Taxation Services in India

Introduction

The Central government is responsible for levying taxes in India.  The Constitution of India gives Central and State Government the authority to levy tax. Article 265 of the Indian Constitution is an important restriction on this power. It states that “No Tax” shall be collected or levied except by the authority of law. Each collected or levied tax is backed by a law known as an accompanying law, which is passed either by Parliament or by the State legislature.

Scheme of taxation established by the Constitution

Distribution of the legislative powers is given in Article 246 of the Indian Constitution, including taxation between State Legislature and the Parliament of India. List of issues enumerated in Schedule VII is as follows:

•    List - I: Areas  under which only the Parliament is competent to make laws.
•    List - II: Areas under which only the State Legislature is competent to make laws.
•    List - III: Areas on which laws can be accomplished by both, Parliament as well as the State Legislature.

Income Tax Department

The Income Tax Department works under the Ministry of Finance (Department of Revenue). It is responsible for various Taxation services India and Acts of direct taxation passed by Parliament.

•    Wealth Tax Act
•    Income Tax Act
•    Gift Tax Act
•    Interest Tax Act
•    Expenditure Tax Act
•    Various Finance Act

Central Board of Direct Taxes

It is a part of the Ministry of Finance and provides essential inputs in planning and policy formulation regarding direct taxes. It is also responsible for direct tax administration under the Central Board of Revenue. Initially, it was responsible for direct as well as indirect taxes before the board was split into two, namely the Central board of Excise and Customs, and the Central Board of Direct Taxes. Members of the Central Board of Direct Taxes are selected from the Indian Revenue Service (IRS), whose members constitute the topmost management of the Income Tax Department.

Service Tax

Service Tax is levied by the Central Government of India. There are many Service Tax Providers India giving you access to professional and affordable services. The rate of service tax is going up this year, as from the 1st June 2015. The Service Tax is consolidated as the secondary higher education cess and as education cess.

Conclusion

Taxation in India is provided for under various taxation laws. Although the laws are clear, the territory can be daunting for a layman. This is why there are several professional and experienced taxation service providers to take care of your requirements and give you the best advice. they can also help you resolve any disagreements and discrepancies.

Read More »

Managing Brands For Success: The Basics

In economics, luxury brands are those brands whose demand increases proportionally as incomes rise. They can also be defined as being the contrast to  "necessity goods": demand increases less in proportion to income.  Luxury brands constitute the majority of luxury products. The term 'luxury brand' is synonymous with high prices, luxury, and high quality. They are often referred to as Veblen or Superior goods. The expenditure towards advertisement for the average luxury brand is about 5-15 percent of sales revenue. This rises to about 25 percent with the inclusion of other communication expenses for efforts such as public relations, sponsorships and promotional events.

Market Characteristics

Luxury brands in India are said to have high income elasticity of demand. This is because as people become wealthier, they purchase more luxury goods. A decrease in incomes will also see a proportionate drop in demand. The elasticity is not constant at all levels, and some changes may occur at different levels of income. With time, a luxury good may become an inferior good or a normal good, depending on income levels. Luxury products are Veblen goods, with negative price elasticity of demand, for example; making an expensive perfume can increase its perceived value to such an extent that, as a luxury good, sales can go high enough, rather than down.

Market Trends

The three common trends in the global luxury goods market are consolidation, globalization and diversification. Consolidation is used to define the involvement of the ownership of brands and growth of big companies across multiple segments of luxury products. Globalization is a result of an increase in availability of these goods, tourism and additional luxury brands. Some examples include Armani, Burberry and L’Oreal, which dominate the market in areas ranging from luxury fashion to cosmetics. Leading global consumer companies also attract industry, to avail profits in the consumer goods market.

Certain brands are considered to be premium brands in India, as people believe they are of a high quality and worth every Rupee. The big question is why people are willing to pay a high price for a product when there are cheaper alternatives? There are specific tangible and intangible attributes that give this class of products such a  status:

Sensual: They arouse the senses and make people feel indulgent.

Rare: They represent an uncommon choice and draw attention.

Confident: They boost the customer's confidence level.

Quality: They are consistent and attract obsessive attention.

Conclusion 

Managing a brand is the most difficult challenge in the field of marketing. Like any other business, brands must also pursue and seek growth strategies. Unlike many businesses, brands must present themselves in such a way that their images don't dilute customers' sense of pride and exclusivity. Some strategies are off-limits in this pursuit. Brand managers must know when it is best for the brand to ignore short-term opportunities and how to brush-up the brand's long-term health.

Read More »

Understanding the Different Family Office Templates

Initially set up by the ultra-wealthy families such as the Fricks, Vanderbilts and Rockefellers, the concept of family offices has moved on this side of the globe as well to associate itself with giant names such as the Bajajs, Munjals, Premji, Wadia, and Ambani, among others in India. After all, the need for family offices in India is growing at a rapid pace with the proliferating number of HNWIs or High-net-worth individuals. The modus operandi of a family office, however, depends largely on your level of wealth, types of assets, and goals. This categories their functioning into three templates.

Administrative Family Office

This model involves managing the advisory and investment management services through the help of external service providers hired as contracts, however, it provides some level of tax, bookkeeping and other administrative services through its direct employed staff, who, usually, work on a part time basis. An administrative family office is often used by wealthy families that have an asset base of Rs. 5 crore and above.

Hybrid Family Office

Under the hybrid family office model, strategic functions, more often than not, run parallel to the objectives of the family and consequently they are managed in-house. To meet the long-term investment goals of the family, therefore, certain families allocate family members to manage specific strategic activities. This is especially the case when the member has an expertise in wealth management and privacy is a big concern. Though, certain investment decisions under this wealth management model may be taken in-house, the office outsources experts for tax, asset allocation and legal matters.

Comprehensive Family Office

This model is best for families who need control, security and privacy of the highest degree when managing their wealth. Given this, all administrative services and legal, tax, risk and core management works are managed by the in-house members of such family offices, though, it may outsource specialized investment management activities such as venture capital, market investments, hedge fund, private equity, etc. The outsourcing of such services, however, depends on the family’s budget, objectives, and other elements.

Conclusion

The job of a family office is not limited to protection and passing on of the multiplying wealth of a family to its heirs. Beyond the strategic functions that entail managing investment portfolio, taxes, and insurance also lie the responsibility to showcase the philanthropic deeds of the clients. Family office services offered by professional companies, therefore, usually, cover everything from private wealth management, estate planning, administrative, tax and philanthropy services.

Read More »

Why Estate Planning is Essential for you

Estate planning is meant to assist you in managing your estate. Effective estate planning is imperative in order to avoid property discords and disputes. Getting into such disputes will only drain your financial resources and time. However, Estate planning is still not a very popular concept and ranks low in investors’ priority list.

You may, like many other investors, think that estate planning is something that you do not need. Some of the reasons behind this belief are:
 

• You may think that estate planning is only for the rich and elite. However, estate planning is a very broad concept and encompasses various issues including end-of-life medical care, general private affairs, asset management, etc. Hence, this activity effectively helps you in planning for the above mentioned important aspects.
• You may think that your finances are quite simple to handle and manage. However, exigencies never come invited. By charting out an effective estate management plan, you ensure that such unforeseen situations do not adversely affect your loved ones.
• Do you have a habit of procrastinating your estate planning activities? The most probable reason behind this may be your gut feeling that the opportune time has not arrived. However, estate planning will help you to safeguard the interests of your loved ones in case you become disabled or are not in a position to take decisions. Hence, it is advised that you start planning early.
• While planning for the physical properties you always commit the mistake of forgetting about the digital properties. Remember there are various important accounts and documents that are password protected. You can ensure proper management of these accounts by authorizing the agent to do the same (in case you are no longer capable of doing so). 
• Exigencies are a part and parcel of everyone’s life. Being optimistic is a good thing, but thinking that you will never face contingencies is unrealistic; you may be in for a rude shock. A detailed estate plan will help you in ensuring that your spouse and children do not have to get into legal hassles in order to prove their ownership. There are various other issues too on which you would be required to take a final call. Some of these issues include deciding a property manager or setting aside an amount to take care of your medical bills.

There is a high possibility that you might have not started thinking about your trustee. This is a mistake most people commit. The trustee will be entrusted with the job of managing your wealth. Hence, it is imperative that you name the most trusted of your aides to perform this activity.

Do you still think that estate planning is not that significant? Think again! Inefficient planning can give rise to conflicts.

Given the importance of this activity, it is imperative that you get in touch with your provider today. You can also contact different Private Banking Organizations in India, many of which are experts at offering estate management services.

Read More »

Managing Wealth with Family Offices in India

Did you know how many Indians were there in the Forbes top 100 billionaire’s 2014 real time ranking list? There were 4 names including those of Mukesh Ambani, Dilip Sanghvi, Laxmi Mittal and Azim Premji in the top 100.In fact, Ambani presently holds the 27th position in the list which means that he has also made it to the top 50 billionaires globally.

We all know that gaining wealth is tough but after accumulating such wealth the toughest job is to maintain it. As the value of money will only decrease it is important to invest wisely. For maintaining your wealth and increase it with time, it is necessary that proper investments are made by the professional wealth services. This is how people with appropriate investment can reap profits while increasing their bank balance. It is important to note that the professionals can provide all the information you require for increasing your wealth over a period of time.

India has the fastest rate of minting millionaires, which makes it a perfect place for wealth managers. It is true that the in the past billionaires were reluctant to take professional help, but now with the young generation of billionaires, the concept is getting a warm welcome. In fact, in a research conducted by Indian rating agency Crisil, it is said that the 62,000 households of India, with an income of 5 million dollars will reach 219,000 by 2015.

Basically, a family office or a single family office is a private company that helps wealthy families in managing their assets and investments. A U.S. based research firm, Cerulli Associates have managed assets worth $3 trillion and more worldwide. It has also stated that international banks and institutions like UBS, Morgan Stanley, Bank of America Merrill Lynch have assets worth $350 billion.

However, in India, Wealth management organizations are at its nascent stage and it has been predicted that by 2015 there will be more than 940 offices. Previously, the old billionaires were not comfortable sharing information with anyone about family wealth. This trend has led a lot of them starting their own offices rather than going to private banks or wealth management service providers. Azim Premji, (Chairman of Wipro India’s third largest IT Company) has an in-house family office, PremjiInvest, worth $1 Billion of personal wealth.

The concept of family offices in india holds huge potential, however, till now only 20% of it has been penetrated according to Markets and Markets, a full market research company and consulting firm. Therefore, if you’re searching for such services, it is worth doing some research. The smart way is to go online and look for leading wealth management service providers. You’ll find a range of websites that provide such services. You can then select one as per your requirements. It is best to contact professional wealth management companies for quality services. Contact them now!

Read More »