Budget,2010 Incometax

8/14/2019 Budget,2010 Incometax

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PAMS & Associates

Budget, 2010 Amendment at a glanceCompiled by :

PAMS & Associates

Email : [email protected]


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PAMS & Associates

The Basic Exemption Limit & Tax Slab Rate

Basic exemption limit remains the same :Senior Citizens Rs. 2,40,000/-Resident Women Rs. 1,90,000/-.All other individuals, AOP, BOI and every other artificial judicial person Rs.1,60,000/-

Tax slabs changed as under to take effect from AY 2011-2012:> basic exemption to Rs. 5,00,000/- 10%> Rs. 5,00,000/- to Rs. 8,00,000/- 20%> Income above Rs. 8,00,000/- 30%Rate of Education Cess and Secondary and Higher Education Cess Remainsunchanged at 2% and 1% respectively.

Tax rates for co-operative societies, firms and local authorities shall be thesame as last year.


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PAMS & Associates

EXISTING (For A/Y 2010-11)

MALE

Upto Rs.160000 NIL

Rs.160001-300000 10%

Rs.300001-500000 20%

Rs.500001 and above 30%

FEMALE

Upto Rs.190000 NIL

Rs.190001-300000 10%

Rs.300001-500000 20%


SENIOR CITIZEN

Upto Rs.240000 NIL

Rs.240001-300000 10%

Rs.300001-500000 20%


NO SURCHARGE

+3% Educational Cess on total tax

Amended (For A/Y 2011-12)

MALE

Upto Rs.160000 NIL

Rs.160001-500000 10%

Rs.500001-800000 20%


FEMALE

Upto Rs.190000 NIL

Rs.190001-500000 10%

Rs.500001-800000 20%


SENIOR CITIZEN

Upto Rs.240000 NIL

Rs.240001-500000 10%

Rs.500001-800000 20%


NO SURCHARGE

+3% Educational Cess on total tax

Individual Tax Slab Rate-Comparision


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PAMS & Associates

Amendments to section

Clarification inserted to the definition of income deemed toaccrue or arise in India to include income earned by non

residents from services from a business connection in India:a) whether or not the non-resident has a residence or placeof business or business connection in India; or b) whetheror not the non-resident has rendered services in India.

Amendment to section 9.

This is made effective retrospective from 1st

June1976.


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PAMS & Associates

Scope of Income amended to include;

Value of immovable property received by an individual andHUF to be treated as income only if it is received withoutconsideration. Effective from 1 st October,2009

Transfer of unlisted shares below their fair market value to

be treated as income if transferred to a company (notbeing a company in which public are substantiallyinterested) or a firm by any person or persons. Effective1st June 2010.

Property for the purpose of determining income form othersources shall also include bullion. Effective 1st June 2010.


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PAMS & Associates

Scope of Chapter VI expanded to inlude

A deduction from taxable income of upto Rs. 20,000/-available on investment in long term infrastructure bondsas provided for in newly inserted section 80CCF . Effectiveassessment year 2011-2012. Only to Individuals & HUF.

Contribution to Central Government Health Scheme(CGHS) to be eligible for deduction under section 80D. Effective assessment year 2011-2012.

Contribution to organizations engaged in social scienceand statistical research eligible for deduction under section80GGA. Effective assessment year 2011-2012.


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Amendments applicable to charitable trust and institutions

An entity shall be continue to be deemed to be carrying onactivity of general public utility (covered by the definition of charitable purpose) if the income from activity involving trade,commerce business does not exceed Rs.1 million in a previousyear. Effective from Assessment Year 2009-10.Income of an organization involved in research in socialscience or statistical research shall be exempt from tax.Effective from1st April 2011.

The Commissioner shall have the power to cancel registrationof a Trust/ Institution obtained under section 12A if such trustis discovered to be non-genuine or has activities which do not

comply with its objects. Effective from1st June 2010 . Theimplied power is now made expressed.



Amendments applicable to LIMITED LIABILITY PARTNERSHIPS

Aggregate of the depreciation allowable to the succeeding LLP and the predecessorcompany shall not exceed the depreciation allowable had no succession taken place.

Deduction on account amortization of expenditure relating to voluntary retirementscheme shall be available to successor LLP. No deduction available to thepredecessor company in the year in which conversion takes place.Cost of acquisition in the hands of an LLP of an asset on which deduction has beenclaimed by the predecessor under section 35AD shall be Nil.Cost of acquisition in the hands of an LLP of a block asset shall be written down valueof the asset on the date of conversion of predecessor company into a LLP.

Transfer of assets from a company to a LLP shall not be regarded as transfer subjectto a conditions specified in the Act.Accumulated loss or depreciation of the preceding company shall be loss ordepreciation of the LLP of the year in which the reorganization is effected.MAT credit of the preceding company will not be available to the succeeding LLP.



Amendments in BUSINESS INCOME

Domestic companies having income above Rs. 10 million to pay surcharge @7.5% as against 10% earlier. Companies, other than domestic companies, topay surcharge @ 2.5%. Rate of education and secondary and highereducation cess same as last year. Effective assessment year 2011-2012 Effective assessment year 2011-12 weighted deduction of 175% oncontributions made to approved college, university, research institution orresearch association for carrying out social and statistical research shall be

available. Similar deduction shall also be available on contribution made forscientific research to approved University, IIT and National Laboratory. 200%deduction on expenditure on in house approved scientific research anddevelopment facility. Effective from assessment year 2011-12 .Building or operating any new hotel of two star or above category eligible for deduction under section 35AD for capital expenditure other than on land,goodwill and financial instruments. An entity cannot claim deductionsimultaneously under 35AD and chapter VIA. Effective assessment year 2011-12No disallowance if tax deducted at source deposited on or before the due dateof filing of the tax return. Effective from assessment year 2010-11



Audit of accounts required in case gross receipts exceed Rs. 60 Lakhs incase of a assessee carrying on business and Rs. 15 Lakhs in case of anassessee carrying on profession. Further, penalty for failure to get accountsaudited in accordance with section 44AB enhanced to Rs. 1,50,000/-.Effective from assessment year 2011 -12.For the purpose computing profit on presumptive basis the limit of turnoverenhanced to 60 Lakhs. Effective from assessment year 2011 -12For the purposes of Section 80IB, Housing Project granted approval on orafter 01.04.2005 can complete such projects within 5 years from the dateof approval. Effective from assessment 2010-2011. Built up area for shops and other commercial establishments in a housingproject can be the higher of 3% of the aggregate built-up area or 5000 sq.ft. Effective from assessment year 2010-2011.Deduction under section 80ID available to an undertaking engaged inbusiness of hotel, convention centre in specified area if the hotel isconstructed and becomes operational from the period 01.04.2007 to

31.07.2010. Effective from assessment year 2011-2012. A non-resident engaged in the business of providing services of facilities orsupplying plant and machinery on hire to be used for prospecting /extraction / production of mineral oil claiming benefit of lower tax rateunder section 44BB shall not be eligible to claim benefits under section44DA. Effective from assessment 2011-2012.



Amendments applicable to MINIMUM ALTERNATE TAX (MAT)

MAT tax to be computed @ 18% of the book profits as against15% earlier. Effective from assessment year 2011-2012.



Amendments applicable to WITHHOLDING TAX PROVISIONS

Payment from Winning of lottery / crossword puzzle / cardgame - No TDS in case amount received on account of winning fromlottery / crossword puzzle / card game is less than Rs. 10,000/-. Witheffect from 01.07.2010.

Payment on account of Winning from horse race - No TDS incase amount received on account of winning from horse race is lessthan Rs. 5,000/-. With effect from 01.07.2010.

Payment to Contractors - Tax at source is required to be deductedif payment on account of a single transaction is in excess of Rs.30,000/- or aggregate payments during the financial year exceed Rs.75,000/-. With effect from 01.07.2010.

Payment relating to Insurance commission - No tax at source tobe deducted from any income below Rs. 20,000/- relating to solicitingand procuring insurance business. With effect from 01.07.2010



Payment relating to Brokerage - No tax at source to be deductedfrom any income below Rs. 5,000/- relating to brokerage andcommission. With effect from 01.07.2010

Payment relating to Rent - No tax at source to be deducted from anyincome below Rs. 1,80,000/- relating to rental income. With effect from01.07.2010

Payment relating to Professional and Technical Services - No taxat source to be deducted from any income below Rs. 30,000/- relating toprofessional and technical services. With effect from 01.07.2010

Interest on Failure to deduct and deposit tax at source Interest on account of failure to deduct or deposit tax at source shall

attract interest @ 1.5% per month. With effect from 01.07.2010


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OTHER AMENDMENTS

Changes brought about in the proceedings in the settlementcommission and appeals before the High Court.

Provisions relating to allotment of document identificationnumber to be applicable on or after 1st July 2011.


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PAMS & Associates

Send your Comments At :

PAMS & Associates, Chartered Accountants

274, 3 rd Floor, Masjid Moth

South Extension-II,New Delhi-110019

Phone:011-41055260 Or

mail to;

Pawan Agarwal

Email : [email protected]
mailto:[email protected]:[email protected]

Budget,2010 Incometax

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