d. dhandaria & co. overview of finance bill, 2010 [direct taxes only] d. dhandaria & company...

D. DHANDARIA & CO. D. DHANDARIA & CO.

OVERVIEW OF FINANCE BILL, 2010OVERVIEW OF FINANCE BILL, 2010[DIRECT TAXES ONLY][DIRECT TAXES ONLY]

D. DHANDARIA & COMPANY CHARTERED ACCOUNTANTS TINSUKIA * KOLKATA


INDIVIDUALSINDIVIDUALS

• NO INCREASE IN BASIC EXEMPTION LIMITS• TAX SLABS CHANGED (Details in subsequent slides)

• ADDITIONAL DEDUCTION UPTO RS. 20000 FOR INVESTMENT IN INFRASTRUCTURE BONDS [Section 80CCF – details in subsequent slides].

• CONTRIBUTION TO “CENTRAL GOVT. HEALTH SCHEME” TO QUALIFY FOR DEDUCTION U/S. 80D

• SIMPLIFIED SARAL FORM TO BE NOTIFIED.


COMPANIESCOMPANIES

• NO CHANGES IN RATES OF TAX FOR COMPANIES• NO CHANGES IN RATES OF CORPORATE DIVIDEND

TAX• MAT INCREASED FROM 15% TO 18%• SURCHARGE IN CASE OF DOMESTIC COMPANIES

REDUCED FROM 10% TO 7.5%


NON-RESIDENTSNON-RESIDENTS

• RETROSPECTIVE AMENDMENT OF SECTION 9 ENLARGING THE SCOPE OF “INCOME DEEMED TO ACCRUE OR ARISE IN INDIA”.

• BENEFIT OF PRESUMPTIVE TAXATION U/S. 44BB NOT AVAILABLE TO BUSINESS OF EXPLORATION, ETC. OF MINERAL OILS [Section 44BB amended]

• SPECIAL PROVISION FOR COMPUTING INCOME TAX BY WAY OF ROYALTIES IN CASE OF NON-RESIDENTS [Section 44DA].


TAX AUDIT TAX AUDIT

• THRESHOLD LIMIT FOR TAX AUDIT INCREASED TO RS. 60 LAKHS FOR BUSINESS INCOME AND TO RS. 15 LAKHS FOR PROFESSIONALS

• PENALTY FOR FAILURE TO GET ACCOUNTS AUDITED ENHANCED TO RS. 1,50,000/- W.E.F. 01-4-2011.


TAX SLABS FOR INDIVIDUALSTAX SLABS FOR INDIVIDUALS

RATES GENERAL WOMEN SR. CITIZENS

Exemption Limit

Rs. 1,60,000 Rs. 1,90,000 Rs. 2,40,000

10% From 1,60,001 to 5,00,000

From 1,90,001 to 5,00,000

From 2,40,001 to 5,00,000

20% 5,00,000 – 8,00,000

30% Rs. 8,00,001 and above

Education cess & S.H.E.cess together remain at 3%. No surcharge.


TDS/TCSTDS/TCS

• THRESHOLD LIMITS FOR DEDUCTION OF TAX AT SOURCE INCREASED W.E.F. 01-7-2010 IN SOME CASES [Details in subsequent slides]

• RULES FOR DISALLOWANCE OF EXPENSES DUE TO DELAYED DEPOSITS RELAXED. NOW NO DISALLOWANCE IF DEPOSITS MADE BEFORE DUE DATE OF RETURN [Section 40(a)(ia) – details in subsequent slides]

• INTEREST ON DELAYED DEPOSIT OF TDS INCREASED FROM 1% TO 1.5% PER MONTH

• DEMAT PLAN OF TDS CERTIFICATES POSTPONED


DEDUCTION U/S. 80CCFDEDUCTION U/S. 80CCF

• In case of an individual and a H.U.F., an extra deduction upto Rs. 20000 will be admissible for investment in “Long-term Infrastructure Bonds” as may be notified by the Central Government.

• This deduction upto Rs. 20000 will be in addition to existing overall deduction of Rs. 1,00,000 under sections 80C, 80CCC and 80CCD.


DEDUCTION U/S. 80DDEDUCTION U/S. 80D

• DEDUCTION WILL BE ALLOWED FOR CONTRIBUTION MADE TO “CENTRAL GOVERNMENT HEALTH SCHEME” ALSO.

• THE EXISTING LIMIT OF Rs. 15000 IS NOT ENHANCED.


WEIGHTED DEDUCTION FOR RESEARCHWEIGHTED DEDUCTION FOR RESEARCH

Category of Research association, university, college, etc.

Weighted deduction as per existing provisions

Weighted deduction as per proposed amendment

Research Association or to University or college or other institutions engaged in scientific research

125% 175%

National Laboratory or a University or an Indian Institute of Technology or a specified person engaged in scientific research

125% 175%

Contd.


WEIGHTED DEDUCTION FOR RESEARCHWEIGHTED DEDUCTION FOR RESEARCH

Category of Research association, university, college, etc.

Weighted deduction as per existing provisions

Weighted deduction as per proposed amendment

Company engaged in the business of bio-technology or in the business of manufacture or production of any drugs, pharmaceuticals, electronic equipments, computers, telecommunications equipments, chemicals or any other notified article or thing which incurs any expenditure on scientific research or in-house research and development facility.

150% 200%


INCOME FROM OTHER SOURCES INCOME FROM OTHER SOURCES (Gifts- I)(Gifts- I)

• RECEIPT OF BULLION (Gold, Silver and other precious metals) ALSO MADE TAXABLE W.E.F. 01-6-2010.

• RECEIPT OF IMMOVABLE PROPERTY FOR INADEQUATE CONSIDERATION NOT TAXABLE IN THE HANDS OF TRANSFEREE RETROSPECTIVELY W.E.F. 01-10-2009.

• NO TAX ON RECEIPT OF STOCK-IN-TRADE, RAW MATERIAL AND CONSUMABLE STORES OF ANY BUSINESS


INCOME FROM OTHER SOURCES INCOME FROM OTHER SOURCES (Gifts-II)(Gifts-II)

• NEW PROVISIONS FOR TAXATION OF DEEMED GIFTS HAVE BEEN INTRODUCED

• IF A COMPANY OR A FIRM ACQUIRES SHARES OF OTHER UNLISTED COMPANY FOR INADEQUATE CONSIDERATION AND AGGREGATE FAIR MARKET VALUE EXCEEDS Rs. 50000/-, SUCH COMPANY OR FIRM WILL BE LIABLE TO TAX.


THRESHOLD LIMITS OF TDSTHRESHOLD LIMITS OF TDS

Section Nature Threshold limits w.e.f. 01-7-2010

Existing Proposed

194B Winning from Lotteries 5000 10000

194BB Winning from Horse Races 2500 5000

194C Payment to contractor (for a single transaction)

20000 30000

194C Payment to contractor (for aggregate of transactions during a financial year)

50000 75000

194D Insurance Commission 5000 20000

194H Commission/Brokerage 2500 5000

194I Rent 120000 180000

194J Professional Fees 20000 30000


INTEREST ON DELAYED DEPOSIT OF INTEREST ON DELAYED DEPOSIT OF TDSTDS

Description Existing provision Proposed w.e.f. 01.7.2010

Non Deduction

1% p.m. from date it was deductible till date of deposit

1% p.m. from date it was deductible till date of deduction

Delayed Deposit

1% p.m. from date of deduction till date of deposit

1.5% p.m. from date of deduction till date of deposit

Note: Such interest is not allowed as business expenditure


EXISTING PROVISIONS OF SEC.40(a)(ia)EXISTING PROVISIONS OF SEC.40(a)(ia)

• The above section provides for disallowance of certain expenses due to non-deduction or non-payment of TDS.

• The taxes required to be deducted during 11 months other than the last month of the year can be deposited within the financial year to avoid such disallowance.

• The taxes required to be deducted in last month of the year can be deposited before due date of filing of return of income to avoid such disallowance.

• Taxes deducted in subsequent year are allowed in the year of deposit.


PROPOSED AMENDMENT OF SEC. 40(a)(ia)PROPOSED AMENDMENT OF SEC. 40(a)(ia)

• The differential treatment of taxes required to be deducted during 11 months of a year other than March and those required to be deducted in March will be removed.

• There will be no disallowance if the taxes are deposited before the due date of filing of return of income. [This will apply to both – taxes deducted during 11 months other than March; and taxes deducted during March.

• Taxes paid after due date and taxes deducted in subsequent year will be allowed in the year in which TDS is deposited.


HOTELS AS SPECIFIED BUSINESSHOTELS AS SPECIFIED BUSINESS

• UNDER SECTION 35 AD INTRODUCED IN LAST BUDGET, CAPITAL EXPENDITURE INCURRED BY “SPECIFIED BUSINESS’ IS ALLOWED AS A DEDUCTION

• NEW HOTELS OF TWO-STAR AND ABOVE CATEGORIES ARE ADDED TO SUCH SPECIFIED BUSINESS w.e.f. 01-4-2011.


LIMITED LIABILITY PARTNERSHIPSLIMITED LIABILITY PARTNERSHIPS

• NO CAPITAL GAINS TAX ON CONVERSION OF PRIVATE LIMITED OR PUBLIC UNLISTED COMPANY TO LIMITED LIABILITY PARTNERSHIP

• BUT CONDITIONS FOR ABOVE VERY STRICT


DEDUCTIONSDEDUCTIONS

• NO NEW DEDUCTIONS PROPOSED EXCEPT U/S. 80CCF STATED ELSEWHERE

• HOWEVER, TIME LIMIT FOR COMPLETION OF CERTAIN HOUSING PROJECTS EXTENDED BY ONE MORE YEAR AND CERTAIN OTHER RELAXATIONS GIVEN TO THEM.


REFERENCE TO VALUERREFERENCE TO VALUER

• PURSUANT TO AMENDMENTS IN SECTION 56, PROVISION MADE FOR REFERENCE TO VALUER FOR DETERMINATION OF VALUE OF GIFT IN CASE OF TRANSFER OF PROPERTY WITHOUT CONSIDERATION OR FOR INADEQUATE CONSIDERATION.


MISCELLANEOUSMISCELLANEOUS

• DIRECT TAX CODE TO BE IMPLEMENTED W.E.F. 01-4-2011

• GST (GOODS AND SERVICES TAX) TO BE IMPLEMENTED W.E.F. 01-4-2011

• GENERAL RATE OF EXCISE DUTY TO BE INREASED FROM 8% TO 10% [except petroleum products]

• DOCUMENT IDENTIFICATION NUMBER FROM 01-10-2010.


SERVICE TAXSERVICE TAX

• RATE OF SERVICE TAX CONTINUES TO BE 10%. APPREHENSIONS OF INCREASE BELIED

• RETROSPECTIVE AMENDMENT OF TAXATION OF RENTING OF IMMOVABLE PROPERTY TO OVERCOME THE JUDGMENT OF DELHI HIGH COURT

• 8 NEW SERVICES ADDED TO TAX NET• BUILDER TAXABLE ON ADVANCE BOOKING• SOFTWARE PACKAGES EXEMPTED SUBJECT TO

SPECIFIED CONDITIONS


CONTACT US AT: CONTACT US AT:

• For any queries, contact us at:

[email protected] [email protected]: 94350-35007; 94351-35460; (0374) - 2337684

mailto:[email protected]

mailto:[email protected]


THANK YOU

d. dhandaria & co. overview of finance bill, 2010 [direct taxes only] d. dhandaria & company...

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