Personal taxation
There are several welcome measures on the personal taxation front. Although the increase in basic exemption limit is marginal i.e. by Rs.15,000 in case of senior citizens and Rs.10,000 for others, the abolition of surcharge of 10% would definitely benefit individuals whose income is over Rs.10 lakhs. The increase in deduction under section 80DD in respect of a dependent with severe disability from Rs.75,000 to Rs.1 lakh and expansion of scope of section 80E to cover all fields of study including vocational study are welcome measures.
Fillip to new pension scheme
The Budget has given a fillip to the new pension scheme of the Central Government, by exempting NPS Trust from income-tax, dividend distribution tax and securities transaction tax. However, it puts a heavy burden on the tax payer when the proceeds are taxable at the time of withdrawal. Therefore, in the absence of social security network as prevalent in advanced countries, the pension should be exempt from tax at the time of withdrawal.
ICAI suggestion accepted
The ICAI is happy to note that the Government has accepted the suggestion of the ICAI for the extension of scope of presumptive taxation to all small businesses with a turnover/ gross receipt of less than Rs.40 lakhs. The rate of presumptive tax would be 8% of turnover/gross receipts. Further, they would also be exempted from applicability of advance tax provisions.
TDS and advance tax
The provisions relating to tax deduction at source have been considerably rationalized. There would no surcharge or cess in respect of any TDS provision, with the exception of section 192, for which cess would be applicable. The reduction of rate of TDS under section 194-I from 10% to 2% in respect of rent for plant, machinery or equipment is welcome. The consequence of non-furnishing of PAN by the deductee would result in tax being deducted at a steeply enhanced rate of 20% or more. This would ensure better compliance.
There is some relief on the advance tax front also. Advance tax liability would arise only if the tax payable is more than Rs.10, 000.
Gifts-in-kind to attract income-tax
Charging of gifts-in-kind like property, including immovable property, may create practically difficulties for the common man and it may involve extensive litigations.
Wealth tax
The exemption limit for levy of wealth tax has been increased from Rs.15 lakhs to Rs.30 lakhs.
Service tax
Extension of service tax on legal and medical services, though for limited purpose, is certainly a good measure of rationalization. Regarding refund of services tax to the exporter of goods, honorable finance minister has given a welcome relief to the exporter of goods from the administrative difficulties. Now department has to grant refund of the basis of certificate by chartered accountants.
Root: www.icai.org
There are several welcome measures on the personal taxation front. Although the increase in basic exemption limit is marginal i.e. by Rs.15,000 in case of senior citizens and Rs.10,000 for others, the abolition of surcharge of 10% would definitely benefit individuals whose income is over Rs.10 lakhs. The increase in deduction under section 80DD in respect of a dependent with severe disability from Rs.75,000 to Rs.1 lakh and expansion of scope of section 80E to cover all fields of study including vocational study are welcome measures.
Fillip to new pension scheme
The Budget has given a fillip to the new pension scheme of the Central Government, by exempting NPS Trust from income-tax, dividend distribution tax and securities transaction tax. However, it puts a heavy burden on the tax payer when the proceeds are taxable at the time of withdrawal. Therefore, in the absence of social security network as prevalent in advanced countries, the pension should be exempt from tax at the time of withdrawal.
ICAI suggestion accepted
The ICAI is happy to note that the Government has accepted the suggestion of the ICAI for the extension of scope of presumptive taxation to all small businesses with a turnover/ gross receipt of less than Rs.40 lakhs. The rate of presumptive tax would be 8% of turnover/gross receipts. Further, they would also be exempted from applicability of advance tax provisions.
TDS and advance tax
The provisions relating to tax deduction at source have been considerably rationalized. There would no surcharge or cess in respect of any TDS provision, with the exception of section 192, for which cess would be applicable. The reduction of rate of TDS under section 194-I from 10% to 2% in respect of rent for plant, machinery or equipment is welcome. The consequence of non-furnishing of PAN by the deductee would result in tax being deducted at a steeply enhanced rate of 20% or more. This would ensure better compliance.
There is some relief on the advance tax front also. Advance tax liability would arise only if the tax payable is more than Rs.10, 000.
Gifts-in-kind to attract income-tax
Charging of gifts-in-kind like property, including immovable property, may create practically difficulties for the common man and it may involve extensive litigations.
Wealth tax
The exemption limit for levy of wealth tax has been increased from Rs.15 lakhs to Rs.30 lakhs.
Service tax
Extension of service tax on legal and medical services, though for limited purpose, is certainly a good measure of rationalization. Regarding refund of services tax to the exporter of goods, honorable finance minister has given a welcome relief to the exporter of goods from the administrative difficulties. Now department has to grant refund of the basis of certificate by chartered accountants.
Root: www.icai.org
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