Tax Rates:
Increase the limit by Rs 10,000. So exemptions for different classes are
- Tax free upto Rs 1,45,000 for Women
- Tax Free upto Rs 1,95,000 for Senior Citizen
- Tax free s 1,10,000 upto for rest of Individuals and HUF .
- Education Cess increased from 2% to 3%.
- Surcharge 10% if income exceeds Rs 10,00,000.
Salary
Explanation inserted to diffuse the impact of the judicial ruling by which there must be a positive finding that there indeed was concession in rent granted to an employee. Now , such concession is being taxed by making the computation of such perquisite clearly laid down in the I T Act.
Business Income
Expenditure in cash exceeding Rs 20,000 will now cost you 100% dis allowance.Previously it was only 20%[section 40A(3)]
Capital gains
- A ceiling of Rs 50,00,000 has been put for investment in Bonds for exemption u/s 54EC.
- All kinds of Art be it Archaeological collections,Paintings,Sculpture etc are now Capital Asset, thus gain on sale is liable to Capital Gains Tax.
Deduction
- Deduction u/s 80CCD is now allowed even to employees other than central government.
- Deduction u/s 80D for premium on mediclaim now increased to Rs 15,000 for all except Senior Citizen in whose case premium allowed deduction has been increased to Rs 20,000.
- Interest on education loan is now deductible u/s 80E even in case of parents or spouse who taks loan for their children or spouse.
- Deduction u/s 80IA is applicable only in case of developer and not in case of works contractor.
- Time limit to start industrial undertaking extended to 1/4/2012 for claiming deduction u/s 80IB
- Deduction of 100% profit u/s 80IC/ID for hotels and convention center which starts operating between 1/4/2007 to 31/3/2010 .The exemption is for 5 assessment years.
Dividend
Companies have to pay dividend distribution tax @ 15 % for equities and mututal fund will have to pay tax on money market and liquid fund’s dividend @ 25%.
Minimum Alternate Tax
The companies enjoying 100% exemption of tax u/s 10A and 10B are now liable to tax as per MAT provision.
Fringe Benefit Tax
Stock Option was taxable only at the time of sale ,if the same was issued as per ESOS/ESOP guidelines.Since, the long term capital gains are tax free if traded through stock exchange, there was virtually no tax in almost all cases .However, now companies will have to pay FBT on the value of ESOP.
Tax Deducted At Source
- The rates of TDS on rent u/s 194I has been changed to 10%.
- The rates of TDS on Brokerage & Commission has been increased to 10%.
- The rates of TDS on Profession services raised to 10%.
- Interest on 8% RBI Taxable Bonds now subject to TDS.
- No TDS on interest from Bank and Post Office.
Banking Transaction Tax
Limit on which no BTT is imposed is increased to Rs 50000.
Settlement Commission
- No application if additional tax related disclosure is below Rs 30000.
- Application can be made only if the proceeding s pending before Assessing officer.
- Tax to be paid along with application.
- Settlement Commission has to pass the order accepting or rejecting the application with 14 days from the filing of application.if not passed,the application shall deemed to be admitted.
Stay Of Demand
The Tribunal , now can extend the stay on demand collection upto 365 days.After which , stay will automatically vacate.
About taxworry
It is mentioned that under TDS, the rate has been reduced to 10%. But only TDS on rent of machinery and equipment was reduced to 10%. TDS on other rents u/s 194I remain at 15%/20%.