Income Tax Slabs Raised While Current Surcharge Of 10 Percent On Domestic Companies Is Reduced (26-Feb-2010)
Indian-Commodity : Top News : Income Tax Slabs Raised While Current Surcharge Of 10 Percent On Domestic Companies Is Reduced
The Finance Minister Pranab Mukherjee today presented the Union Budget 2010-11.
Regarding the direct taxes, he said that the income tax slabs for individual taxpayers to be as follows: Income upto Rs 1.6 lakh-Nil, Income above Rs 1.6 lakh and upto Rs. 5 lakh-10%, Income above Rs.5 lakh and upto Rs. 8 lakh-20% and Income above Rs. 8 lakh-30%.
He said that the deduction of an additional amount of Rs. 20,000 will be allowed, over and above the existing limit of Rs.1 lakh on tax savings.
This is for investment in long-term infrastructure bonds as notified by the Central Government.
He also added that the contribution to health insurance schemes is allowed as a deduction under the Income-tax Act.
Other than this, contributions to the Central Government Health Scheme also allowed as a deduction under the same provision.
He said that the current surcharge of 10% on domestic companies is reduced to 7.5% while the rate of Minimum Alternate Tax (MAT) is increased from the current rate of 15% to 18% of book profits.
Moreover, he said that to further encourage R&D across all sectors of the economy, weighted deduction on expenditure incurred on in-house R&D enhanced from 150% to 200%.
The weighted deduction on payments made to National Laboratories, research associations, colleges, universities and other institutions, for scientific research is enhanced from 125% to 175%.
He added that the payment made to an approved association engaged in research in social sciences or statistical research will be allowed as a weighted deduction of 125%.
The income of such approved research association shall be exempt from tax.
Nevertheless, he said that the benefit of investment linked deduction under the Act is extended to new hotels of two-star category and above anywhere in India to boost investment in the tourism sector.
He also said that they will allow pending projects to be completed within a period of 5 years instead of 4 years for claiming a deduction of their profits, as a one time interim relief to the housing and real estate sector.
The Norms for built-up area of shops and other commercial establishments in housing projects will be relaxed in order to enable basic facilities for their residents.
Additionally, the limits for turnover over which accounts need to be audited will be enhanced to Rs. 60 lakh for businesses and to Rs. 15 lakh for professions.
The limit of turnover for the purpose of presumptive taxation of small businesses will be enhanced to Rs. 60 lakh.
Meanwhile, he said that if tax has been deducted on payment by way of any expense and is paid before the due date of filing the return, such expenditure to be allowed for deduction.
The interest charged on tax deducted but not deposited by the specified date will be increased from 12% to 18% per annum.
In order to facilitate the conversion of small companies into Limited Liability Partnerships, the transfer of assets as a result of such conversion will not to be subject to capital gains tax.
On the other hand, the Minister said that the advancement of any other object of general public utility" to be considered as "charitable purpose".
This is even if it involves carrying on of any activity in the nature of trade, commerce or business provided that the receipts from such activities do not exceed Rs.10 lakh in the year.
The proposals on direct taxes estimated to result in a revenue loss of Rs. 26,000 crore for the year.
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