime in India, a different picture emerges. The tax rates have come down considerably over the years, indicating that reality and perception are poles apart. As we try to bring in front some of the key personal tax reforms that the country has witnessed, it becomes clear that Indian personal tax regime is indeed a good one.

Evolution of Tax System in India
The systematic attempt to evolve a tax system in independent India started with implementation of the report of Taxation Enquiry Commission in India in 1953. But the personal income tax rates were extraordinarily high during the decades of 1950-80.

In 1970-71, the personal income tax had 11 tax brackets with the tax rates progressively rising from 10 per cent to 85 per cent. When the surcharge of 10 per cent was taken into account, the maximum marginal rate for individuals was a mind boggling 93.50 per cent In 1973-74 the highest tax rate applicable to an individual could have gone up to an astronomical level of 97.50 per cent!

The Direct Taxes Enquiry Committee, 1971 attributed the large scale tax evasion to the exorbitant tax rates and recommended reduction in the marginal tax rate to 70 per cent. This change was implemented in 1974-75, when the marginal rate was brought down to 77 per cent, including 10 per cent surcharge. In 1976-77, the marginal rate was further reduced to 66 per cent. A major simplification and rationalization initiative came in 1985-86, when the number of tax brackets were reduced from eight to four and the highest marginal rate was brought down to 50 per cent.

Liberalisation of Personal Income Taxation
The last wave of reform in personal income taxation was initiated on the basis of the recommendation of the Tax Reform Committee, 1991. The tax rates were considerably simplified to have only three tax brackets of 20, 30 and 40 per cent in 1992-93. Further reductions came in 1997-98, when the three rates were brought down to 10, 20 and 30 per cent.

Personal income tax rates have remained stable since then, with some changes in the tax slabs.

Change in slabs over the last 10 years
Budget 2004 did not raise the exemption limit but provided that those with incomes under Rs 1,00,000 need not to pay any tax. Further, all taxes were
topped up by a two per cent education cess, a surcharge dedicated to education cess fund from 2004-05 onwards.

Budget 2005 increased the exemption limit to Rs 1,35,000 for women and to Rs 1,85,000 for senior citizens. The maximum marginal rate of 30 percent was applicable for income above Rs 250,000.

The 2006 budget did not bring in any changes in the rates of personal taxation or the tax slabs.

In the 2007 budget, threshold limit of exemption for all the assessees was increased by Rs 10,000, thus giving every assessee a relief of Rs 1,000. An additional cess of 1 percent on all the taxes was levied to fund secondary education and higher education, taking the total education cess to three per cent.

The 2008 budget further increased the basic exemption limit for women tax payers to Rs 180,000 and for senior citizens the limit was increased to Rs. 225,000. The exemption limit was increased to Rs 1,50,000 for all other categories of individual taxpayers. Surcharge of 10 percent was applicable for income exceeds Rs 10,00,000.

Budget 2009 raised the threshold limit of exemption from Rs 1,80,000 to Rs 1,90,000 for women tax payers, from Rs 2,25,000 to Rs 2,40,000 for senior citizens; and from Rs. 1,50,000 to Rs 1,60,000 for all other categories of individual taxpayers. The maximum marginal tax rate of 30 per cent was applicable to income above Rs 500,000. Surcharge of 10 per cent was eliminated on personal income tax.

Budget 2010 further liberalised the tax slabs. The 20 percent rate was made applicable to income above Rs 500,000 and the maximum marginal rate of 30 percent was levied on income above Rs 8,00,000.

Way forward
As seen above, the personal income tax rates have steadily declined in India, with the maximum marginal rate of income tax coming down from a mind boggling 97.5 per cent to a much more manageable 30.9 per cent. Also, the slabs at which the various tax rates are applicable have been considerable widened over the years.

The inflation is on the higher side and a common man is struggling to manage his household budget and expects additional tax relief. While a further reduction in tax rates may not completely solve the common man’s problems, it will certainly go a long way in putting some much needed extra cash in his hand so that he is able to manage his household budget.

-By Vineet Agarwal Director, Tax and Regulatory Services, KPMG