Finance Minister Pranab Mukherjee's Budget had quite a few tax-related proposals, although initially they did not appear to be too significant. However, read on to find out what are the proposals related to Direct and Indirect taxes that he has made and how the two affect you!
In a relief to individual tax payers, the government on Friday changed the slabs cutting the rate to 10 per cent for income up to Rs five lakh, while leaving the threshold limit for tax-free income unchanged at Rs 1.6 lakh.
Finance Minister Pranab Mukherjee on Monday said the Direct Taxes Code (DTC), which will replace the Income Tax Act, is proposed to be implemented from April 1, 2012."
Tax experts are hopeful Finance Minister Pranab Mukherjee will increase the income tax exemption limit to Rs 2 lakh (Rs 200,000) per annum from Rs 1.6 lakh (Rs 160,000) to bring the rates in line with the Direct Taxes Code.
The Budget day is generally awaited by the aam aadmi in the hope that the amendments will mean more money for him.
Give separate tax exemption limit of Rs 50000 for the life insurance premium.
It's important to make the penalty system an effective deterrent to ensure greater efficiency in the tax system, says M Govinda Rao.
The Direct Taxes Code Bill tabled in the Lok Sabha is likely to negatively impact the life insurance industry on many counts, if implemented in the present form.
Individual taxpayers may see a slight dent in their profits earned on investments in mutual funds or life insurers' investment offering.
It is undoubted that writing a new law based on learning from the experience of half a century is a Herculean task and the taxpayer and tax collector alike require time to acclimatise with a new code.
The direct taxes code Bill, which was approved by the Union Cabinet on Thursday, has made further concessions from what was originally proposed.
A pass-through in taxation means that the business entity need not pay tax. Instead, all taxable income is passed through to its owners or members.
Though clarity on various aspects is still some way off, let's take a look at the impact of the Revised Direct Taxes Code.
The special economic zone scheme seems to be in trouble.
The donations you make to religious bodies is not going to earn any tax exemptions, but the income of these entities will continue to get tax breaks, subject to certain exemptions.
The revised draft DTC, released earlier this month, has dropped the contentious issues of the first discussion paper.
Insurance firms and non-banking finance companies are heaving a sigh of relief as the revised draft of the Direct Taxes Code has suggested that book profits rather than gross assets be used to calculate the minimum alternate tax, or MAT, for both groups.
Tax rates would be made known only in the proposed Act, a bill for which will be introduced in Parliament in the coming monsoon session.
Taxing the existing retirement benefits schemes would affect the working class, the labour ministry said.
Redrafting the Direct Taxes Code is proving to be an uphill task for the finance ministry, bombarded with comments from various stakeholders. The Central Board of Direct Taxes has received about 10,000 suggestions on the code, which seeks to replace the Income Tax Act of 1961.
Think that you are a tax expert? Take this simple tax quiz and find out.
The annual Finance Bill may soon become far less exciting as the government plans to lift the veil of secrecy surrounding tax proposals in Budget. Once the Direct Taxes Code (DTC) and Goods and Services Tax (GST) are in place, the finance ministry will adopt a public discussion approach for most future decisions, while confining the annual exercise to a few procedural changes.
The finance ministry is likely to drop the proposal to tax religious trusts. The proposal formed part of the direct taxes code and had raised eyebrows both within and outside the finance ministry. Under Section 10 (23C) of the Income Tax Act, any trust or institution that works wholly for public religious and charitable purposes and is approved by the chief commissioner or director general, is tax exempt.
Recently, Finance Minister Pranab Mukherjee had assured industry that the government was open to re-examining proposals in seven key areas.
After comments from the Parliamentary panel, the bill could have been placed in the winter session, and once passed in that session, GST legislation could have been tabled in the Budget session.
The proposed Direct Taxed Code (DTC) is likely to adversely affect the exponential rise in exports from special economic zones (SEZs).
Salaried taxpayers may have less kitty for holidays from April 2012, with the government proposing to scrap tax incentives on leave travel allowance in the new direct tax regime DTC.
The government will lose over Rs 53,000 crore (Rs 530 billion) in tax revenue on account of the increase in exemption limits and tweaking of slabs in the Direct Taxes Code Bill, which will come into effect from April 1, 2012, a year behind the previous deadline.
While senior citizens will continue to enjoy greater tax exemption, women tax payers will lose their special status under the proposed Direct Taxes Code.
Let's take a quick look at how the salaried class will be affected post the implementation of the New Direct Taxes Code in its latest avatar.
The Direct Tax Code (DTC) Bill proposes to raise exemption limit for personal income tax from Rs 1.6 lakh to Rs 2 lakh, Finance Minister Pranab Mukherjee said.
Taxpayers may get relief in terms of tax rates in the proposed Direct Taxes Code (DTC), which is likely to replace the 50-year-old Income Tax Act from the next fiscal, a key official indicated on Friday.
But contentious areas like special economic zones, capital gains and Ulips may see changes
The proposed Direct Taxes Code Bill, 2009, should change our tax liability as well as the way we invest.
Ernst & Young on how the Budget 2010 will affect individuals and businesses.
Well, here are some views culled from various new agencies, newspapers and experts on what the February 26 Union Budget for 2010-11 might have in store for you.
Expectations are running high for the Budget 2010 to do many things -- maintain growth, provide employment, reduce fiscal deficit, take steps to shift to the new Direct Taxes Code, take measures to implement Goods and Services Tax, reduce inflation and increase revenue for the government.
Keeping a track of the latest developments will help you plan your investments wisely
Here is a list of some of the noteworthy changes proposed in the draft code.
Finance Minister Pranab Mukherjee wants the income tax forms to be simple so that a taxpayer can understand his liability without consulting experts or chartered accountants.
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