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OVERVIEW OF FINANCE BILL, 2010 [DIRECT TAXES ONLY]

D. DHANDARIA & COMPANY CHARTERED ACCOUNTANTS TINSUKIA * KOLKATA. OVERVIEW OF FINANCE BILL, 2010 [DIRECT TAXES ONLY]. INDIVIDUALS. NO INCREASE IN BASIC EXEMPTION LIMITS TAX SLABS CHANGED (Details in subsequent slides)

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OVERVIEW OF FINANCE BILL, 2010 [DIRECT TAXES ONLY]

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  1. D. DHANDARIA & COMPANY CHARTERED ACCOUNTANTS TINSUKIA * KOLKATA OVERVIEW OF FINANCE BILL, 2010[DIRECT TAXES ONLY] D. DHANDARIA & CO.

  2. INDIVIDUALS • 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. D. DHANDARIA & CO.

  3. COMPANIES • 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% D. DHANDARIA & CO.

  4. NON-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]. D. DHANDARIA & CO.

  5. 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. D. DHANDARIA & CO.

  6. TAX SLABS FOR INDIVIDUALS D. DHANDARIA & CO.

  7. TDS/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 D. DHANDARIA & CO.

  8. DEDUCTION 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. D. DHANDARIA & CO.

  9. DEDUCTION 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. D. DHANDARIA & CO.

  10. WEIGHTED DEDUCTION FOR RESEARCH D. DHANDARIA & CO.

  11. WEIGHTED DEDUCTION FOR RESEARCH D. DHANDARIA & CO.

  12. INCOME FROM OTHER SOURCES (Gifts- I) • RECEIPT OF BULLION (Gold, Silver and other precious metals) ALSO MADE TAXABLEW.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 D. DHANDARIA & CO.

  13. INCOME FROM OTHER SOURCES (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. D. DHANDARIA & CO.

  14. THRESHOLD LIMITS OF TDS D. DHANDARIA & CO.

  15. INTEREST ON DELAYED DEPOSIT OF TDS D. DHANDARIA & CO.

  16. 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. D. DHANDARIA & CO.

  17. 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. D. DHANDARIA & CO.

  18. HOTELS 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. D. DHANDARIA & CO.

  19. LIMITED 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 D. DHANDARIA & CO.

  20. DEDUCTIONS • 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. D. DHANDARIA & CO.

  21. REFERENCE TO VALUER • PURSUANT TO AMENDMENTS IN SECTION 56, PROVISION MADE FOR REFERENCE TOVALUER FOR DETERMINATIONOF VALUE OF GIFT IN CASE OF TRANSFER OF PROPERTY WITHOUT CONSIDERATION OR FOR INADEQUATE CONSIDERATION. D. DHANDARIA & CO.

  22. MISCELLANEOUS • 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. D. DHANDARIA & CO.

  23. SERVICE 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 D. DHANDARIA & CO.

  24. CONTACT US AT: • For any queries, contact us at: d_dhandaria@rediffmail.com naveen_dhandaria@yahoo.co.in Phones: 94350-35007; 94351-35460; (0374) - 2337684 D. DHANDARIA & CO.

  25. THANK YOU D. DHANDARIA & CO.

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