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Excise, Customs and Service Tax > Tax on Foreign Exchange trading

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  • Roopalakshmi Balasubramaniam
  • Joined:16-03-2011
  • Posts:20
  • Location:Coimbatore
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Posted: 01-04-2011

The service tax on the foreign exchange trading and operation get to be deduced to Rs.50000. Creating a wave of happiness amongst foreign exchange traders this is enjoyably inviting. If not into actions things may change into higher service taxes on the FOREX area however the announcement is finally made…

The taxes for the FOREX are basically manipulated upon the money got from the transaction with a 0.1% of gross amount of currency exchanged… The amount can range until 1 lakh and the minimal tax should be around Rs.25…If it is a 10 lakh then the tax must amount to Rs.100 with a 0.5 % Gross amount exchanged…

If transactions go above 10 lakhs , then the tax should be Rs. 550 for 0.01% of currency exchange…. However the maximum service tax here should go to just Rs.5000…

In the past banks levied a 12.36 % on the FOREX transactions where the service fee would be around Rs.100 totally amounting to Rs.112.36 for each transaction….

As of now things are not the same….. The budget changed the rules with different rules applied…

The Government now has announced two ways to calculate the service tax to foreign exchange transactions… In the first procedure, the service tax that is calculated would be from 0.1% of the gross amount exchanged…. The second parametric method would be that service tax must result from 1% percent difference of the trading rate and the RBI reference rate of the current day with all parameters included for calculation…

There are mixed opinions resulting to this situation… Nevertheless things have to go on a smoother way to ensure that the service tax does come down sensibly…

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