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Tag: income tax

  • How Do Tax-Free Countries Make Money?

    It would be smooth sailing if you didn’t have to pay property taxes, income taxes, corporation taxes, sales tax, all direct and indirect taxes, and even water taxes, right? Whether you are wealthy or impoverished, you are obligated to pay the tax no matter what! Tax is a compulsory contribution towards the government.

    India has two integrated tax systems- direct and indirect tax systems, whereby direct tax relies on individuals’ income and property and indirect tax levies on goods and services incurred by an individual.

    As a taxpayer, you are required to contribute a specific percentage as tax from your income to pay for the things you have purchased as Good services Tax.

    Even if you are affluent, you have to deal with paying a high rate of taxes, and the poor would have to contribute according to the tax slab. As we all know, the tax system was established to produce revenue for initiatives aimed at boosting the country’s economy and raising the standard of living of its residents. But, what if there isn’t a tax system in place? How does the government deal with residents of lower socioeconomic status? Here we have listed out tax-free countries and how they earn a decent lifestyle without contributing to the economy.

    How Do Tax-Free Countries Earn?
    Top Countries With No Income Tax

    How Do Tax-Free Countries Earn?

    Customs & Import Duties

    Implementing tariffs on imported goods is one of the simplest and most effective ways for the tax-free government to generate revenue. Import duties, often known as customs duties, are an indirect tax placed on commodities that are brought into the country.

    This would assist the government in increasing revenue as well as regulation of commodities in the countries while also providing protection to the indigenous industry through the circulation of imported items.

    The rates of customs/import duties differ by country; for example, Kuwait charges roughly 5% in customs duty.

    There are five types of customs duties, that which a government levy on imported goods such as-

    • Basic Customs Duty
    • Countervailing Duty
    • Additional Customs Duty or Special
    • Protective Duty
    • Anti-dumping Duty

    Corporate registration and renewal fees

    In most cases, our country imposes a corporate tax on high-profiled corporate entities; however, in tax-free countries, there is no need to spend a lot of money on preliminary expenses for incorporation; instead, they ask you to meet corporate registration requirements for newly incorporated businesses under their jurisdiction.

    Aside from that, businesses should pay annual renewal costs in order to maintain their status as operational entities, which varies depending on the type of company they do. Banking, insurance, and other mutual financing corporations, for example, should pay additional annual renewal fees in order to function in such a finance industry.

    Countries such as Kuwait, Brunei, the United Arab Emirates, and others require foreign companies that have formed and are operating in their jurisdictions to pay registration and renewal fees.

    Tax Haven

    Any country or jurisdiction that gives foreign individuals and corporations reduced tax liability is known as a tax haven or offshore financial hub. To gain tax benefits, tax havens do not require enterprises or individuals to operate outside of their country.

    Tax Haven countries benefit from attracting cash to their banks and financial institutions, which may then be utilized to develop a vibrant financial industry. Individuals and businesses benefit from tax savings, which can vary from zero to low single digits in tax haven countries compared to high taxes in their own country.

    Apple, Nike, Goldman Sachs, and other major U.S. corporations such as Microsoft, IBM, General Electric, Pfizer, Exxon Mobil, Chevron, and Walmart are among the top tax haven beneficiaries. Ireland was exploited by Apple as a tax hideaway.

    If Apple had not taken advantage of tax havens, it would have repaid the US government $65.4 billion in taxes. Bermuda is used by Nike as a tax shelter. If tax haven benefits were not utilized, it would have paid $3.6 billion in taxes. Goldman Sachs holds $28.6 billion in Bermuda as a tax shelter.

    Luxembourg is often regarded as the best tax haven on the planet. The Cayman Islands currently have banking assets worth one-fifth of the world’s total banking assets of $30 trillion. The Cayman Islands have no direct taxes on residents, including property, income, and payroll taxes, in addition to no corporate tax.

    Hedge fund managers like the Cayman Islands because there is no corporate or income tax, including on interest and dividends generated on investments. Fortune 500 firms such as Pepsi, Marriott, and Wells Fargo have subsidiaries in the Cayman Islands.

    Top Tax Havens in the World:

    • Netherlands
    • Luxembourg
    • Singapore
    • Bermuda
    • The Channel Islands
    • Cayman Islands
    • Isle of Man
    • Mauritius
    • Switzerland
    • Ireland

    Departure taxes

    A departure tax is a price charged by a country when a person leaves the country, or a tax that airline passengers must pay in order to use an airport. A departure tax is levied by some countries only when a person departs by plane. The tax can be paid at the airport or by some other prepayment mechanism, or it can be charged to the airlines and included in the price of the plane ticket.

    Below is a list of nations that collect departure taxes:

    • Australia
    • Austria
    • Bangladesh
    • Brunei
    • Bermuda
    • Canada
    • Cambodia
    • China
    • Costa Rica
    • Cuba
    • Dominican Republic
    • Ecuador
    • Egypt
    • Fiji
    • Germany
    • Guyana
    • Honduras
    • Hong Kong
    • Iran
    • Ireland
    • Indonesia
    • Jamaica
    • Japan
    • Lebanon
    • Malaysia
    • Mexico
    • Palau
    • Panama
    • Peru
    • Philippines
    • Samoa
    • Saudi Arabia
    • Sri Lanka
    • Sweden
    • Thailand
    • Tunisia
    • Turkey
    • United Kingdom

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    Top Countries With No Income Tax

    Here is a list of some countries with no income tax:

    United Arab Emirates

    Individuals in the United Arab Emirates pay no income taxes, allowing them to earn tax-free wages. This Arab country is abundant in natural resources such as oil, and its free trade zones, which are open to foreign ownership and have no taxes, making it a popular investment location.

    Only international banks and oil businesses are subject to corporate tax, while all other industries are exempt. Excise duty is imposed on a small number of goods and services, however beginning in 2018, Value Added Tax will be imposed on the vast majority of goods. As is the case, Emirates Airline is one of the renowned brands in the airline industry, which literally contributed 3.044% GDP as of 2022.

    Qatar

    Individuals can generate money without paying taxes in this Arab country. Commercial activity is subject to an annual ten percent company tax on total state income. Rental income is taxed at a fixed rate of 10 percent.

    The country attracts a large number of ex-pats due to its tax-free atmosphere and sophisticated infrastructure. Some countries, such as the United States, the United Kingdom, Australia, Canada, Ireland, and South Africa, tax their citizens according to their governments’ tax laws.

    Bahamas

    This Caribbean country boasts tax-friendly legislation, making it a desirable location for foreign financial institutions and commercial interests. Personal and corporate income is not taxed in this tax haven.

    International businesses operating in the Bahamas are only subject to corporate taxes if their revenue is generated in the country. Wealth, inheritance, and capital gains are other categories that are tax-free. Residents of the country, regardless of citizenship status, can benefit from tax-free income.

    Monaco

    Monaco is well-known as a tax haven due to its personal and business tax rules. It does not levy taxes on citizens’ personal incomes. A person who has lived in Monaco for six months or longer is considered a resident and is free from paying income tax. In addition, there are no taxes on capital gains or net worth in this city-state.

    Monaco residents enjoy tax-free property ownership, however, rental homes are subject to a 1% annual tax. Monaco does not levy a business tax. Only specific sorts of businesses that make 25% or more of their profits from operations outside of the country are taxed.

    These tax rules, together with a strong commitment to financial confidentiality and data privacy, make this a very attractive place for ex-pats and foreign investors.

    Oman

    The tax regulations in this Gulf country are permissive and pro-business. It does not tax residents’ or non-residents’ personal incomes. These tax-free regulations include everything from wealth to capital gains to property. On their taxable income, businesses and enterprises must pay a 15% tax. Petroleum-related businesses, on the other hand, must pay a tax of 55%. Expats may be subject to a tax on their income.

    Bahrain

    Bahrain, which is located on the Persian Gulf, is a tax-free country that derives much of its income and government earnings from the finding of oil. Citizenship in Bahrain is tough to get, but permanent residency requires you to be retired, spend $135,000 in real estate, or invest $270,000 in a Bahraini enterprise.

    Maldives

    The Maldives has a thriving tourism economy, so there’s little justification for the island nation to collect an income tax on its citizens. Because the country does not offer a scheme for foreigners to become permanent residents, establishing citizenship or permanent residency is virtually impossible. If it did, it would necessitate the conversion of a Sunni Muslim. Moreover, Maldives is a go-to place for many travellers, in this way the government make tons of money from its tourism sector.

    Brunei

    Brunei is a small Asian country with large oil and natural gas deposits, which account for roughly half (60%) of its GDP. With its GDP rate, Brunei bestows free education and medical care to its citizens, although obtaining a permanent residency costs a lot more money than renting there. As a result, Brunei does not levy a social security tax on its residents, and individuals contribute 5% of their salaries to the state provident fund.

    Kuwait

    As we know Kuwait is one such country that has a high foreign currency rate is also one of the tax-free countries. This country’s government emphasises oil production, as it counts as a positive approach towards the Gross domestic product. individuals are not subject to any personal taxes, wealth taxes, or sales taxes in Kuwait, however international companies must pay specific fees to set up any corporation in the country.

    Cayman Islands

    The Cayman Islands, like Bermuda Island, are part of the British Overseas Territories. The government of the Cayman Islands makes money through tourism, which accounts for more than 70% of the country’s GDP. People in Cayman Island enjoy a  standard lifestyle since there are no direct taxes, property taxes, or payroll taxes, among other things.

    Nauru

    Nauru is one of the richest countries in the world, because of its abundant natural resource of phosphate. Aside from that, the government runs an Economic Citizenship Program in which citizens are required to pay a nominal fee, by this, the government could raise revenue from its citizens also.

    Saint Kitts and Nevis

    One of the regions in the West Indies, Saint Kitts and Nevis relives more on tourism and sugar production. Despite the loss of sugar production and shut down of many sugar factories, the country still withstand to have a standard of living and became one of the world’s countries with the highest debt-to-GDP ratios.

    Somalia

    Somalia is well-known for being a dangerous country due to the burden of civil conflict and territory, owing to its splintered government and political instability. Somalia earns money through livestock and telecommunications, as well as a 10% sales tax.

    Vanuatu

    Vanuatu, like India, derives its GDP from its agricultural industry, which employs roughly two-thirds of the people. Aside from fielding, Vanuatu’s economy is supported by offshore financial services, tourism, fishing, and other farming-related activities.

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    Conclusion

    People’s taxes are still one of the most essential resources that contribute to the proper operation of the government in many countries. Among such countries, these are the only ones that are tax-free.

    These countries earn money not only through customs charges, tax havens, and registration fees, but also from livestock, agriculture, fishing, investments, natural resource production, and a variety of other activities. Despite the fact that they are tax-free countries, the government allows their citizens to live a normal life.

    FAQs

    How do countries with no tax make money?

    Customs & Import Duties, Departure tax, and Corporate registration and renewal fees are some of the ways countries with no income tax make money.

    Which countries are tax-free?

    United Arab Emirates, Vanuatu, Kuwait, Maldives, Bahrain, Monaco, and Qatar are countries that have no income tax.

  • Why does South Dakota hold Half a Trillion Dollars Worth of Assets?

    South Dakota has been much in the news for its half a trillion dollars worth of assets in recent years. It is considered as the US next haven! Impressive, right? As per the FDIC’s bank statistics report, South Dakota ranked first with $3.13 trillion as of the commercial and saving bank assets, widely ahead of Ohio with $2.96 trillion.

    According to the South Dakota Department of Labour and Regulation, trust companies held around $175 billion in assets which was an increase of 45% from the last two years. These trust assets are utilised mainly for the rich people to safeguard their wealth for a longer duration. And in South Dakota, these trusts are growing with an exponential graph, mainly because of the country’s permissive trust laws.

    But the actual question that arrives here, is how does South Dakota hold such a massive amount of assets? Previously, in October, Pandora Papers (millions of financial records) got in the hands of journalists. Within which, the state data showed how South Dakota held half a billion dollars of assets in its trust.

    And that’s what we are discussing in this article in brief. So, let’s get started!

    Adoption of Key Laws by South Dakota
    U.S. Low levied Tax Rates
    South Dakota is a major spot for foreign assets
    Zero Income or Estate Tax over Trusts
    FAQ

    Adoption of Key Laws by South Dakota

    Nearly four decades ago, the state adopted a few of the key laws in its financial systems, which are: Eliminated cap on interest rates for lending and No expiry period on trust laws.

    This majorly drives the attention of the financial industry towards the state. The state has zero tax income which makes it one of the most popular spots for people who want to pass their assets to the future without any liability of estate taxes. Ever since then, South Dakota has been gaining huge clients.

    The Pandora papers revealed how the politicians and businessmen have been transferring their wealth into U.S. trusts funds, saving them from paying taxes or getting directly involved in any deals.

    U.S. Low levied Tax Rates

    “The U.S. is widely known as the world’s best place for dumping hot money,” said Heller. The main reason behind this is the no rule for reporting foreign assets to the respective countries for the investors.

    With the extremely smooth and lenient banking system of the United States, wealthy families and businessmen come here to gain the same level of privacy that they previously got from places like Switzerland.

    This makes the United States the second-ranked Tax haven in the world, as per the report of Tax Justice Network. And states like South Dakota and Nevada, are widely considered as the most attractive spot for people who dodge taxes.

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    South Dakota is a major spot for foreign assets

    Pandora papers have revealed many major facts regarding the assets and taxes in the U.S.A, among these, one was South Dakota being a tax shelter for wealthy families and businessmen. The state is considered the main attractive spot for foreign assets.

    The report revealed that South Dakota has over quadrupled to $360 billion in the past decades.

    The lawmakers of South Dakota have drafted the legislation by the trust industry insiders which gives them great protection and benefits over the trust funds to the trust customers all across the United States and foreign countries.

    The biggest flex for the rich people is the state’s ban on the “rule against perpetuities”. This builds a very safe space for the wealthy families to establish their dynasty trust and let it go on forever, without any burden of estate taxes.

    Trust Assets in South Dakota
    Trust Assets in South Dakota

    Zero Income or Estate Tax over Trusts

    Another biggest reason for wealthy families and business people to set up their trust in South Dakota is because of its extremely lenient tax rules. The state does not have any income or estate tax over the trusts. Yes, it’s very true!

    All the funds placed in the private trusts are not bound with any return of income tax by the state. South Dakota does not ask and collect the income generated through these trust funds, even if it’s in the count of billions.

    Alongside, the state does not ask for any estate tax, even after the death of the owner.

    The people of South Dakota’s law does not necessarily need to invest in any local trust in order to live in the states. Although the investors are lying around the states with billions of trusts funds, they do not directly contribute to any sales or estate tax revenues.

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    Conclusion

    Being one of the most attractive spots for wealthy families and business people, South Dakota is counted among the top tax havens in the United States. The people living in the state earn good benefits from the lenient trust laws of South Dakota.

    In fact, the state is expected to experience the biggest wealth transfer that ever occurred in the history of mankind. And because of this only, the trust companies in South Dakota have been growing the job market within the state over the past few years. South Dakota does benefit from its trust laws and so are the rich people living in the state.

    FAQ

    Are taxes high in South Dakota?

    No, South Dakota is one of the lowest tax state in United States.

    What states are considered tax havens?

    South Dakota and Nevada are considered as tax havens in United States.

    Is there income tax in South Dakota?

    No, South Dakota does not levy any income tax.

  • Top 7 Tax Saving Investments under Section 80C

    Tyro professionals are incipient every year, so the tax is levied as much a burden or responsibility to them. However, those fledgling employees/professionals become seasoned ones, someday and may see an uplift or augment in their income in the coming years, thus this will increase the burden as well as responsibility to pay high on income tax.

    As is the case, high incomes represent high tax levied on individual incomes and vice-versa. This will reflect a slow-down in the development of future plans of a person, when he/she is paying a high share of tax in the present. And, in such cases, when the taxpayer has paid a superfluous share or underpaying on the prescribed tax, is solicited to make sure to file a return.

    That’s where the Government of India introduced various Tax-saving investments to progress financial stable career paths in the future.

    Here are Top 7 Tax-saving investments you can invest in 2021:

    Bajaj Life Insurance Capital Guarantee Solution
    Bajaj Allianz Life Goal Assures
    Canara HSBC OBC Life Insurance investment 4G
    Edelweiss Tokio life Wealth secure plus
    Max life Online Saving plan
    HDFC Life Click2Wealth
    ICICI Prudential life signature
    FAQ

    As said, the future is uncertain, we don’t know what will happen the very next moment? In some cases, only the invested or saved amount of an investment lends as a helping hand in the forlorn situations in the future, despite getting a low rate of return on such investment. Similarly, business is uncertain in various factors such as market price, trends, capital value or profit etc.

    Bajaj Life Insurance Capital Guarantee Solution

    Bajaj Allianz has come up with its new scheme on tax-saving in 2021- the Bajaj Life insurance Capital Guarantee solution that aids individuals to earn a 100% high rate of return on the investment amount which is piqued to 16.3% in the market as of now. Besides, the schemes provide zero risks and no commission is charged on the invested amount.

    Eligibility: This policy/scheme is applicable to 18-65 years.

    Policy term: 20 years

    Benefits: Bajaj Life insurance Capital Guarantee solution bestows zero risk as well as commissions on the invested amount. The policyholder gets the benefit of partial withdrawals.

    This tax-saving plan allows the policyholder for multiple withdrawals and no tax levied under section 10 (10D). Therefore, inbuilt life covers a maximum of 12 lakhs throughout the policy term.

    Bajaj Allianz Life Goal Assures

    Health is wealth, as we see the reality of the ongoing pandemic really made many individuals enroll on the tax-saving scheme- Bajaj Allianz Life Goal assures. Moreover, we have loads of obligations to fulfil, from education to living under a safe roof and for all that we need a sturdy amount of money to acquire. Because of this, Bajaj Allianz Life Goal Assures provides financial support to individuals as well as his/her family throughout their lives in accomplishing their needs.

    Eligibility: This policy/scheme is applicable to 18-60 years.

    Policy term: 10-30 years

    Benefits: Bajaj Allianz Life Goal Assures offers special loyalty additions on augmenting maturity value at the time of every 5 years of the policy term and mortality charges which have been deducted in the policy term, will be added to the return fund at the time of maturity.

    The tax-saving scheme comes with zero commission as well as tolerating partial withdrawals. Apart from that, this scheme permits the policyholder for flexible transfer of different funds in order to maximise the return in various markets.

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    Canara HSBC OBC Life Insurance investment 4G

    This tax-saving scheme covers the demise of the policyholder or their beloved one in the family by supporting them financially. The sum assured is expected to be 105% of total premiums which will be received either at the time of maturity/death of the holder or take the fund amount in periodic instalments under the Settlement Options(SO).

    Eligibility: This policy/scheme is applicable to 18-65 years.

    Policy term: 10 – 30 Years

    Benefits: Canara HSBC OBC Life Insurance investment 4G benefits in providing loyalty additions and wealth booster during the policy term. Besides, this scheme offers flexible transfer of invested funds, partial withdrawals, tax exemption, Settlement Options are available to the holders in case to receive benefits on the maturity and Premium redirection is available if the policyholder wants to modify the allocation of future premium into one ULIP fund or more.

    Edelweiss Tokio life Wealth secure plus

    This tax scheme comes with a combo of insurance plan and investment plan, which is built to protect the wealth of an individual in the present as well as for future generations. The scheme gives 15 lakhs in 30 years if a premium of 8% per annum is paid.

    Eligibility: This policy/scheme is applicable to 1-55 years.

    Policy term: 10-20 years

    Benefits: the fund value will be received either at the time of maturity or death of the insured, not taxable, offers three additions- Loyalty addition at the 6th year of the policy term, Wealth booster addition and Maturity addition.

    Max life Online Saving plan

    Every individual chooses to join a savings insurance plan so that they and their family can get financial support in times of need. If you want to protect your dear ones the Max life online saving plan is what you are looking for.

    Eligibility: This policy/scheme is applicable to 18-60 years.

    Policy term: 5 years to the selected policy term for maturity.

    Benefits: In Max life, an online saving plan, the total premium paid till the date of death is 105%. The insured can also renounce during the policy term, the person will be funded the sum minus the charge from when they discontinued. Till the last days, the insured will receive the fund value.

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    HDFC Life Click2Wealth

    HDFC Life Click2Wealth is the same as other insurance that not only supports you but also your family. They give us many alternatives in which we can choose the best that suits us. No policy loans are available. The insured person’s family has benefited accordingly if the person dies. Grace periods are also available as per the plan.

    Eligibility: This policy/scheme is applicable to 18-75 years.

    Policy term: 10 to 40 years

    Benefits: The policy has maturity and death benefits. The fund will be growing even after the policyholder dies as per the premium waiver option. The Premium modes contain many options from which you can choose the best instalments. 1% of the annual premium is added to the fund value. They have 10 fund options. After 5 years, the policyholder can withdraw the money.

    ICICI Prudential life signature

    A unit-linked insurance plan that supports you to achieve your goals and protects your family. In a systematic plan, Withdrawals in Regular intervals are allowed to support your dreams. Monthly, half-yearly and annual are the three premium paying modes.

    Eligibility: This policy/scheme is applicable to 18-75 years.

    Policy term: 10 to 30 years

    Benefits: After the mature period, the policyholder can choose to withdraw the whole amount or choose a structured payout. The insured will receive the top fund value even if the policyholder dies with a minimum death benefit. The insured is exempt from tax for the premium amount as per section 80c and section 10D.

    Conclusion:

    Everyone wants to see their loved ones lead a happy and wealthy life, even if they are not present to witness or share the moments with them. Life is precarious, no one can guess what tomorrow will hold for us, so start planning, it’s never too late to start. If you are in search of a path that can help you to lead a financially secure life, then we suggest you seek assistance from any of the above-mentioned insurance companies.

    FAQ

    How to save tax in 2021?

    Life Insurance, ULIP’s, Mutual Funds, Tax Saving Fixed Deposit, SCSS or Senior Citizens Savings Scheme and Provident Fund are some of the ways you can save tax.

    What is Section 80c?

    Section 80C is one of the most popular section that allows taxpayers to reduce their taxable income by investing in various schemes.

    Is your savings account taxed?

    Yes, any interest on your savings account is taxable income.

  • Top 7 Unusual Tax Rules around the World

    Taxes have a very intriguing history around the globe! As we are well familiar with the fact that tax rules are essential for our country. Taxes are as certain as deaths. For the social welfare and development of any country, taxes are crucial and must be taken more promptly by its citizens. With such a serious entity of taxes, it’s quite surprising to know about those extremely unusual and weird taxes across the world. Did you know, some countries even charge taxes on prostitution? Weird, right?

    To sum up such weird and unusual tax rules across the globe, we have presented this article. Such unusual tax rules pass because of the sudden financial needs in order to fill up the gaps that occurred in budgets.

    Throughout the world’s history, numerous weird and unusual tax rules have been passed. Some fraction of these taxes were passed to generate additional revenue, whereas others were passed for social welfare purposes.

    Well, we can not turn down the tax rules due to the chances of arrests are pretty high. That’s why willingly or unwillingly, people do follow the tax rules and pay their fraction. Let’s begin with the most unusual tax rules around the globe.

    Germany: Tax deduction on Bribes
    Denmark: Cow Flatulence Tax
    Hungary: The Junk food Tax
    Britain: Films Tax Reduction
    Russia: Beard tax
    Canada: Cereal Toys Tax Reduction
    Ireland: Artist Tax Exemptions
    FAQ

    Germany: Tax deduction on Bribes

    According to German laws, bribery was legal in all sectors. This continued till 2002, after which various laws were passed and bribery became illegal. But, this isn’t the unusual part. Bribes were not only legal in Germany but it was also tax-deductible, published by Businessweek editorial of 1995.

    However, this wasn’t allowed when the briber or its recipient was involved in any kind of criminal offense or proceedings. On this note, bribery was restricted by the prosecution. This ended when Germany passed the public contracts of 20-30%. Germany made its proceedings of eliminating this tax deduction for bribery till 1999.

    Denmark: Cow Flatulence Tax

    A wide fraction of people believe the cause of greenhouse gasses is the black smoke coming from factories or the highway of Los Angeles but, Denmark holds a different perspective here! It believes the cause of greenhouse gases is cow gas.

    According to research and analysis, around 18% of Europe’s greenhouse gasses come from methane, released in cow gas because of the slow digestion of greens in the cow.

    To prevent the epidemic of greenhouse gas, caused by the cow fueled, several European countries passed tax charges on each cow. Thus, Denmark’s cows are worth $110.

    Hungary: The Junk Food Tax

    It’s quite shocking to know that some countries even charge taxes on packaged foods that are high in salt and sugar. Basically, on all junk foods. One such country is Hungary. This junk food tax is officially termed as ‘Public Health Product Tax‘, which adds up to around 20% more than the initial price.

    The government of Hungary basically prioritizes the healthy diet and assesses it to the citizens of having a better product choice. This results in around 59 to 73% of consumers eliminating junk foods from their lists.

    Britain: Films Tax Reduction

    Great Britain charges a distinct tax deduction to films that are based on British culture. Such films need to be registered to various authorities and would be rated according to their cultural content, practitioners, hubs, and contribution.

    Those films which are rated highly on the scale, get a tax reduction of 25 percent on the earnings generated by the films.

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    Russia: Beard tax

    It’s very unusual for Russia to introduce a beard tax. Well, it is true! In the times of Peter the Great who was known to be the most popular Czar of Russia. And he was the one who introduced the beard tax.

    Beard was the typical fare for a wide number of people in Chilly Russia. When Peter the Great visited Western Europe where he was intrigued by the barbarian culture and that’s when he decided to tax the bread. For keeping a beard, men had to give some token as in beard tax.

    Canada: Cereal Toys Tax Reduction

    One of the most fascinating things for a kid is to find the toy hidden in the cereal box. And Canada leaves no grounds to promote such packaging. That’s why it has provided tax breaks on cereal companies for putting a toy in the cereal box. This is unusual but at the same time, promotes kids’ welfare.

    Those cereal companies that hide a toy in their cereal box around our Northern Neighbor get a reduction on the extra tax.

    Ireland: Artist Tax Exemptions

    For artists, managing their economic status is quite tough and often leaves them starving. But in Ireland, artists from all categories including sculptures, writers, composers, and visual artists who sell their work are not compelled to pay the income tax.

    For getting such tax exemption, the artists have to file a lawsuit for their original work under the tax authorities of Ireland. They further check and provide the final statement on whether the work is original, valuable, and passes the cultural merits or not.

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    Conclusion

    The history of tax rules is quite intriguing as well as unusual. And still, such unusual taxes are available in many countries across the globe. In fact, in historical times taxes were charged on cooking oils or beards. Every country has its distinct tax rules based on the country’s requirements or culture. Through this article, we did our best in covering such unusual and weird tax rules across the globe.

    FAQ

    Which countries are tax-free?

    Bermuda, Monaco, the Bahamas, Andorra and the United Arab Emirates (UAE) are tax-free countries.

    What are examples of hidden taxes?

    taxes on cigarettes, alcohol, gambling, gasoline and hotel rooms are some of the examples of hidden taxes.

    What are some weird taxes around the world

    Cow Tax, Junk Food Tax and Tax on bribe are some of the weird taxes in history.

  • How to Withdraw EPF online with UAN

    As per Employee Provident Fund Act of 1952, Employee Provident Fund  (EPF) is a government instituted scheme where the employee and the employer contributes a certain amount of money to their accounts. This fund can be utilised post retirement or in case of emergencies like education, marriage, house maintenance etc.

    This mandatory savings cum retirement scheme requires employees of eligible organisations to pay 12% of their basic pay into Provident Fund every month. However, in the wake of the pandemic, this number was reduced from 12% to 10% for non government employees.

    The deposited money in EPF will earn interest on an annual basis. Upon meeting certain criteria, the employee can even withdraw the money prematurely.

    What is Universal Account Number (UAN)?
    How to withdraw EPF online?
    FAQ

    What is Universal Account Number (UAN)?

    Universal Account Number (UAN) is the key to all of your EPF related transactions. While you may have multiple EPF accounts as you change your organisation. Even then, the Universal Account Number will remain the same.

    Through UAN, you can bring all your EPF accounts under an umbrella and keep them safe. They have a unique lock and key to protect your deposits and ensure that only you have access to the account.

    UAN is a 12-digit number which is assigned by the Ministry of Labour and Employment and generated by the Employees Provident Fund Organisation (EPFO). As far as Indian companies are concerned your UAN will be printed on your salary slip right from the time they start to deduct money for the EPF.  

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    How to withdraw EPF online?

    Unlike before, you can withdraw your EPF online in case of any emergency or after retirement. While it may take a few days to get the amount credited to your account, it is still better than the offline hassle that you have to go through. You can choose whether you want to withdraw it partially or completely and proceed the application accordingly.

    Before Starting

    • Make sure that your Universal Account Number is activated and that your phone number linked to your UAN is functional.
    • Ensure that your UAN is linked with your pan card and Aadhar card.
    • Keep ready your bank account details along with IFSC code.

    Applying to Withdraw EPF online

    • Go to the EPFO e-SEWA portal. Login to the website using your UAN and password. If at all you forgot your password, you will have an option to reset it.
    • Click the ‘manage’ tab, go to ‘KYC’ option and verify if your details such as Aadhar card, pan card etc. are verified correctly.
    • Go to ‘Online Claims Section’ and click on ‘Claim (Form-31, 19 & 10C)’ from the drop down menu.
    • When the Claim screen appears, verify the details once again and enter the last four digits of your bank account number. And click on ‘verify’
    • Click ‘yes’ to accept the terms and conditions and sign the certificate of undertaking.
    • You can then proceed to click on ‘Proceed to Online Claim’.
    • In the online claim you will see a set of options under the menu ‘I want to Apply For’. Click on your required option like full EPF withdrawal, EPF part withdrawal etc. Only the options for which you are eligible will be shown.
    • Depending on the option you choose, you will have to enter your complete address, purpose of such advance etc. In case you have selected the ‘Advance Claim’ option, you might have to provide cheque book details along. This varies for various options.
    • Do upload the requested scanned document as necessary.
    • After accepting the subsequent terms and conditions, request for the OTP.
    • After you enter OTP, your application will automatically be submitted.
    • The amount will be credited only after your employer approves your request. After that it will take upto 20 days to credit the amount to your account.
    • After submission, you can also track the status of your application by logging into your account through EPFO e-SEWA portal.

    Conclusion

    Today, many people depend on EPF to fund their emergency requirements rather than depending on loans. These days, many non-government firms are providing provisions for EPF. The government is also taking initiatives to bring in a maximum number of people under the protection of EPF.

    FAQ

    Can I withdraw my PF without resigning?

    No, Full withdrawal of EPF is not permitted before the retirement

    Can I withdraw full PF amount?

    No, you can withdraw 75 percent of provident fund balance if you remain unemployed for 1 month.

  • What are the Latest Tax Exemptions by the Government for Covid-19 treatment?

    The Covid-19 had affected a lot of families in India and has also wiped out a lot of wealth of many individuals and left many others unemployed. In order to provide a relief to the tax payers, the Income Tax Department of the country has announced certain tax benefits and reliefs for the taxpayers. In this article let’s look at some of the important announcements.

    Tax Exemptions – Latest News
    Tax Exemptions for Employees
    Tax Exemption on Ex – gratia payment
    Deadline extended by the Government
    FAQ

    Tax Exemptions – Latest News

    Anurag Thakur who is the Minister of state in the finance ministry had confirmed about the tax exemptions and the development regarding it. He conveyed that the amount paid by an employer to an employee or any other person for the treatment of Covid-19 for the year 2019-20 and the subsequent years will not be taxed.

    The Finance Ministry had released a report in detail about the information. As per the reports, any amount spent by anybody for the treatment of the employee or someone else would-be tax free. In simple terms, the person who has paid for the treatment and the beneficiary who has received the payment will be exempted from tax.

    Tax Exemptions for Employees

    The Government has announced exemptions on the tax that is received by employees from their employer or any other person for the treatment of Covid-19. The Government has stated that many employees and individuals have received help from their employers and other well-wishers to meet the expenses of their Covid treatment.

    The Press release has conveyed that in order to make sure that an individual would not have any liability on the income tax payment that arises on this account, the Government has decided to provide exemptions for the employees or the individuals or the tax payer for the amount received by their employers or well wishers for the payment of the expenses caused for the medical treatment of Covid-19 in the FY 2019-20 and the subsequent years.

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    Tax Exemption on Ex – gratia payment

    The Government has also conveyed that there won’t be any tax on the ex – gratia payment that is received by the family member of the deceased employee due to Covid-19. The Government has conveyed that there wouldn’t be any tax charged on the amount that an individual has received as a help from the family, friends or relatives due to Covid-19. The amount exempted from the tax would be up to INR 10 lakhs.

    This is considered to be one of the most important relief and a much needed one that is bought in by the Income Tax Department. The taxpayers have faced a lot of difficulties whenever they were hospitalized or under the treatment and the medical expenses for the Covid-19 had turned to be costlier for a lot of people.

    The exemption for the amount received for the medical treatment would provide some relief for the taxpayers and their families as well. It is considered that the families who have lost a member would get benefited by providing exemptions on the ex – gratia amount received by them.

    Deadline extended by the Government

    The Government has extended the deadline for linking PAN cards and Aadhar cards to 30 September 2021 from 30 June 2021 as many people were facing troubles in linking the PAN with Aadhar cards. The deadline for making payment under the Vivad Se Vishwas Scheme has also been extended till 31 August 2021.

    The deadline for the Tax Compliance for the deadline for saving Capital Gains tax has also been extended to 30 September 2021.

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    Conclusion

    The move from the Income Tax Department of the country would help a lot of families and taxpayers to come out of the financial crisis they are currently facing due to the pandemic and this would provide a relief for them.

    FAQ

    What is exemption in income tax?

    Tax exemption is the monetary exclusion that reduces the taxable income which include exemption of charitable organizations from property taxes and income taxes, veterans.

    Who are tax exempted for Covid-19 treatment?

    The government stated that tax exemption will be presented to the amount received for medical treatment from the employer or the third party for treatment of Covid-19.

    What is the limit to the tax exemption provided for Covid-19?

    The exemption shall be limited to Rs 10 lakh in aggregate for the amount received from any other persons for Covid-19.

  • What is G7 Corporate Tax Deal and How will it Benefit India?

    There were a lot of articles and discussions about the tax evasions done by the big tech companies, which include Amazon, Google, Facebook, Netflix, etc. The companies have said to be paid very little amount in tax as they use tax havens and shift their operational region to avoid huge tax which should be paid to certain countries. The G7 summit has introduced a new tax system. Let’s look at the new tax system and how it would benefit India

    Corporate Tax deal – Latest News
    Countries that have agreed to the Corporate Tax Deal
    G7 Corporate Tax Deal Proposal
    How will India benefit from the tax deal?
    FAQ

    Corporate Tax deal – Latest News

    The group of 7 countries that are commonly known as G7 countries has decided on implementing the historical tax system on the global tech and multinational companies which will be a global tax. This proposal and decision are made with the aim to reduce the tax evasions conducted by the companies where they generally shift their operation base to the regions with a lower tax rate.

    Countries that have agreed to the Corporate Tax Deal

    The deal is likely to be put forth in the G20 summit, which is going to be held in July 2021. As of now, a total of 7 countries agreed that includes Canada, Germany, France, Japan, Italy, the United Kingdom and the United States.

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    G7 Corporate Tax Deal Proposal

    The proposal contained of 3 major decisions that were taken during the meeting.

    1. The companies or the multinational corporations will be forced to pay taxes on the profit they earn overseas.
    2. A minimum corporate tax of around 15% will be imposed on the multinational corporations on a global basis.
    3. The countries can share taxes on the profit earned by the companies or multinational corporations in a specific country through digital sales where the company has not got a physical presence.

    The G7 finance ministers and the Central bank governors conveyed that they will be committed to reaching an equitable solution on the allocation of taxing rights, the market countries will have to agree to share at least a taxation of 20% on the profits earned by the multinational corporations.

    They also conveyed that they would provide a proper coordination in applying the new tax rules and to remove the digital service taxes and other similar taxes that are levied on the corporations. They further added that they were looking forward to getting into an agreement with regards to the corporate tax in the G20 summit held in July 2021.

    How will India benefit from the tax deal?

    In the year 2019 the Finance Minister of India, Nirmala Sitharaman had cut down the corporate tax rates for the Indian based companies to 22 % and for the new Indian based manufacturing companies to 15 %. This would add an advantage as the bilateral tax agreements between the countries are also around a similar range.

    Since the tax rate in India is around 15 %, which is similar to the tax rate announced in the G7 summit, the country will not have to increase its tax rates. This would be a positive approach as India will be able to attract a lot of investments into the country. Furthermore, the existing tax havens may become unattractive and we can see a lot of investments coming into India.

    The decision of the countries in taxing the multinational corporations that have a significant sale in the country without a physical presence will let India tax a lot of corporations that earn a huge amount of money through digital sales alone.

    Amit Maheshwari who is a Tax Partner at the consulting firm AKM Global has conveyed that India would be able to benefit a lot from the newly proposed corporate tax as they are a big market for the huge tech companies.

    However, it is to be noted that as part of the agreement India will have to stop collecting the Digital service tax that it has levied on the companies such as Amazon and Google. India levies a Digital Service Tax of around 2 % on the revenues generated in India through the digital services offered by these companies. This includes digital platform services, data-related services and digital sales.

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    Conclusion

    India is expected to gain a lot from the new corporate tax discussed and approved in the G7 summit but tax havens such as Ireland, Netherlands, Luxemburg, Hong Kong and the Cayman Islands are going to face the consequences of the deal.

    FAQ

    What is G7 tax deal?

    The Group of Seven or G7 countries have agreed on a tax deal to impose a global tax on multinational corporations. The proposal is aimed at reducing tax evasion committed by large multinational corporations that often shift their base of operations to regions with lower tax rates.

    Which countries come under G7?

    The seven G7 countries are Canada, France, Germany, Italy, Japan, the UK and the US.

    Why was G7 tax deal proposed?

    G7 corporate tax deal was proposed to reduce tax evasion committed by large multinational corporations that often shift their base of operations to regions with lower tax rates.

  • Everything You Need to Know about ITR E-filing 2.0 – New ITR Filing Website

    The Income Tax Department of India has launched a new website that would help in the e-filing of tax returns. The new website has been updated with a lot of exciting features. Let’s look at these features, and all the other details of the new website launched by the Income Tax Department.

    ITR E-filing website – Latest News
    New Features of the ITR Filing Website
    New Tax Payment System
    Announcement of the New ITR Filing Portal
    FAQ

    ITR E-filing website – Latest News

    The new e-filing website was launched by the Income tax Department on 7 June 2021. This website packs in several interesting features and details that are expected to make the Income Tax returns process more smoother and faster.

    The website can be accessed at www.incometax.gov.in

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    New Features of the ITR Filing Website

    The website that has been launched recently, has been updated with numerous brand new features. One of the major updates is that the website will let you pay the online tax payment through multiple payment options, which include UPI, net banking, credit card, RTGS, or NEFT. This can be paid through any account from any bank of the taxpayer and this feature will make the payment process much easier.

    On 5 June 2021, the Ministry of Finance had issued a press statement that contained the list of new features and the changes that were being adapted on the new website which was going to be launched.

    • The new taxpayer portal is integrated with an immediate processing of Income Tax Returns which will help in issuing quick refunds to the taxpayers.
    • In order to make the follow up action easier, all the pending payments and uploads will be available on a single dashboard for the tax payers.
    • A free of cost software for preparing the Income Tax Returns will be available for the taxpayers with interactive questions to help the taxpayers in the ITR filing. The facility for preparation of ITRs 1 and 4 is available online and offline, ITR 2 is available offline for the beginning stage and the preparation for 3,5,6,7 is expected to be available soon.
    • The taxpayers will have an option to proactively update their profile by providing certain details of income which include the house property, salary, business or profession, which will be used in the pre-filing of the Income Tax Returns.
    • The detailed pre-filling of salary income, interest, dividend and capital gains is expected to be enabled and will be available only after the TDS and SFT statements are uploaded and the due date for the upload is 30 June 2021.
    • A new call center will be set for the assistance of the taxpayers to respond to their queries immediately. There will also be a provision of FAQs, User Manuals, chatbots, live agents and also videos.
    • There will also be the availability of functionalities for filing Income Tax Forms, submit responses to Notices in Faceless Scrutiny or appeals and to add tax professionals.
    New ITR filing website
    New ITR filing website

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    New Tax Payment System

    The New Tax Payment system is announced to be launched on 18 June 2021, which is after the due date of the Advance Tax installment. This will avoid any inconvenience for the taxpayers. The ministry has also announced that they will be releasing a mobile application subsequent to the launch of the new portal in order to help the taxpayers get used to the new features.

    Announcement of the New ITR Filing Portal

    The Income Tax Department had announced about the new portal to all the existing tax payers by sending a text message to their registered numbers. The message conveyed the news of the launch of the new e-filing portal along with the the date of launch, 7 June, 2021, and the link of the new portal.

    Conclusion

    The existing portal that is the older version was not available for the taxpayers for 6 days from 1 June 2021 to 6 June 2021 ahead of the launch of the new portal. The Central Board of Direct Taxes had asked all the taxpayers to complete all their tasks before the 1st of June in order to avoid any difficulty during that period.

    FAQ

    Is Income tax new site launched?

    Yes, the new  ITR filing website is launched and you can visit it on www.incometax.gov.in.

    What is the new Income tax portal?

    The new income tax portal is integrated with immediate processing of Income Tax Returns (ITRs) to issue quick refunds to taxpayers, and all interactions and uploads or pending actions will be displayed on a single dashboard

    What is e-filing portal?

    The e-filing portal is used by taxpayers to file their income tax returns (ITRs) and also to raise complaints seeking refunds.