BUDGET 2009 - 2010

India Union Budget 2009-2010 Hightlights Exemption limit Changed For Senior Citizens - Now Rs 240,000 For Women - Now Rs.190,000 For Others - Rs 160,000 Finance minister Pranab Mukherjee begins presentation of Union Budget 2009-10 in Lok Sabha. Some of the major excerpts of the budget speech are: Excise duty on fibre for cheaper cloth reduced Excise duty on petrol-driven small trucks reduced to 10% 100% deduction in donation to electoral trusts Service tax to be levied on law firms Exemption of duty on goods made at construction sites restored Drugs for heart diseases to become cheaper Customs duty on gold and silver import increased Customs duty of 5% being levied on import of set-top boxes Drugs for heart diseases to become cheaper Customs duty on gold and silver import increased Commodities Transaction Tax to be rolled back Exemption of duty on goods made at construction sites restored Mobile phone accessories to become cheaper New direct tax code in 45 days Set-top boxes to cost more Anonymous funds to charitable bodies to get some tax relief Small businesses exempt from advance tax Custom duty on LCD panels halved Customs duty on bio-diesel reduced Tax holiday extended for textile units Total budget expenditure for 2009-10 will Rs 10,28,032 cr Higher public investment in infrastructure One lakh dwelling units for paramilitary forces to be built Allocation for rehab of Lankan Tamils New pension benefits for 12 lakh jawans and JCOs Pension of non-commissioned officers to be hiked Defence outlay has gone up Fringe Benefit Tax to be scrapped Eliminate the surcharge on personal Income tax by 10% Hike in IT exemption for women to Rs 1,90,000 Hike in IT exemption to Rs 2,40,000 for senior citizens General Sales Tax model will have a Central GST and State GST GST to come into effect from April 01, 2010 Corporate tax unchanged Interest subsidy on students' loans in higher education Rs 1,000 cr for Aila rehabilitation programme to West Bengal Rs 25 cr each for AMU campuses in Murshidabad and Mallapuram Rs 2,113 cr for IITs and NITs Government to spend Rs.12K cr on rural roads in FY'10 Commonwealth allocation hiked to Rs 16,300 cr Govt to hike allocation to National Ganga Project to Rs 562 cr Rs 7000 cr for rural electrification Rice, wheat at Rs 3 per kg to the poor One rank, one pension for ex-servicemen from July 1 Allowances to para-military forces at par with defence forces Unique Identification ID project to tap private talent National action plan on climate change Full interest subsidy for students in approved institutions Modernisation of national employment exchanges 50% cent of rural women in self-help groups Real wage of Rs.100/day provided under NREGA Allocation of Rs 50 cr to Chandigrah University Rs 100 cr one-time grant to expand banks in unbanking areas Allocation for PM Gram Sadak Yojna up by 59 per cent Work on National Food Security scheme for subsidised food Government to shift to nutrient based fertiliser subsidy regime Rural mega clusters in Bengal and Rajasthan Interest subsidy on education loans National Mission for female literacy Rural mega clusters in Bengal and Rajasthan Interest subsidy for home loans up to Rs 1 lakh LNG infrastructure in the country being expanded Government to introduce food security bill Scheduled commercial bks can set up offsite ATM Will create close to 12 million jobs Institutional refo reform measures to stabilise BOP Aiming for direct transfer of subsidy to farmers Rs 4000cr fund to incentivise banks & SFCs to lend To provide all possible relief to exporters Banking network to be expanded One banking centre in every bloc Rs 31,100 crore allocation for NREGA NREGA gave employment opportunities to more than 4.479 cr households Banks, insurance to stay with Government Raise threshold for non-promoter public listed companies Indira Awaas Yojna hiked by 63% to Rs 8,883 cr 1% int subvention to farmers making timely payment Allocation to NHAI increased by 23% An expert group will look into petroleum product pricing GDP grew at 6.7% in 2008-09 Move towards energy security via Integrated Energy Act Saral-II forms to simplify taxation process Domestic oil prices must be in sync with global prices Raise threshold for non-promoter public listed companies Hike in allocation for Mumbai flood management LNG infrastructure in the country being expanded Total fiscal stimulus during '08-09 is Rs 1,86,000 cr Set up a task force for farmer lending Allocation of Rashtriya Krishi Vikas Yojna stepped up by 30% Additional budget allocation to farmers Will ensure farm sector growth at 4% Need to strengthen improve regulatory framework Private investment has been the key growth driver FIIs have returned to India in last few months Print media stimulus package extended by six months Target for agriculture credit raised to Rs 3,25,000 cr in 2009-10 Export Credit Guarantee scheme extended till March 2010 Incentives in interest rates to farmers to pay back Agriculture loans in time Storm-water drainage project fund hiked to Rs 500 cr Blueprint for national gas grid IIFCL will refinance 60% of commercial bank loans in PPP IIFCL will look at new projects IIFCL will also look at incremental lending by banks JNNURM allocation hiked by 87 per cent Hike infrastructure investment to over 9% of GDP by 2014 Fund alloction for urban poor accommodation is 3,973,000 cr Housing allocation hiked under Rajiv Gandhi Rozgar Yojana Trade in goods and services doubled in 2008 Significant hike in foreign capital Need to reduce population below poverty line New company IIFCL to look at infrastructure needs Signs of revival in the domestic industry Fiscal stimulus gave economy a boost Govt took 3 stimulus packages to fight slowdown Read more ...

TAX RATES A.Y 2009-10

The Income Tax rates for A. Y. (Assessment year) 2009-10 are as follows:- A. Individuals and HUFs In case of individual (other than II and III below) and HUF:- Income Level Income Tax Rate i. Where the total income does not exceed Rs.1,50,000/-. NIL ii. Where the total income exceeds Rs.1,50,000/- but does not exceed Rs.3,00,000/-. 10% of amount by which the total income exceeds Rs. 1,50,000/- iii. Where the total income exceeds Rs.3,00,000/- but does not exceed Rs.5,00,000/-. Rs. 15,000/- + 20% of the amount by which the total income exceeds Rs.3,00,000/-. iv. Where the total income exceeds Rs.5,00,000/-. Rs. 55,000/- + 30% of the amount by which the total income exceeds Rs.5,00,000/-. II. In case of individual being a woman resident in India and below the age of 65 years at any time during the previous year:- Income Level Income Tax Rate i. Where the total income does not exceed Rs.1,80,000/-. NIL ii. Where total income exceeds Rs.1,80,000/- but does not exceed Rs.3,00,000/-. 10% of the amount by which the total income exceeds Rs.1,80,000/-. iii. Where the total income exceeds Rs.3,00,000/- but does not exceed Rs.5,00,000/-. Rs. 12,000- + 20% of the amount by which the total income exceeds Rs.3,00,000/-. iv. Where the total income exceeds Rs.5,00,000/- Rs.52,000/- + 30% of the amount by which the total income exceeds Rs.5,00,000/-. III. In case of an individual resident who is of the age of 65 years or more at any time during the previous year:- Income Level Income Tax Rate i. Where the total income does not exceed Rs.2,25,000/-. NIL ii. Where the total income exceeds Rs.2,25,000/- but does not exceed Rs.3,00,000/- 10% of the amount by which the total income exceeds Rs.2,25,000/-. iii. Where the total income exceeds Rs.3,00,000/- but does not exceed Rs.5,00,000/- Rs.7,500/- + 20% of the amount by which the total income exceeds Rs.3,00,000/-. iv. Where the total income exceeds Rs.5,00,000/- Rs.47,500/- + 30% of the amount by which the total income exceeds Rs.5,00,000/-. Further, the amount of income tax as computed in accordance with above rates, and after being reduced by the amount of tax rebate shall be increased by a surcharge at the rate of 10% of such income tax, provided that the total income exceeds Rs. 10 lacs. Thus, in case of individuals/HUFs no surcharge shall be payable if the total income is below Rs.10 lacs. The tax and surcharge, if any, are to be further enhanced by education cess levied @ 3% from A. Y. 2008-09 onwards. B. Association of Persons (AOP) and Body of Individuals (BOI) i. Income-tax: Income Level Income Tax Rate i. Where the total income does not exceed Rs.1,50,000/-. NIL ii. Where the total income exceeds Rs.1,50,000/- but does not exceed Rs.3,00,000/-. 10% of amount by which the total income exceeds Rs. 1,50,000/- iii. Where the total income exceeds Rs.3,00,000/- but does not exceed Rs.5,00,000/-. Rs. 15,000/- + 20% of the amount by which the total income exceeds Rs.3,00,000/-. iv. Where the total income exceeds Rs.5,00,000/-. Rs. 55,000/- + 30% of the amount by which the total income exceeds Rs.5,00,000/-. ii. Surcharge: The amount of income tax as computed in accordance with above rates, and after being reduced by the amount of tax rebate shall be increased by a surcharge at the rate of 10% of such income tax, provided that the total income exceeds Rs. 10 lacs. iii. Education Cess: 3% of the total of Income-tax and Surcharge. C. Co-operative Society i. Income-tax: Income Level Income Tax Rate i. Where the total income does not exceedRs. 10,000/-. 10% of the income. ii. Where the total income exceeds Rs.10,000/- but does not exceed Rs.20,000/-. Rs. 1,000/- + 20% of income in excess of Rs. 10,000/-. iii. Where the total income exceeds Rs.20,000/- Rs. 3.000/- + 30% of the amount by which total income exceeds Rs.20,000/-. ii. Surcharge: Nil iii. Education Cess: 3% of the Income-tax. D. Firm i. Income-tax: 30% of total income. ii. Surcharge: The amount of income tax as computed in accordance with above rates, and after being reduced by the amount of tax rebate shall be increased by a surcharge at the rate of 10% of such income tax, provided that the total income exceeds Rs. 1 crore. iii. Education Cess: 3% of the total of Income-tax and Surcharge. E. Local Authority i. Income-tax: 30% of total income. ii. Surcharge: Nil iii. Education Cess: 3% of Income-tax. F. Domestic Company i. Income-tax: 30% of total income. ii. Surcharge: The amount of income tax as computed in accordance with above rates, and after being reduced by the amount of tax rebate shall be increased by a surcharge at the rate of 10% of such income tax, provided that the total income exceeds Rs. 1 crore. iii. Education Cess: 3% of the total of Income-tax and Surcharge. G. Company other than a Domestic Company i. Income-tax: @ 50% of on so much of the total income as consist of (a) royalties received from Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 31st day of March, 1961 but before the 1st day of April, 1976; or (b) fees for rendering technical services received from Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 29th day of February, 1964 but before the 1st day of April, 1976, and where such agreement has, in either case, been approved by the Central Government; @ 40% of the balance ii. Surcharge: The amount of income tax as computed in accordance with above rates, and after being reduced by the amount of tax rebate shall be increased by a surcharge at the rate of 2.5% of such income tax, provided that the total income exceeds Rs. 1 crore. iii. Education Cess: 3% of the total of Income-tax and Surcharge. Read more ...

TDS notifications

March, 25th 2009 NOTIFICATION NO. 31/2009[F.NO.142/22/2008-TPL]/S.O.858(E), DATED 25-3-2009 In exercise of the powers conferred by section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:- (1) These rules may be called the Income-tax (Eight Amendment) Rules, 2009. (2) They shall come into force on the 1st day of April, 2009 2. In the Income-tax Rules, 1962, - (a) for rules 30, 31, 31A and 31AA, the following rules shall be substituted, namely:-Time and mode of payment to Government account of tax deducted at source or tax paid under Chapter XVII-B 30. (1) All sums deducted in accordance with the provisions of Chapter XVII-B shall be paid to the credit of the Central Government (a) within two months from the end of the month in which the amount is credited by the payer to the account of the payee if the crediting is on the date up to which the accounts of the payer are made; and (b) in any other case, within one week from the end of the month in which the- (i) deduction is made; or (ii) income-tax is due under sub-section (1A) of section 192. (2) Notwithstanding anything contained in sub-rule (1), the Assessing Officer may permit, in special cases, - (a) quarterly payment of the amount on June 15, September 15, December 15 and March 15 if the amount is deducted from any income chargeable under the head Salaries; and (b) quarterly payment of the amount on July 15, October 15, January 15 and April 15 if the amount is deducted from any income by way of-(i) interest, other than interest on securities; (ii) insurance commission; or (iii) commission or brokerage referred to in section 194H. (3) No permission under sub-rule (2) shall be granted without the prior approval of the Joint Commissioner. (4) The person responsible for making deduction, or payment of tax, under Chapter XVII-B shall, within the time specified in sub-rule (1), or sub-rule (2), - (a) electronically furnish an income-tax challan in Form No.17; and (b) pay the amount so deducted to the credit of the Central Government by electronically remitting it into the Reserve Bank of India, State Bank of India or any authorised bank. (5) For the purposes of this rule, the amount shall be construed as electronically remitted to the Reserve Bank of India or of the State Bank of India or of any authorised bank, if the amount is remitted by way of (a) internet banking facility of the Reserve Bank of India or of the State Bank of India or of any authorised bank; or (b) credit or debit card. Certificate of tax deducted at source or tax paid under sub-section (1A) of section 192 31. (1) The certificate of deduction of tax at source or, the certificate of payment of tax by the employer on behalf of the employee, under section 203 shall be in (a) Form No.16 if the deduction or, payment of tax, is under section 192; and (b) Form No.16A if the deduction is under any other provision of Chapter XVII-B. (2) The certificate referred to in sub-rule (1) shall be furnished to the deductee- (a) within one week after the date on which the sum of tax deducted at source is paid to the credit of the Central Government if the payment in respect of which the tax so deducted is by way of crediting on the date upto which the accounts of the deductor are made; (b) within one month from the end of the financial year in which the payment is made to the deductee if- (c) (i) the deduction of tax is made under sub-section (1) of section 192; (ii) the certificate relates to payment of tax by the employer on behalf of the employee under section (1A) of section 192; (iii)the deduction of tax is made under section 194D; or (iv) more than one certificate is required to be furnished to a deductee for deductions of income-tax made during a financial year and the deductee has requested for issue of a consolidated certificate in respect of such deductions; (c) within fourteen days from the date of payment of income-tax if the payment is made quarterly under sub-rule (2) of rule 30; (d) within one month from the end of the month in which the deduction of tax at source is made, in all other cases. (3) The deductor may issue a duplicate certificate in Form No.16 or Form No.16A, as the case may be, if the deductee has lost the original certificate so issued and makes a request for issuance of a duplicate certificate and such duplicate certificate is certified as duplicate by the deductor. (4) The Assessing Officer, before giving credit for the tax deducted at source on the basis of duplicate certificate referred to in sub-rule (3), shall- (a) obtain an Indemnity Bond from the deductee; and (b) get the payment certified by the Assessing Officer designated in this behalf by the Chief Commissioner or the Commissioner. Quarterly statement of deduction of tax or collection of tax 31A. (1) Every person who has been allotted a tax deduction and collection account number under section 203A shall deliver, or cause to be delivered the following quarterly statements; namely:- (a) the TDS Compliance Statement in Form No.24C; (b) (b) the Quarterly Statement of deduction of tax under section 192 in Form No.24Q; (c) the Quarterly Statement of deduction of tax under sections 193 to 196D in- (i) Form No.27Q in respect of the deductee other than a company, being a non-resident or resident but not ordinarily resident, or the deductee being a foreign company; and (ii) Form No.26Q in respect of all other deductees; and (d) the Quarterly Statement for collection of tax under section 206C in Form No.27EQ. (2) Every person, who is required to deliver, or cause to be delivered, under sub-rule (1), the statements referred to therein, shall deliver, or cause to be delivered, such statements electronically to the Director General of Income Tax (Systems) or the person authorised by the Director General of Income Tax (Systems). (3) The statement in Form No.24C referred to in sub-rule (1), shall be delivered, or caused to be delivered, on or before the 15th July, the 15th October, the 15th January in respect of the first three quarters of the financial year, respectively, and on or before the 15th June following the last quarter of the financial year. (4) The statements in Form No.24Q, Form No.26Q, Form No.27Q and Form No.27EQ referred to in sub-rule(1), shall be delivered, or caused to be delivered, on or before the 15th June following the financial year.; (b) rule 37A shall be omitted; (c) for rules 37CA and 37D, the following rules shall be substituted, namely:- Time and mode of payment to Government account of tax collected at source under Chapter XVII-BB 37CA. (1) All sums collected in accordance with the provisions of Chapter XVII-BB shall be paid to the credit of the Central Government within one week from the end of the month in which the collection is made. (2) The person responsible for making collection under Chapter XVII-BB shall, within the time specified in sub-rule (1), - (a) electronically furnish an income-tax challan in Form No.17; and (b) pay the amount so collected to the credit of the Central Government by electronically remitting it into the Reserve Bank of India, State Bank of India or any authorised bank. (3) For the purposes of this rule, the amount shall be construed as electronically remitted to the Reserve Bank of India or of the State Bank of India or of any authorised bank, if the amount is remitted by way of (a) internet banking facility of the Reserve Bank of India or of the State Bank of India or of any authorised bank; or (b) credit or debit card. Certificate of Tax Collected at Source 37D. (1) The certificate of collection of tax at source under sub-section (5) of section 206C shall be in Form No.27D. (2) The certificate referred to in sub-rule (1), shall be furnished to the deductee within one month from the end of the month in which the amount is debited to the account of the buyer or licensee or lessee or payment is received from the buyer or licensee or lessee, as the case may be. (3) The person responsible for collecting tax at source may issue a duplicate certificate in Form No.27D, if the buyer or licensee or lessee has lost the original certificate so issued and makes a request for issuance of a duplicate certificate and such duplicate certificate is certified as duplicate by the person responsible for collecting tax at source. (4) The Assessing Officer, before giving credit for the tax collected at source on the basis of duplicate certificate referred to in sub-rule (3), shall- (a) obtain an Indemnity Bond from the buyer or licensee or lessee; and (b) get the payment certified by the Assessing Officer designated in this behalf by the Chief Commissioner or the Commissioner.; (d) for Form No.16, Form No.16A and Form No.16AA, the following forms shall be substituted, namely. Read more ...

TDS sections

Types of income subject to deduction of tax at source 1.The following types of incomes are mainly subject to deduction of tax at source : (a) Salaries — Section 192. (b) Interest on securities — Section 192. (c) Dividend - Section 194. (d) Other interest — Section 194A. (e) Winnings from Lottery or crossword puzzle — Section 194B. (f) Winning from horse race — Section 194BB. (g) Payment to resident contractors and sub-contractors — Section 194C. (h) Insurance commission — Section 194D. (i) Payments to non-resident sportsmen or sports associations — Section 194E. (j) Payments in respect of deposits under the N.S.S. — Section 194EE. (k) Payments on account of repurchase of units by Mutual Fund or UTI — Section 194F. (l) Commission, etc., on the sale of lottery tickets — Section 194G. (m) Commission or brokerage — Section 194H. (n) Rent exceeding Rs. 1,20,000 — Section 194 I. (o) Fees for professional or technical services — Section 194J. (p) Income from UTI units and Mutual Funds — Section 194K (q) Other sums payable to non-residents and non-Indian companies only — Section 195. (r) Income from units — Section 196B. (s) Income from foreign currency bonds or shares of Indian company — Section 196 C. (t) Income of foreign institutional investors from Securities — Section 196D End., Read more ...

PF AND ESI

2. PF AND ESI : The PF contribution is 12% of Basic salary from both employee and employer. For the calculation the maximum limit of Basic is Rs 6500/-. It means even if the employee's basic salary is above Rs 6500/- the employer is liable to contribute only on Rs 6500/-, that is Rs 780. However if an employee so desires he may voluntarily contribute more than 12%. Apart from it an employer also has to pay some administration charges. I explain you the various accounts of PF challan. A/c No 1: PF contribution Account A/c No 2: PF Admin account A/c No 10: EPS account A/c No 21: EDLIS account A/c No 22: EDLIS admin account PF admin charge = Employer has to pay 1.1 % of basic EDLIS: Employer has to pay 0.5% of basic EDLIS admin charge:Employer has to pay 0.01% of basic Total additional percentage employer has to pay: 1.61% of basic So employer has actually to pay 13.61 % of Basic and employee has to pay only 12% of basic. Employees complete 12% goes to PF account while employer contributions' 8.33% goes to Pension fund and 3.67% goes to PF fund. End., Read more ...

TDS calculator F.Y 09 - 10 & F.Y 10 - 11

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Service tax on Rent

Mumbai: Renting premises for business will not invite levy of service tax, the Delhi High Court has ruled. A division bench comprising Justice B D Ahmed and Justice Rajiv Shakdher passed the order on as many as 26 writ petitions filed by retail majors such as Shopper's Stop, Lifestyle International and Fun Multiplex, challenging the notification issued by the finance ministry in 2007 vide which rent was made taxable. "We hold that law does not in terms entail that renting out of immovable property for use in the course of furtherance of business or commerce would by itself constitute a taxable service and be eligible to service tax," Justice Ahmed said, disposing of the petitions. The Finance Act of 2007 had introduced Section 65(105)(zzzz) levying service tax on renting, letting, leasing, licensing or other similar arrangements of immovable property for use in the course of furtherance of business or commerce. The levy, which was made effective from June 1, 2007, also includes part of building and land, common or shared areas and facilities; common areas and facilities of a building located in a complex or industrial estate. The court concluded that since lease or levy or license or any other similar arrangement in relation to immovable property does not amount to rendering of a "service", no tax can be levied under the taxable entry of the said Section 65(105)(zzzz). "The interpretation placed by the impugned notification and circular on the said provision is not correct." "Consequently, the same is ultra vires the said Act and to the extent that they authorised the levy of service tax on renting of immovable property per se, they are set aside," the court said, striking down the notification. Following the landmark ruling, landlords who have not collected but paid service tax can apply for refund of service tax paid by them in the last one year, subject to such applicant being able to show that he has not collected the tax from the lessee/ licensee. Where the tax has been collected from the lessee/ licensee, such lessee/ licensee can also apply for refund of the service tax paid in the last one year, subject to the lessee/ licensee being able to show that he has not passed on the burden of the tax. The government has 90 days to file an appeal against the order of the High Court. Read more ...