Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: cpt :: ACCOUNTING STANDARD :: ARTICLES ON INPUT TAX CREDIT IN VAT :: VAT RATES :: form 3cd :: Central Excise rule to resale the machines to a new company :: empanelment :: due date for vat payment :: TDS :: TAX RATES - GOODS TAXABLE @ 4% :: articles on VAT and GST in India :: ACCOUNTING STANDARDS :: list of goods taxed at 4% :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: VAT Audit
 
 
Direct Tax »
 CBDT signifies achievements towards eliminating domestic black money
 Seafarers get tax exemption from Ministry of Finance
 Financial institutions need to get accounts self-certified for FATCA by April 30
 Direct tax incentives to promote start-ups
 Employer didn't deposit the TDS it deducted on your salary. How to claim it?
 Central Board of Direct Taxes clarifies on cash curb, Aadhaar
 CBDT to issue PAN, TAN within a day to improve Ease of Doing Business
 Expats who stayed in India for 182 days or more must apply for Aadhaar card: CBDT
 CBDT accomplishes direct taxes collection target for FY 2016-17
  No relief to those who defaulted on 1st IDS installment: CBDT
 New Income Tax forms: What information is being asked for? All you want to know about the new rules

Direct tax: no great expectations
February, 15th 2010

It is that time of the year when we gear up and submit suggestions to the finance minister for his consideration in the upcoming budget. From the direct tax perspective, there are no high expectations from the budget this year because of the much-awaited Direct Tax Code proposed to be effective from April 1, 2011. The current tax regime is just a stopgap arrangement for this year and, thus, all amendments in the present law will be short-lived.

From the direct tax perspective, a few aspects that the common man may look forward in the upcoming budget are:

Rationalisation of the income tax exemption limit and tax slabs: In India, the income level on which tax at a maximum marginal rate is levied, is far lower compared with a large number of developing and emerging economies. On the other hand, the prices of essential commodities are skyrocketing.

Therefore, relief must be provided by attempting to reduce the prices and also by ensuring more disposable income to counter the problem of inflation. The most impeccable solution would be to enhance the basic exemption limit and the income slabs as shown in Table 1.

Increase in the conveyance allowance limit for employees: At present, conveyance allowance is exempt up to Rs 800 per month. With the increase in fuel prices, this threshold should be increased in the range of Rs 3,000-3,500. Similarly, there is a need to rationalise the exemption limit for children education allowance, hostel expenditure allowances, etc.

Increase in gratuity limit: Under the existing law, gratuity received by a non central government employee to the extent of Rs 3.5 lakh is tax free. For central government employees, the exemption is Rs 10 lakh. There have been various representations to the government to increase the exemption for gratuity to Rs 10 lakh for all.

Enhance the quantum of deduction under section 80C: The government should give more emphasis on savings to secure life after retirement and such impetus can be given by increasing the quantum of deduction to Rs 3 lakh from a meagre Rs 1 lakh.

Enhance the exemption limit on medical benefits: Exemption of expenses incurred on medical treatment and reimbursed by employer should be raised from Rs 15,000 yearly to at least Rs 30,000 yearly.

Discrepancy in the age for senior citizens: The discrepancy in the age for senior citizens specified under the income-tax legislation (65 years) and other government departments (60 years) should be removed. Such a measure would help to avoid hardships on people retiring at 60 but paying high taxes on pension till the age of 65.

The common mans wish list is endless and the irony is that all of these have now become a necessity. The finance minister has a tough job as he has to consider the prospects and consequences of each amendment and then take a decision that suits the larger national interest. However, it wont be apt to expect that all these will find a mention in this years budget. Even if some do make their way, it will be a great relief!

SUSHMITA BASU (ASSOCIATE DIRECTOR) AND AMIT PATNI (MANAGER) ARE FROM PWC'S TAX AND REGULATORY SERVICES TEAM

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Our Mission

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions