Increased Service Tax from
1st June 2015
From starting 1st June 2015, the service
tax rate has been increased from 12.36% to 14%. Service tax is levied by the
central government on certain services. It is paid by the end user. Eating out,
travelling and mobile bill will also get costly now onwards. In financial
services mutual fund distribution service has been came under the ambit of this
tax this time.
At present we are paying the service tax
on our insurance premium and distributor also pay the service tax on received commission
by selling the insurance product. In banking space, various fees and charges
linked to saving account, term deposit and debit or credit card attract service
tax. Bank FD interest does not come under this tax. The interest of home loans
and personal loans do not charge service tax but the processing fee and late
payment fee attract service tax.
The increased tax will also affect your
share trading bill. The brokerage levied on your buying and selling shares are
also attract the service tax and from today the new rate would be applied. Mutual
fund adviser and distributor will pay now service tax on their commissions received
by selling mutual funds. The mutual fund AMC also pay the service tax on
management fee.
Service tax on the mutual fund
distributor will also impact the business of mutual fund badly and the new IFA
get affected by imposing this tax.
If you have doubt about investment
product and want more information regarding investment or you need investment
services, feel free to ask us. We also conduct the seminar on investment and
financial planning. If you are interested for conducting seminar in your city,
just drop the mail.
Warm regards,
Arvind Trivedi
Certified Financial Planner
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