Taxes and Accounting in India
- Tax Year
- The fiscal year begins on 1st of April and ends on the 31st of March of the next year.
- Accounting Standards
- Indian Accounting Standards (IAS) are based on the statements issued by the Institute Of Chartered Accountants of India (ICAI).
- Accounting Regulation Bodies
Institute of Chartered Accounts of India
- Accounting Reports
- 'Balance Sheet' and 'Profit & Loss' report.
- Publication Requirements
- The "balance sheet" and ‘profit and loss account' need to be published every fiscal year.
- Professional Accountancy Bodies
ICAI , Institute of Chartered Accounts of India
- Certification and Auditing
- Companies have to seek a statutory auditor to conduct an annual audit of the financial health of their organization. For more information, consult the Auditors Association of Southern India and The Institute of Cost and Works Accountants of India (ICWAI)
- Accounting News
Accounting news in India
India accounting news
- Nature of the Tax
- Value Added Tax (VAT) and Sale taxes, depending on the State. For more details, consult the business portal of India. A nationwide Goods and Services Tax (GST) whose rate will be around 14-16% is expected to be launched in April 2012.
- Tax Rate
- Reduced Tax Rate
- The lower rates are 4% (agriculture and industrial inputs) and 1% (gold and silver ornaments).
- Other Consumption Taxes
- Service Tax (12%) applies to more than 100 services. For details visit the web site:
Excise Duty: 8% (on drugs, pharmaceuticals, cans, paper, Water filtration and purification devices, etc), 12% (small cars, packaged software), 14% (cement) and 24%.
For further information consult the Central Board of excise and Customs.
- Company Tax
- 30% for domestic companies and 40% for foreign companies and branches of foreign companies.
- Tax Rate For Foreign Companies
- Resident companies are subject to tax on gross worldwide income while non-resident companies are taxed only on Indian-source income.
- Capital Gains Taxation
- Long-term capital gains
: 20% flat with indexation or 10% flat without indexation.
Short-term capital gains: 10%.
Gains from the sale of long-term capital assets are exempt from capital gains tax if they are reinvested in certain securities within six months and locked in for three years.
- Main Allowable Deductions and Tax Credit
- Specific deductions are allowed:
- A 100% deduction for interest payments on borrowed capital,
- Capital expenditure on research conducted in-house and for payments made for scientific research to specified organizations,
- Interest, royalties and fees paid outside of India to overseas affiliates or in India to a non-resident provided tax as required is withheld,
- Payments to employees under voluntary retirement schemes may be deducted over five years,
- Business losses (conditions apply).
Indian tax law does not permit companies to take a deduction for a general bad-debt reserve, although specific bad debts may be deducted when written off. For additional information, consult the Deloitte Tax Guide.
- Other Corporate Taxes
- A minimum alternative tax (MAT) is also imposed on corporations. If a company's tax liability is less than 10% of book profits, the book profits are deemed to be total income and are charged to tax at 10%, plus the applicable surcharge and cess.
A ‘fringe benefits tax' of 30% is imposed on the value of fringe benefits that companies provide or are deemed to provide to their employees.
|Taxation Income (INR)||Progressive Tax Rate up to 30%|
|Less than 160,000||0%|
|160,001 – 500,000||10%|
|500,001 – 800,000||INR 4,000 plus 20% of the amount exceeding INR 150,000|
|800,001 and above||INR 24,000 plus 30% of the amount exceeding INR 250,000|
- Allowable Deductions and Tax Credit
- Deductions are allowed for contributions to life insurance, recognized provident funds, national savings certificates, the national savings scheme, income from certain mutual funds and dividends, and some educational expenses up to an overall ceiling of INR 100,000.
- Special Expatriate Tax Regime
- There are no special exemptions or deductions available to foreign nationals working in India, except for local living allowances, which are exempt to the extent expense is actually incurred.
Double Taxation Treaties
- Countries With Whom a Double Taxation Treaty Have Been Signed
Treaties signed with countries for avoidation of double taxation.
- Withholding Taxes
- Dividends: 0%, Interest: 20%, Royalties:10%
- National Organizations
Controller-General of Patents, Designs and Trademarks
Protection of Plant Varieties and Farmers' Rights Authority
Department of Information Technology
National Intellectual Property Organization (NIPO)
- Regional Organizations
- International Membership
Member of the
WIPO (World Intellectual Property Organization)
Signatory to the Paris Convention For the Protection of Intellectual Property
Membership to the TRIPS agreement - Trade-Related Aspects of Intellectual Property Rights (TRIPS)
National Regulation and International Agreements
|Type of property and law||Validity||International Agreements Signed|
|| Patent Cooperation Treaty (PCT)
Strasbourg agreement Concerning the International Patent Classification
Trade Marks Act, 1999
|10 years, renewable every 10 years with a grace period of 6 months for renewal.|| Trademark law treaty
Protocol relating to the Madrid Agreement
||10 years, renewable for another 5 years.|
60 years, varies for different works.
| Berne convention
Convention for the Protection of Producers of Phonograms Against Unauthorized Duplication of Their Phonograms
Rome ConventionFor the Protection of Performers, Producers of Phonograms and Broadcasting Organizations
WIPO Copyright Treaty
WIPO Performances and Phonograms Treaty
Semi-Conductor Integrated Circuits Layout-Design Act,2000
|10 years, non-renewable.|
- Independence of Justice
- Judiciary is largely independent in India. But, the courts are severely backlogged and understaffed which results in the detention of a large number of persons who are awaiting trial. India accepts compulsory ICJ jurisdiction, with reservations.
- Equal Treatment of Nationals and Foreigners
- Though India is ruled by law and in the texts justice ensures non-discriminatory treatment of all cases. However in practice, fair trial to foreign nationals from the country's judicial system cannot be always guaranteed.
- The Language of Justice
- Recourse to an Interpreter
- Interpreters in other foreign languages are easily available.
- Sources of the Law and Legal Similarities
The Constitution of India – 1950
The country also has separate personal law codes for Muslims, Christians, and Hindus.
- Checking National Laws Online
Laws for India
- National Standards Organizations
Bureau of Indian Standards(BIS) - Earlier called as Indian Standards Institute (ISI)
- Integration in the International Standards Network
- The BIS is a founder member of the
International Standard organization (ISO) and of the
International Electrotechnical Commission (IEC)
For more details consult www.bis.org.in.
- Classification of Standards
- The symbol of the standard is ISI. Every ISI mark has a fixed format that carries the Indian Standard number on top of the mark based on the type of product.
- Online Consultation of Standards
- Bureau of Indian Standards (BIS)
- Certification Organizations
Quality Council of India
- General Information
Official web site of India
BuyUSA Information Guide
The Executive Planet
- Opening Hours and Days
- Shops are closed on Sunday. Governement office are closed on Saturday and Sunday. Banks close in the afternoon (from 14 in the week, from 12 on Saturday).
|New Year's Day||1st January|
|Idu'z Zuha / Bakrid (Muslim festival)||Dec/Jan, changes according to the year.|
|Republic Day||26th January|
|Mahashivratri (Hindu festival)||Feb/March, changes according to the year.|
|Mahavir Jayanthi (Hindu festival)||Feb/March, changes according to the year.|
|Holi (Festival of Colors) and Phagwah ? Hindu Festival||March, changes according to the year.|
|Milad-Un-Nabi (Birth of the Prophet Mohammed)||April/May, changes according to the year.|
|Good Friday||April, changes according to the year.|
|Buddha Purnima (Hindu festival)||May, changes according to the year.|
|Independence Day||15th August|
|Janmashtami (Birthday of Lord Krishna of Hindus)||Sep, changes according to the year.|
|Mahatma Gandhi's Birthday||2nd October|
|Id ul Fitr (End of Ramadan)||Oct, changes according to the year|
|Dussehra (Vijaya Dashami, a Hindu Festival)||Oct, changes according to the year|
|Deepavali or Diwali (Festival of Lights, a Hindu Festival)||Nov, changes according to the year|
|Guru Nanak's Birthday (A Sikh festival)||Nov, changes according to the year|
|Christmas Day||25th Dec|
|Note: Only the secular holidays of Republic Day, Independence Day and Mahatma Gandhi's Birthday are universally observed. Other public holidays in India tend to be observed on a strictly regional basis.|
Periods When Companies Usually Close
|Deepavali||2-3 days, Deepavali generally falls in the month of November|
|New Year||1-2 days on 31st Dec and 1st Jan|
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