| Tax concessions |
| Monday, 01 March 2010 22:00 | |
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Tax concessions: Apart from the liberal increase in tax slabs at lower tax rates, the finance minister has introduced the following additional schemes in the Union Budget for 2010-11.: • Deduction up to INR 20,000 for investment in long-term infrastructure bonds. This deduction is over and above the existing limit of INR 100,000 available for investment in saving instruments/ for specified expenditure. • Payment of health insurance premium to the Central Government Health Scheme is eligible for tax deduction as in the case of contribution to other approved insurance institutions.
Apart from the liberal increase in tax slabs at lower tax rates, the finance minister has introduced the following additional schemes in the Union Budget for 2010-11.: • Deduction up to INR 20,000 for investment in long-term infrastructure bonds. This deduction is over and above the existing limit of INR 100,000 available for investment in saving instruments/ for specified expenditure. • Payment of health insurance premium to the Central Government Health Scheme is eligible for tax deduction as in the case of contribution to other approved insurance institutions. Under the current law, recipient of gift of immovable property value being more than INR 50,000 is required to pay tax on the stamp duty value of such property if such gift is received from person other than specified relatives. The law also provides for payment of tax on the differential amount when the actual transaction value is lower than the stamp duty value thereby taxing the inadequate consideration. The budget proposes to eliminate tax liability on transactions involving inadequate consideration in the recipient’s hand. Employer compliances Interest for non/delayed deposit of withholding taxes: Under the existing provisions, interest @ 1% per month is levied for non/ delayed deposit of withholding tax. It is now proposed to levy higher rate of interest @ 1.5% per month where the deductor has deducted the taxes but has failed to deposit the same into the Government Treasury. The interest rate (1% per month) for late deposit of withholding tax on account of non deduction remains unchanged. Issuance of withholding tax certificate The Government has decided to continue with the requirement for issuance of withholding tax certificates which was proposed to be dispensed with earlier. Other aspects • Simplified, Saral II tax return form to be introduced. • New Direct Taxes Code likely to come into place from April 1, 2011. |