Mumbai Tax will include income tax, commercial taxes, and excise duty. Commercial taxes are expenditure taxes which include sales tax, road tax, and surcharge. These taxes are collected by the Maharashtra State Government. Income tax is collected by the Central Government. Excise duties are manufacturing taxes levied by either or both the central and state governments. Other taxes in Mumbai include property tax, wealth tax, and Mumbai municipal tax.
Direct hit - Mumbai Income tax
Mumbai Income tax is a direct tax levied on the income of individuals. For salaried individuals this tax is deducted at source, which implies that the tax is deducted before the actual salary reaches the employee. Professionals need to pay their income tax, and subsequently file their income tax return within March.
Income tax is calculated on the annual income for the period 1st April to 31st March and is usually collected twice a year in September and March. The tax rate differs according to annual income slabs. These slabs are as hereunder:
Income tax is NIL Up to Rs. 1,10,000/-; up to Rs. 1,45,000/- for women; and up to Rs. 1,95,000/- for resident individuals of equal to or more than 65 years of age.
Income tax is 10% for annual salaries between Rs. 1,10,000/- and Rs. 1,50,000/-
Income tax is 20% for yearly income of Rs. 1,50,001/- to Rs. 2,50,000/-.
Income tax is 30% for individuals earning between Rs. 2,50,001/- and Rs.10,00,000/- a year
For annual incomes of Rs.10,00,001 and above, an additional surcharge of 10% is charged on the incremental amount above Rs.10,00,000, along with the usual 30% of the yearly income.
An education cess @3% of the annual income is collectible by the income tax authorities.
Mumbai region for the financial year 1st Apr'03 - 31st Mar'04 collected Rs.36,198 crores as direct taxes, which roughly
accounted for 35% of the total India figure.
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The Indirect Hit - Mumbai Commercial Taxes
Commercial tax better known as sales tax is an indirect form of taxation charged by the state government . Economically it is an expenditure tax, since it is applicable on purchasing any good or service. The sales tax rate varies from one commodity to another, and also differs with the various services. The following is a selected list of items along with the corresponding sales tax rates:
- Precious metals like gold, silver, Rhodium, Platinum, Palladium, Ruthenium, Osmium and their articles are charged 1% .
- Precious stones including diamonds and pearls are charged 1% commercial tax.
- Agricultural equipments except tractors, trailers, pumps, electric motors, pump sets, pipes, oil engines, and capacitors are charged @4%
- Electronic communication systems including PBX and EPABX attract a sales tax of 4%
- All yarn varieties except cotton and silk are charged @ 4%
- Bamboo, bidi leaves, cycle rickshaws, bicycles, tricycles, bearings, beltings, bulk drugs all attract a commercial tax of 4%.
- Paddy, rice, wheat and pulses in whole grain, broken or split form are charged a sales tax of 4%
- Cotton in its raw stage either imported or indigenous is charged 4% sales tax.
- All types of formulation drugs be it Spirituous, Unani, Ayurvedic, Siddha, or Homeopathic are charged @4%
- Drawing books, exercise books, graph books, and laboratory copies are chargeable @4%.
- Pressure cookers, buckets of plastic, iron, steel or aluminum attract a commercial tax of 4%.
Mumbai taxes also include municipal taxes, wealth taxes, and property taxes. Manufacturers are also subject to excise duties being charged by the Maharashtra State Government, Central government or both.
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