Budget 2010 Highlights Income Tax
Budget 2010 Highlights Income Tax
Budget 2010 Highlights Income Tax
IMPORTANT
HIGHLIGHTS
OF
Compiled by CA. Pankaj Somaiya, Bcom, FCA, DISA (ICA) for private circulation only. 1
(This compilation is only for lucid understanding of budget any detailed matter should be discussed
personally.)
M/s Pankaj Somaiya & Associates Ph: 07325-252169
Chartered Accountants Mobile: 9826075799
¾ The MAT rate is proposed to be increased from 15% to 18%. The effective MAT rates
after giving effect to surcharge will be as follows
¾ Lowering the burden on the individual taxpayers by increasing the Tax Slabs
bandwidth available to the tax payers
In case of senior citizens (above 65 years of age) the initial threshold limit is
2,40,000.00 below which there income is not taxable.
¾ The proposed changes in tax slabs would result in maximum savings of Rs.
51,500.00
Compiled by CA. Pankaj Somaiya, Bcom, FCA, DISA (ICA) for private circulation only. 2
(This compilation is only for lucid understanding of budget any detailed matter should be discussed
personally.)
M/s Pankaj Somaiya & Associates Ph: 07325-252169
Chartered Accountants Mobile: 9826075799
TDS Provisions
¾ Earlier in order to claim TDS deduction the tax deducted must have to be paid
deposited in the bank up to 7th of the next month and in case of last month of financial
year upto date of filling of return. From the financial year 2009-10 this clause is
proposed to be amended so that tax deducted in any month can be deposited upto
date of filling of return and TDS can be claimed for that year as is the case with TDS
deducted in the last month of the financial year. However such benefit of extended
time limit is not available to payments made to non-residents/ foreign companies.
deduct tax at source, results in levy of interest @ 1% per month (12% per annum)
from the date tax was deductible till the date the same is actually paid. It is proposed
that with effect from 1 July 2010, the rate of interest shall be as follows:
a. 1% per month (12% per annum) from the date tax was deductible (but not
deducted) upto the date on which such tax has actually been deducted; and
b. 1.5% per month (18% per annum) from the date the tax is actually deducted
upto the date when the same is actually paid.
¾ Under the existing provisions of sections 203 and 206C, the requirement of
furnishing certificate for TDS / TCS was dispensed with w.e.f. April 1, 2010.
Considering the fact that the TDS / TCS certificate constitutes an important
document for the deductee / collectee, it is proposed that the deductor / collector
shall continue to issue physical TDS / TCS certificates even after 31 March, 2010.The
intention appears to be to avoid hardship which the taxpayer sometimes face not
being able to claim the TDS amounts due to non-availability of requisite data in the
online systems of the Tax Department.
¾ The tax audit limit under section 44AB is proposed to be increased from Rs.
40,00,000 to Rs. 60,00,000 in case of persons carrying on business, and from Rs.
10,00,000 to Rs 15,00,000 in case of persons carrying on profession. Further, penalty
for failure to get the accounts audited proposed to be increased from Rs. 1,00,000 to
Rs.1,50,000
Compiled by CA. Pankaj Somaiya, Bcom, FCA, DISA (ICA) for private circulation only. 4
(This compilation is only for lucid understanding of budget any detailed matter should be discussed
personally.)
M/s Pankaj Somaiya & Associates Ph: 07325-252169
Chartered Accountants Mobile: 9826075799
Compiled by CA. Pankaj Somaiya, Bcom, FCA, DISA (ICA) for private circulation only. 5
(This compilation is only for lucid understanding of budget any detailed matter should be discussed
personally.)
M/s Pankaj Somaiya & Associates Ph: 07325-252169
Chartered Accountants Mobile: 9826075799
¾ In case of individuals / HUF, deduction upto INR 20,000/- has been proposed for
investments made in notified long term infrastructure bonds. This deduction is in
addition to the combined deduction of upto Rs.1,00,000 available under sections 80C,
80CCC and 80CCD. The benefit of this deduction is currently proposed only in
relation to investments made during the FY 2010-11.
Compiled by CA. Pankaj Somaiya, Bcom, FCA, DISA (ICA) for private circulation only. 6
(This compilation is only for lucid understanding of budget any detailed matter should be discussed
personally.)
M/s Pankaj Somaiya & Associates Ph: 07325-252169
Chartered Accountants Mobile: 9826075799
¾ Under the existing provisions of section 56 (Income from other sources), any sum
of money or any property in kind which is received without consideration or for
inadequate consideration (in excess of INR 50,000/-) by an individual or an HUF
is taxable in the hands of recipient. However, receipts from relatives or on the
occasion of marriage or under a will are outside the scope of this provision.
¾ In order to curb the practice of transferring unlisted shares at prices below their
fair market value, it is proposed to tax transactions relating to transfer of unlisted
shares of a company to a firm or to a company, without or for an inadequate
consideration, with effect from June 01, 2010. The same would be taxable in the
hands of the recipient firm / resident company, subject to any treaty benefits as
may be available to any foreign recipient firm / company.
Compiled by CA. Pankaj Somaiya, Bcom, FCA, DISA (ICA) for private circulation only. 7
(This compilation is only for lucid understanding of budget any detailed matter should be discussed
personally.)
M/s Pankaj Somaiya & Associates Ph: 07325-252169
Chartered Accountants Mobile: 9826075799
that such receipt of immovable property shall be considered taxable only if the
property is received without consideration and shall exclude cases where the property
is received for inadequate consideration.
¾ Under the existing provisions of the Act, the Settlement Commission shall pass an
order within 12 months from the end of the month in which the application is made. It
is proposed that in respect of applications filed on or after 1st June, 2010, the
Settlement Commission shall pass the orders within 18 months from the end of the
month in which the application is made.
¾ It is proposed to specifically provide that the High Court has power to admit
an appeal even after the expiry of the period stipulated in the Act provided it is
satisfied that there is sufficient cause in delay in filing of the appeal.
Compiled by CA. Pankaj Somaiya, Bcom, FCA, DISA (ICA) for private circulation only. 8
(This compilation is only for lucid understanding of budget any detailed matter should be discussed
personally.)