Unit - 39 : Tax Laws The Banks and Financial Institutions are Required to implement the provisions of the tax laws by deducting taxes at source , crediting the tax deducted at source to the income tax authorities and also have regard to the provisions relating to service tax , etc , in their day to day operations .
The Law Relating to Taxation of income is governed by Income Tax Act , 1961.
As a business entity, banks are need to comply with various tax laws . Income is computed under separate heads and the gross total income is calculated .
Taxable Income is arrived at after deduction allowable Under Chapter VIA.
Tax is deductible at source at the specified rates on making certain types of payment . There are separate compliance requirement in respect of TDS.
Service Tax is payable on various services rendered by banks and which are mainly covered under Banking and Financial Services .
However compliance may be required to be made through separate registration of other services .
CENVAT Credit is available on service tax payable on the basis of service tax on input services .