State Governments are now free to levy VAT on Sugar and Textiles

0 comments Friday, May 13, 2011
The Union government has allowed the states to impose tax on sugar and textiles for the first time in 54 years.
In  the finance Act of 2011 the Additional Duties of Excise (goods of special importance) Act, 1957 has been amended.  Sugar and textile have been removed from the first schedule of the said Act.

After this amendment, states are free to levy value added tax on sugar and textile.These commodities  were put under the scheduled commodities, with the enactment of the Additional Duties of Excise Act in 1957 by the Nehru government.

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Tax planning by conversion of stock in trade into capital asset

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When a capital asset is converted into stock in trade then capital gain u/s 45(2) of Income Tax Act arises in the year of sale and not in the year of conversion. But in vice versa situation i.e conversion of stock in trade into capital asset there doesnot arise any capital gain.

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