AMENDMENTS
-
AJAY.IAIN
vtti
AMENDMENTS (Finance Act2
Applicability of servicesfor May and November 2010examinations:ProfessionalCompetenceExamination It is clarified that in Part -II : Servicetax and VAT of Paper 5 : Taxation, students wiil not be tested specific questions covering individual taxable services IntegratedProfessionalCompetenceExamination It is clarified that in Part -II : Servicetax and VAT of Paper 4 : Taxation, students wiil be examined in respectof the following taxableservices: 1. 2. 3. 4. 5.
Legal consultancyservices Mandap keeper'sservices Commercial training or coaching services Information technology software services servicesin respectof membershipof crubsor associations
AMENDMENTS Ratesof Income-taxfor Assessmentyear 20I0-II
1' For woman, resident in India and below the age of 65 yearcLt time during the prev ".,y vear. Upto Rs. 1,90,000 Rs. 1,90,001to Rs.3,00,000 Rs.3,00,001to Rs.5,00,000 Above Rs.5,00,000
Nil 1.0% 20%
30%
2. For an Individual (man or woman), resident in India who is of the age of 65 years or mor any time during the previous year.
Upto Rs.2,40,000
Nil
Rs.2,40,001to Rs.3.00.000
100/^
Rs.3,00,001 to Rs.5,00,000
20% 30%
Above Rs.5,00,000
3. Individuals, [other than those mentioned in above] HUF. Upto Rs. 1,60,000 Ni1 Rs. 1,60,001 to Rs.3,00,000 70% Rs.3,00,001 to Rs.5,00,000 209,0 Above Rs.5,00,000 30o,o Note:- No surchargeis payableas it hus b"en 'Education Cess'@2"/" and SHEC@ ro/oonincome tax shall be chargeable. 4. In caseof firm (including limited liability partnership)
30%
Educationcess@2"/. and SHEC@1"/, onlncome tax shall be chargeable.
In Case of a Co
For Domestic com For Foreign comPany foreign comPanY will ComPanY and 2'5"/oin Domestic of case in @t0% Surcharge applicable. onlncome tax shall be chargeable' Education cess@ 2'/" and,sHEC@1"/. exceptcompanies' Surchargehas been abolished for all 2(15) Definition of charitable purpose Section monuments or environment and preservation of of preservation aholnc[ud.es Charitable purpose interest' piacesot ob1..i of artistic or historic have been Deduction of section 80GGB and 80GGC
extendedto ElectoralTrust'
Signing of return Section140 available ' by any partner' LLP: by designatedpartner or if not It is proPosed prevailit g fot generalpartnership .,r :, :r_ *^^-i-d
/' a narrner of T,Lp.
cannot be 'attributed to .,.'te-"i" p'o""sthat non recovery tu*, of payment for liable severally of duty on his part' ur,y grom neglect,*i'fuu'uttte or breach , '/
sameand Rights ur'raouiig#ons of partners remains after conversion There is no transfer of any u""t o' liability
40&) 10.Deduction for partnership firm Section tf*d P-f"*i"nal
Ott tnu balance of boPlp1gl{
firms/ other firms or in caseof a loss
Maximum Remuneration Rs.150,000or at the rate of 90% of the book rofit, whicheYgllg rngle at the rate of 60"h
ffiapPlicableforLLP
tt'
phvsical inanon- riving achange as racbuer" frt"',T;!"J;tJHTJI,r#il*ffHT:;:ff94i" object-
1 : - -r ^- ^-a:-1^ ^- drino into new obiect having a different
(a)Resultingintransformationoftheobjectorarticleorthingintonewobjecthavingadiffer name/ character,and use; or (b)Bringingintoexistenceanewobjectorarticleorthingwithdifferentchemicalcompositionor integral structure'
12. Compensationon voluntary retirement Section 10(10C) Amount receivedor receivaile on volun"t;;ro#;; LrrL wil vvrrr be uE 4lruwecl alowed as as rrerief u/sg9or as a deduction u/s 10(10C). 13. Power to issueZero Coupon Bonds
Section2(4g) Now scheduiedbanks including nationalized banks are also made eligible to issuezero coupon bonds.
14.
::j":::11":rime
limit for filing applicationsection10(23c)
;""*;;;*#
n:re thanRs.1 crore,30thsep declares rdate l e + o ror f n r riring f,ili-^.^-^r: application. rt ;";'il #;;#;"dffii?i,i!'?Ji i:*:,t:" calculating Gross Receipts. as the
lasf
15' Deduction in respectof contribution to pension schemeof central Government section g'ccD Tax benefit u/s 80CCDhas beenextended to "s"li"mp loyed" rrLuvr(rLtals ""^r !.rrrvlEu individuals and it doesnot exceed 1,0% of Gross Total Income.
15' special provisions relating to voluntary
contributions receivedby electoral trust. The following section 138 shall be inserted after section 13A by the Finance (No. 2) Act,2009 Any voluntary contributions received by ut electoral trust shall not be included in the total income of the previous year of such electoral trust, if_ (a) such electoral trust distributes to any poiitical parry, registered under section 29A of the Representationof the People Act, 195i 1+eor rgsi).,gii-r"*" ,ura pr"1,1ous year, ninety-five per cent of the aggregatedonations received by it durini the sald'pr".rror* year along with the surplus, if any,brought forward from any elrfier previous year; and (b) such electoral trust functions in accordancewith the rules made by the Central Government.
17. Fringe benefit tax has been abolished 18. Scientific researchexpenditure
Section35 \\'eighted deduction of 750vo will not be allowed to the companies engagedin the businessof manufacturingof articles specified in scheduleXI of income tax Act e.g beer, toothpaste,tobacco, chocolates etc.
19. capital Expenditure on specified Businesssection 35AD -\e*' section has been inserted according to which Arrurr"" shail be aliowed 1**%deduction of Capital Expenditure for the Specified business. ercept [-and, goodn ill and fi]rancial instrument) SFefltied businessshall means ) ) ) )
s"ttirg up and operating a cord chain facilities for storage; Transportation and rt arehousing of agricultural produce; Dain- products and other related items; Lal.ing and operating a cross country nafural gas/crud.e/petroleum oil pipeline network for distribution
XI
Amendment:I in section 28
-,- 1-:--r r^-. !L^ ,^6o^n ^{ qnrr aeniral or receivablein cashor kind, by the reasonof any capitallt:*itl": "
thT Lll-.d,
u/h PGBP' if the whole of financial instrument being transferred shall be chargeable u/s 35AD' ure on such capital asseth-asbeen allowed as deduction iA newly introduced, according to which to be set off only against the of any business specified u/s 35AD shall be allowed of the specifiedbusinessu/h PGBP' allowed to be carried forward and shall eloss not setoff in the same assessmentyear shall be only' allowed to be set off against the i4come of specifiedbusiness . deduction Section35(lXviii) to NHB' t subject to creation.of reserve will deduction of an amount not exceeding 20%of the profits of totg term financefor developrnent
ilT.:;ilH::Ho.rations
engagedin providing
TransactionTax has been abolished Section36(1) F-oaity allowed under section 36(1)' lhas been deleted hence,no deduction has been liryment in cash Section 40A (3) transport operator for long haul journey' Lfudt of 20,000has been extended to Rs. 35,000for t
iji
I
l!. C-ompulsory audit of accounts Section 44AB estirnated income and his U / s S e c t i o n 4 4 A D i f a s s e s s e e c l a i m s s u c h i n c o m e t o b e l o w e r t h a n the same is aPPlicable to tax in any P /\ and income exceedsthe maximum amount not chargeable in Section 44AA of Income of all businesseson estimation basis tf- section 4/ADwill be applicable for carculation exceptthose coveredin SectionM AEw'e'f 1 April2011 25. section 44AF Income on estimation basis for retail applicable for all businessesw'e'f 1 April201L
traders has been abslished since 44AD is now :
25 Taxable Limit for Section44 AE' W'e'f 1April2011. p'm' (0 For heavy goods vehicle: - raised to Rs' 5'000from 3'500 from 3,150p'm' (ii) For other than Heavy goodsvehicle: raisedto Rs.4,500 508 27. Computation of capital gain in slump Sale-section Fnr cnmntttins net worth value of assetsshall be:Tvpe of Assets Assqts - I (a) In caseof Depreciable exPenditure of which 35AD I is allowed deductionu/s I (c) tn caseof other Assets
Value of assets
WDV NIL Book Value
28. Provisions for deemed valuation in certain cases of transfer Section 50C With a view to widened the scope of Section 50C, and to include the transactions which were not registered with stamp duty valuation authority and executed through agreement to sell or power of attorney. It is proposed to insert the word" assessable" accompanr-rng tvith assessed.it is done to prevent the leakage of revenue.
29. SpecificincomesSection55(2) For the purpose of "Income from other sources"specificincomesalso includes:(i)
Interest on compensation or on enhanced compensation and
(ii)
'. any kind of moveable or immovable property the value or stamp ciu:' a-;e erf n-hich exceeds Rs. 50,000is received without any consideration. -,'.:---::.I -e=s any kind of movable or immoveable property is received for a considerar.-:-. :::: than stamp duty vaiuation and the difference between the two exceeds R'" :
(iii)
excessamount.
30.Method of accountingSection145 Interestreceivedon compensationor on enhancedcompensationwili be recognizedon casi' 31.Maximum limit for Section80DD and 80U Limit of deduction in caseof severedisability has beenraisedfrom 75,000to Rs. 100,000.
32. Payment of Interest On Loan For Higher Education Section80E For purpose of this sectionnow "higher education"means all fields gf study(including vocationastudies ) pursued after passing the senior secondaryeducation or its equivalent from anv schoo board or university and "Relative" also includes the student for whom the individual is legal guardian. JJ.
Development of infrastructure Section 80IA Terminal date for commencing of an activity is extended from 31.3.2008to 31'.3.2011,
34. Cases when exemption is not available to charitable trust Section 1158BC Anonymous donations shall be taxable (except in the case of religious trust, for r.t'hich the-' exempt) at highest rate of 30"/. to the extent such donation exceeds(i)
5% of total income or
(ii)
1,00,000 whichever is more.
35. Advance tax Section 208 Limit of advance tax pavable has been raised from Rs. 5,000 to Rs. 10,000. 36. Rates of TDS for payment made to contractor Section 194C (i) Indir'idual /HUF -1". (ii)
Others - 2oo
No TDS shall be deducted from anv sum credited or paid to the account of ctntracior in the cox:of business of plving, hiring or leasing goods carriage provided he furnishes hLisP-\\ io deducio: No liability to deduct tax arises, if pavment is made bv Individual or HLT t-rn account of th.epersonal purposes.
.i.i81&8.88*&.,
A]AI- .IAIN
xiii
AMENDMENTS (Finance Act 20(Rt
37. Ratesof TDS for payment made for rent Section194I Rentof P /M - 2% Rentof L/B orF /F -1.0% 38. Quoting PAN through TDS regime Section206A4 It is mandatory for deductee to furnish his PAN to deductor, otherwise higher of following rates rvill be applicablefor TDS{i) (ii)
the ratesprescribedin the act
(iii)
20%
ratesin force
39. Interest for late payment of TDS Section201 If tax payer is resident,order u/s201,(1) for failure to deduct whole or any part of the tax shall be passedwithin 2years from the end of F/Y in which statementof TDS is filed by the deductor. Whereno such statementis filled , order can be passedup till4 yearsfrom the end of F/Y in which payment is made or credit is given. No time limit have beenprescribedfor order u/s201,(1)wherea) b) c)
there is a caseof defalcationof governmentdues the employee would not have paid tax on such perquisite the deducteeis non resident and it is administratively impossible to recover tax from nonresident.
{0. Due Date of Deposit and Return for TDS Section200 Preparestatementsof TDS for such period as may be prescribedby the government. 41. Processingof statementsof tax deducted at source
it is proposed '/ To provide electronicprocessingon the samelines as processingof incometax returns. '/ Following adjustments can be made during computerized processingand calculating tax interest[e.g.r/s201,(1,A)],and refund due(i) Any arithmetical error in the statements;or (ii) Any incorrect claim, if such incorrect claim is apparent from any informaticin in the statements. E . Provisions for payments and TDS to transportersSection194C No TDS is required to be deducted if payment is made to the transporter provided he furnishes his PAN to the deductor. And Deductor who make payment to the transporter without deducting TDS will be required to intimate PAN details to the Income tax Department. {3. Rate of TDS on Unlisted Debentures or Securitiesor on interest other than securitieshas been reduced from Zlo/otoL0oh {{. TDS to be deducted at basic rates ln order t easethe computation of T^DS the act has removed surcharge and education cess and SHEC on tax deducted on payment made to resident tax payer except in case of salary TDS shall t'e deductible after including education cess and SHEC.
45. Perquisite Section17(2) It also includes:(0 The value of any specified security or sweat equity sharestransferred by an employer frer cost or at concessionalrate. (ii) The amount of any contribution to an approved superannuation fund by the emplo'er respectof the assessee, to extentit exceedsone rakh ..rpu"r. (iii) The value of any other fringe benefit or amenity as may be prescribed.
46. Actual Cost Section43 The actual cos-t.ofany Capital Asset on which deduction has been allowed or is allowable to i assessee u/s 35AD shall be treatedas Nil (i) in caseof such assessee and (ii) in any other caseif the Capitar assetis acquiredor received:(a) by way of gift or will or an irrevocable trust (b) on any distribution on iiquidation of company and by such mode of transfer as is referred to in clause(i), (iv), (v), (vi) (vib) (xiii),(xiv) of sec47.
47' Transactionsnot regardedas transfer section 47(xivl Any transfer of a capital asset in a transaction under reverse mortgage scheme shall not I regarded as transfer and therefore shall not attract .upirur gain tax. Reversemortgage schemeinvolves _ ./ Senior citizen borrower mortgages the self occupied residential house property to a iender. '/ The iender makes Periodic/himp sum payment to the borrower during the iatter,s liietime r' The borrower is not required to servicethe loan during the lifetime and therefore doesnot ma* any monthly repayment of principal and interest to the lender { on the borrower's death otttt tt e.uo.ro*".i"urrir'rg ,t house property permanentlr-,the loan is repaid along with accumuratedinterest, thro.rgh'rule" of house property '/ The borrow et /heit's can also repay or prepay tl* loun with accumrrLt"d interest and har-ethe mortgage releasedwithout resorting to sale of property
48. Cost of Acquisition for sweat equity shares where the capital gain arises from tire transfer of specified securify or sweat equity sharesreterre in sec17(2)(vi), the cost of acquisitionof such ,""r.rriiyo. sharesshall be FMv. 49. Income not included in total income Section10 A new clause (43) has been inserter to provide any loan amount received whether in lump su* o in installment under reversemortgage icheme, shall not be included in total income. 50. Basisofcharge Section2g Following incomes are also chargeable under the head 'profits ancl Gains of business o profession':Any sum, whether receir-edor receir.able_
45. Perquisite Section17(2) It also includes:-
(i) n:;::1"":fy;n:tl'u",0.'"""'itv (ii) (iii)
or sweatequitysharestransferred by an employerfra
The amount of any contribution to an approved superannuation fund by the emplo'er respectof the assessee, to extentit exceedsone lakh ..rp""r. The value of any other fringe benefit or amenity as may be prescribed.
46. Actual Cost Section43 The actual tot-t:1any capital Asset on which deduction has been allowed or is allowabie to 1 assessee u/s 35AD shall be treatedas Nil (i) in caseof such assessee and (ii) in any other caseif the Capital assetis acquiredor received:_ (a) by way of gift or will or an irrevocable trust (b) on any distribution on liquidation of company and by such mode of transfer as is referred to in clause (i), (iv), (v), (vi) (vib) (xiii),(xiv) of sec47.
47. Transactionsnot regardedas transfer Section 47(xivl Any transfer of a capital asset in a transaction under reverse mortgage scheme shall not I regardedas transferand thereforeshal not attract.upirut gain tax. Reversemortgageschemeinvolves _ ,/ Senior citizen borrower mortgages the self occupied residential house property to a iender. '/ The iender makes periodic/himp sum payment to ;;;;;r;d; rhe ratter,srtetim" '/ The borrower is not required to service the loan during the lifetime and therefore doesnot maany monthly repayment of principar and interest to the lender '/ on the borrower's death o. or, tne.uorrower i";;i"; the house property permanentlr-,/ the uts ri loan is repaid along with accumulatedinterest, thro.lgh'sale of house prop"r,fr-'/ The borrower/heir's can also repay or prepay th! ioul with accumrrLt"a interest and har-ethe mortgage releasedwithout resorting to sale of p.op".ty
48. Cost of Acquisition for sweat equity shares \Arherethe capital gain arises from tiretransfer of specified security or sweat equity sharesreterre in sec17(2)(vi), the cost of acquisitionof such ,"..r.iiyo. sharesshall be FMV. 49. Income not included in total income Section10 A new clause (43) has been inserter to provide any loan amount received whether in lump sum o in installment under reversemortgage icheme, shall not be included in total income. 50. Basisofcharge Section2g Following incomes are also chargeable under the head 'profits anci Gains of business o. profession':Any sum, whether receir.edor receir-able_
AJAY.IAIN
vtti
AMENDMENTS (Finance Act2
Applicability of servicesfor May and November 2010examinations:ProfessionalCompetenceExamination It is clarified that in Part -II : Servicetax and VAT of Paper 5 : Taxation, students wiil not be tested specific questions covering individual taxable services IntegratedProfessionalCompetenceExamination It is clarified that in Part -II : Servicetax and VAT of Paper 4 : Taxation, students wiil be examined in respectof the following taxableservices: 1. 2. 3. 4. 5.
Legal consultancyservices Mandap keeper'sservices Commercial training or coaching services Information technology software services servicesin respectof membershipof crubsor associations
AMENDMENTS Ratesof Income-taxfor Assessmentyear 20I0-II
1' For woman, resident in India and below the age of 65 yearcLt time during the prev ".,y vear. Upto Rs. 1,90,000 Rs. 1,90,001to Rs.3,00,000 Rs.3,00,001to Rs.5,00,000 Above Rs.5,00,000
Nil 1.0% 20%
30%
2. For an Individual (man or woman), resident in India who is of the age of 65 years or mor any time during the previous year.
Upto Rs.2,40,000
Nil
Rs.2,40,001to Rs.3.00.000
100/^
Rs.3,00,001 to Rs.5,00,000
20% 30%
Above Rs.5,00,000
3. Individuals, [other than those mentioned in above] HUF. Upto Rs. 1,60,000 Ni1 Rs. 1,60,001 to Rs.3,00,000 70% Rs.3,00,001 to Rs.5,00,000 209,0 Above Rs.5,00,000 30o,o Note:- No surchargeis payableas it hus b"en 'Education Cess'@2"/" and SHEC@ ro/oonincome tax shall be chargeable. 4. In caseof firm (including limited liability partnership)
30%
Educationcess@2"/. and SHEC@1"/, onlncome tax shall be chargeable.
In Case of a Co
For Domestic com For Foreign comPany foreign comPanY will ComPanY and 2'5"/oin Domestic of case in @t0% Surcharge applicable. onlncome tax shall be chargeable' Education cess@ 2'/" and,sHEC@1"/. exceptcompanies' Surchargehas been abolished for all 2(15) Definition of charitable purpose Section monuments or environment and preservation of of preservation aholnc[ud.es Charitable purpose interest' piacesot ob1..i of artistic or historic have been Deduction of section 80GGB and 80GGC
extendedto ElectoralTrust'
Signing of return Section140 available ' by any partner' LLP: by designatedpartner or if not It is proPosed prevailit g fot generalpartnership .,r :, :r_ *^^-i-d
/' a narrner of T,Lp.
cannot be 'attributed to .,.'te-"i" p'o""sthat non recovery tu*, of payment for liable severally of duty on his part' ur,y grom neglect,*i'fuu'uttte or breach , '/
sameand Rights ur'raouiig#ons of partners remains after conversion There is no transfer of any u""t o' liability
40&) 10.Deduction for partnership firm Section tf*d P-f"*i"nal
Ott tnu balance of boPlp1gl{
firms/ other firms or in caseof a loss
Maximum Remuneration Rs.150,000or at the rate of 90% of the book rofit, whicheYgllg rngle at the rate of 60"h
ffiapPlicableforLLP
tt'
phvsical inanon- riving achange as racbuer" frt"',T;!"J;tJHTJI,r#il*ffHT:;:ff94i" object-
1 : - -r ^- ^-a:-1^ ^- drino into new obiect having a different
(a)Resultingintransformationoftheobjectorarticleorthingintonewobjecthavingadiffer name/ character,and use; or (b)Bringingintoexistenceanewobjectorarticleorthingwithdifferentchemicalcompositionor integral structure'
12. Compensationon voluntary retirement Section 10(10C) Amount receivedor receivaile on volun"t;;ro#;; LrrL wil vvrrr be uE 4lruwecl alowed as as rrerief u/sg9or as a deduction u/s 10(10C). 13. Power to issueZero Coupon Bonds
Section2(4g) Now scheduiedbanks including nationalized banks are also made eligible to issuezero coupon bonds.
14.
::j":::11":rime
limit for filing applicationsection10(23c)
;""*;;;*#
n:re thanRs.1 crore,30thsep declares rdate l e + o ror f n r riring f,ili-^.^-^r: application. rt ;";'il #;;#;"dffii?i,i!'?Ji i:*:,t:" calculating Gross Receipts. as the
lasf
15' Deduction in respectof contribution to pension schemeof central Government section g'ccD Tax benefit u/s 80CCDhas beenextended to "s"li"mp loyed" rrLuvr(rLtals ""^r !.rrrvlEu individuals and it doesnot exceed 1,0% of Gross Total Income.
15' special provisions relating to voluntary
contributions receivedby electoral trust. The following section 138 shall be inserted after section 13A by the Finance (No. 2) Act,2009 Any voluntary contributions received by ut electoral trust shall not be included in the total income of the previous year of such electoral trust, if_ (a) such electoral trust distributes to any poiitical parry, registered under section 29A of the Representationof the People Act, 195i 1+eor rgsi).,gii-r"*" ,ura pr"1,1ous year, ninety-five per cent of the aggregatedonations received by it durini the sald'pr".rror* year along with the surplus, if any,brought forward from any elrfier previous year; and (b) such electoral trust functions in accordancewith the rules made by the Central Government.
17. Fringe benefit tax has been abolished 18. Scientific researchexpenditure
Section35 \\'eighted deduction of 750vo will not be allowed to the companies engagedin the businessof manufacturingof articles specified in scheduleXI of income tax Act e.g beer, toothpaste,tobacco, chocolates etc.
19. capital Expenditure on specified Businesssection 35AD -\e*' section has been inserted according to which Arrurr"" shail be aliowed 1**%deduction of Capital Expenditure for the Specified business. ercept [-and, goodn ill and fi]rancial instrument) SFefltied businessshall means ) ) ) )
s"ttirg up and operating a cord chain facilities for storage; Transportation and rt arehousing of agricultural produce; Dain- products and other related items; Lal.ing and operating a cross country nafural gas/crud.e/petroleum oil pipeline network for distribution
XI
Amendment:I in section 28
-,- 1-:--r r^-. !L^ ,^6o^n ^{ qnrr aeniral or receivablein cashor kind, by the reasonof any capitallt:*itl": "
thT Lll-.d,
u/h PGBP' if the whole of financial instrument being transferred shall be chargeable u/s 35AD' ure on such capital asseth-asbeen allowed as deduction iA newly introduced, according to which to be set off only against the of any business specified u/s 35AD shall be allowed of the specifiedbusinessu/h PGBP' allowed to be carried forward and shall eloss not setoff in the same assessmentyear shall be only' allowed to be set off against the i4come of specifiedbusiness . deduction Section35(lXviii) to NHB' t subject to creation.of reserve will deduction of an amount not exceeding 20%of the profits of totg term financefor developrnent
ilT.:;ilH::Ho.rations
engagedin providing
TransactionTax has been abolished Section36(1) F-oaity allowed under section 36(1)' lhas been deleted hence,no deduction has been liryment in cash Section 40A (3) transport operator for long haul journey' Lfudt of 20,000has been extended to Rs. 35,000for t
iji
I
l!. C-ompulsory audit of accounts Section 44AB estirnated income and his U / s S e c t i o n 4 4 A D i f a s s e s s e e c l a i m s s u c h i n c o m e t o b e l o w e r t h a n the same is aPPlicable to tax in any P /\ and income exceedsthe maximum amount not chargeable in Section 44AA of Income of all businesseson estimation basis tf- section 4/ADwill be applicable for carculation exceptthose coveredin SectionM AEw'e'f 1 April2011 25. section 44AF Income on estimation basis for retail applicable for all businessesw'e'f 1 April201L
traders has been abslished since 44AD is now :
25 Taxable Limit for Section44 AE' W'e'f 1April2011. p'm' (0 For heavy goods vehicle: - raised to Rs' 5'000from 3'500 from 3,150p'm' (ii) For other than Heavy goodsvehicle: raisedto Rs.4,500 508 27. Computation of capital gain in slump Sale-section Fnr cnmntttins net worth value of assetsshall be:Tvpe of Assets Assqts - I (a) In caseof Depreciable exPenditure of which 35AD I is allowed deductionu/s I (c) tn caseof other Assets
Value of assets
WDV NIL Book Value
28. Provisions for deemed valuation in certain cases of transfer Section 50C With a view to widened the scope of Section 50C, and to include the transactions which were not registered with stamp duty valuation authority and executed through agreement to sell or power of attorney. It is proposed to insert the word" assessable" accompanr-rng tvith assessed.it is done to prevent the leakage of revenue.
29. SpecificincomesSection55(2) For the purpose of "Income from other sources"specificincomesalso includes:(i)
Interest on compensation or on enhanced compensation and
(ii)
'. any kind of moveable or immovable property the value or stamp ciu:' a-;e erf n-hich exceeds Rs. 50,000is received without any consideration. -,'.:---::.I -e=s any kind of movable or immoveable property is received for a considerar.-:-. :::: than stamp duty vaiuation and the difference between the two exceeds R'" :
(iii)
excessamount.
30.Method of accountingSection145 Interestreceivedon compensationor on enhancedcompensationwili be recognizedon casi' 31.Maximum limit for Section80DD and 80U Limit of deduction in caseof severedisability has beenraisedfrom 75,000to Rs. 100,000.
32. Payment of Interest On Loan For Higher Education Section80E For purpose of this sectionnow "higher education"means all fields gf study(including vocationastudies ) pursued after passing the senior secondaryeducation or its equivalent from anv schoo board or university and "Relative" also includes the student for whom the individual is legal guardian. JJ.
Development of infrastructure Section 80IA Terminal date for commencing of an activity is extended from 31.3.2008to 31'.3.2011,
34. Cases when exemption is not available to charitable trust Section 1158BC Anonymous donations shall be taxable (except in the case of religious trust, for r.t'hich the-' exempt) at highest rate of 30"/. to the extent such donation exceeds(i)
5% of total income or
(ii)
1,00,000 whichever is more.
35. Advance tax Section 208 Limit of advance tax pavable has been raised from Rs. 5,000 to Rs. 10,000. 36. Rates of TDS for payment made to contractor Section 194C (i) Indir'idual /HUF -1". (ii)
Others - 2oo
No TDS shall be deducted from anv sum credited or paid to the account of ctntracior in the cox:of business of plving, hiring or leasing goods carriage provided he furnishes hLisP-\\ io deducio: No liability to deduct tax arises, if pavment is made bv Individual or HLT t-rn account of th.epersonal purposes.
.i.i81&8.88*&.,
A]AI- .IAIN
xiii
AMENDMENTS (Finance Act 20(Rt
37. Ratesof TDS for payment made for rent Section194I Rentof P /M - 2% Rentof L/B orF /F -1.0% 38. Quoting PAN through TDS regime Section206A4 It is mandatory for deductee to furnish his PAN to deductor, otherwise higher of following rates rvill be applicablefor TDS{i) (ii)
the ratesprescribedin the act
(iii)
20%
ratesin force
39. Interest for late payment of TDS Section201 If tax payer is resident,order u/s201,(1) for failure to deduct whole or any part of the tax shall be passedwithin 2years from the end of F/Y in which statementof TDS is filed by the deductor. Whereno such statementis filled , order can be passedup till4 yearsfrom the end of F/Y in which payment is made or credit is given. No time limit have beenprescribedfor order u/s201,(1)wherea) b) c)
there is a caseof defalcationof governmentdues the employee would not have paid tax on such perquisite the deducteeis non resident and it is administratively impossible to recover tax from nonresident.
{0. Due Date of Deposit and Return for TDS Section200 Preparestatementsof TDS for such period as may be prescribedby the government. 41. Processingof statementsof tax deducted at source
it is proposed '/ To provide electronicprocessingon the samelines as processingof incometax returns. '/ Following adjustments can be made during computerized processingand calculating tax interest[e.g.r/s201,(1,A)],and refund due(i) Any arithmetical error in the statements;or (ii) Any incorrect claim, if such incorrect claim is apparent from any informaticin in the statements. E . Provisions for payments and TDS to transportersSection194C No TDS is required to be deducted if payment is made to the transporter provided he furnishes his PAN to the deductor. And Deductor who make payment to the transporter without deducting TDS will be required to intimate PAN details to the Income tax Department. {3. Rate of TDS on Unlisted Debentures or Securitiesor on interest other than securitieshas been reduced from Zlo/otoL0oh {{. TDS to be deducted at basic rates ln order t easethe computation of T^DS the act has removed surcharge and education cess and SHEC on tax deducted on payment made to resident tax payer except in case of salary TDS shall t'e deductible after including education cess and SHEC.
45. Perquisite Section17(2) It also includes:(0 The value of any specified security or sweat equity sharestransferred by an employer frer cost or at concessionalrate. (ii) The amount of any contribution to an approved superannuation fund by the emplo'er respectof the assessee, to extentit exceedsone rakh ..rpu"r. (iii) The value of any other fringe benefit or amenity as may be prescribed.
46. Actual Cost Section43 The actual cos-t.ofany Capital Asset on which deduction has been allowed or is allowable to i assessee u/s 35AD shall be treatedas Nil (i) in caseof such assessee and (ii) in any other caseif the Capitar assetis acquiredor received:(a) by way of gift or will or an irrevocable trust (b) on any distribution on iiquidation of company and by such mode of transfer as is referred to in clause(i), (iv), (v), (vi) (vib) (xiii),(xiv) of sec47.
47' Transactionsnot regardedas transfer section 47(xivl Any transfer of a capital asset in a transaction under reverse mortgage scheme shall not I regarded as transfer and therefore shall not attract .upirur gain tax. Reversemortgage schemeinvolves _ ./ Senior citizen borrower mortgages the self occupied residential house property to a iender. '/ The iender makes Periodic/himp sum payment to the borrower during the iatter,s liietime r' The borrower is not required to servicethe loan during the lifetime and therefore doesnot ma* any monthly repayment of principal and interest to the lender { on the borrower's death otttt tt e.uo.ro*".i"urrir'rg ,t house property permanentlr-,the loan is repaid along with accumuratedinterest, thro.rgh'rule" of house property '/ The borrow et /heit's can also repay or prepay tl* loun with accumrrLt"d interest and har-ethe mortgage releasedwithout resorting to sale of property
48. Cost of Acquisition for sweat equity shares where the capital gain arises from tire transfer of specified securify or sweat equity sharesreterre in sec17(2)(vi), the cost of acquisitionof such ,""r.rriiyo. sharesshall be FMv. 49. Income not included in total income Section10 A new clause (43) has been inserter to provide any loan amount received whether in lump su* o in installment under reversemortgage icheme, shall not be included in total income. 50. Basisofcharge Section2g Following incomes are also chargeable under the head 'profits ancl Gains of business o profession':Any sum, whether receir-edor receir.able_
45. Perquisite Section17(2) It also includes:-
(i) n:;::1"":fy;n:tl'u",0.'"""'itv (ii) (iii)
or sweatequitysharestransferred by an employerfra
The amount of any contribution to an approved superannuation fund by the emplo'er respectof the assessee, to extentit exceedsone lakh ..rp""r. The value of any other fringe benefit or amenity as may be prescribed.
46. Actual Cost Section43 The actual tot-t:1any capital Asset on which deduction has been allowed or is allowabie to 1 assessee u/s 35AD shall be treatedas Nil (i) in caseof such assessee and (ii) in any other caseif the Capital assetis acquiredor received:_ (a) by way of gift or will or an irrevocable trust (b) on any distribution on liquidation of company and by such mode of transfer as is referred to in clause (i), (iv), (v), (vi) (vib) (xiii),(xiv) of sec47.
47. Transactionsnot regardedas transfer Section 47(xivl Any transfer of a capital asset in a transaction under reverse mortgage scheme shall not I regardedas transferand thereforeshal not attract.upirut gain tax. Reversemortgageschemeinvolves _ ,/ Senior citizen borrower mortgages the self occupied residential house property to a iender. '/ The iender makes periodic/himp sum payment to ;;;;;r;d; rhe ratter,srtetim" '/ The borrower is not required to service the loan during the lifetime and therefore doesnot maany monthly repayment of principar and interest to the lender '/ on the borrower's death o. or, tne.uorrower i";;i"; the house property permanentlr-,/ the uts ri loan is repaid along with accumulatedinterest, thro.lgh'sale of house prop"r,fr-'/ The borrower/heir's can also repay or prepay th! ioul with accumrrLt"a interest and har-ethe mortgage releasedwithout resorting to sale of p.op".ty
48. Cost of Acquisition for sweat equity shares \Arherethe capital gain arises from tiretransfer of specified security or sweat equity sharesreterre in sec17(2)(vi), the cost of acquisitionof such ,"..r.iiyo. sharesshall be FMV. 49. Income not included in total income Section10 A new clause (43) has been inserter to provide any loan amount received whether in lump sum o in installment under reversemortgage icheme, shall not be included in total income. 50. Basisofcharge Section2g Following incomes are also chargeable under the head 'profits anci Gains of business o. profession':Any sum, whether receir.edor receir-able_
