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: TAX RATES - GOODS TAXABLE @ 4% :: articles on VAT and GST in India :: VAT Audit :: ARTICLES ON INPUT TAX CREDIT IN VAT :: due date for vat payment :: Central Excise rule to resale the machines to a new company :: empanelment :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: form 3cd :: VAT RATES :: ACCOUNTING STANDARD :: list of goods taxed at 4% :: ACCOUNTING STANDARDS :: TDS :: cpt
 
 
« Direct Tax »
 Economists for raising direct tax in budget
 Requirement of tax deduction at source in case of entities whose income is exempted under Section 10 of the Income-tax Act, 1961
 CBDT committee to review 'naming, shaming' of tax defaulters
 CBDT committee to review ‘naming, shaming’ of tax defaulters
 Can we measure demonetisation’s impact on income tax collections?
 CBDT signs 2 more advance pricing pacts
 Income tax returns: How to calculate income from house property
 CBDT proposes new accounting standards for real estate firms
 1 lakh entities face I-T action as ‘clean money’ drive gains pace
 Here are 4 things to know about how CBDT improves ease of doing business by issuing PAN and TAN within 1 day
 Online platforms make tax filing easy, help fill details automatically

Know the New Direct Tax Code!
February, 10th 2010

BankBazaar.com

The New Direct Tax Code is proposed to be implemented from the year 2011. For its smooth implementation, changes in the present system have to be made on an on going basis. The forth coming budget may thus be expected to bring about some of the changes for a smoother transition. This article will focus on the impact of the forthcoming budget and the New Direct Tax code with respect to individuals only.

Personal Income Tax Rates

The New Direct Tax Code talks of substantial increase in the tax slabs for an individual tax assessee. A part of this may be implemented in forthcoming budget. The Tax Code Bill 2009 talks of increasing the 10% slab to Rs 10 lakhs, 20% slab between Rs 10 lakhs and Rs 25 lakhs and 30% above Rs 25 lakhs.

The difference between the current slabs and the New Direct Tax Code is very high. The gap may be bridged at least to the mid way or even slightly higher in this budget.

Perks to be taxed

Perks to be Part of Salary This will negate the increase in the tax slabs to some extent. The impact will be felt by all salaried persons as currently items like Leave Travel Allowance, House Rent Allowance and Medical Reimbursement can be tax free (or less taxed) if supporting expenses documents are provided. This budget may not make any sweeping changes in this area, as the New Direct Tax Code proposed taxable slabs may not be implemented in full.

Reduction in Wealth Tax

Currently Wealth tax is at the rate of 1%. This is proposed to be reduced to 0.25% in the New Tax Code. This may be implemented immediately in the budget. The need of the hour is to increase the number of people who pay wealth tax. The current compliance is very less.

To better the compliance the slab for the wealth tax has been proposed to be increased to Rs.50 crores. This is a huge jump from the current Rs.30 lakhs.

Investments limit under 80C to go up

80C Limit Increase

It is proposed in the New Direct Tax Code to increase the 80C limit to Rs 3 lakhs from the current Rs 1 lakh. There may be a marginal increase in this limit in the current budget. The increase in limit is proposed to be applicable to individuals and HUFs (Hindu Unified Families).

EET (Exempt - Exempt - Tax)

The New Direct Tax Code talks of talks of going for EET for most of the favoured investment and savings avenues of Indians today. Life insurance, provident funds and superannuation are the schemes that will be affected. The New Pension Scheme had at the time of launch itself been under the EET regime. The budget 2010 may include some of the others also in the EET scheme of taxation.

The benefit to investors however is given by the making the shifting of investment from one eligible scheme to another eligible scheme not taxable.

Separate Capital Gains Tax rate to be removed

Change in Rate of Capital Gains

The New Direct Tax Code proposes to remove the concept of a separate Capital Gains Tax rate and tax capital gains at the applicable income rate itself. This concept may be implemented during this budget itself, incase the tax slabs are sufficiently raised.

Rent Deduction Reduction

In case of rental income 30% was the deduction allowed for maintenance of the property. The New Direct Tax code plans to reduce this to 20%.

Any service tax paid for receiving services related to the house property is deductible. This is a feature which is currently not available on any income for individuals.

The current budget may implement the rent deduction reduction immediately. This will affect those who depend on rental income as their primary source of income. However the limit hike in the wealth tax and the service tax benefit will offset the increase in the rental income in a big way.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Website Ranking Website Ranking Company Website Positioning Alexa Ranking Website Promotion Website top 10 ranking website top 10 promotion search engine result promotion Strategic Internet Marketing Website Optimization Website Ranking Factors

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