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Updated Budget 2010 2011
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Updated Budget 2010 2011

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Updated Budget 2010 2011 Presentation Transcript

  • 1. VIMAL TANDON & CO. CHARTERED ACCOUNTANTS BUDGET 2010-2011 HIGHLIGHTS
  • 2. INDIRECT TAXE S SERVICE TAX
    • Service tax remained unchanged at 10 percent.
    • New Services Taxed:
      • Assigning of copyright on cinematograph films and sound recordings.
      • Payment for health services to insurance companies by any business entity for its employees.
      • Promotion or marketing of a brand of goods, service, event or endorsement of name.
      • Maintenance of medical records of employees of a business entity.
      • Specified services provided by a builder of residential or commercial complex to prospective buyers such as preferential location. Providing parking space will not be taxable.
  • 3.
    • Services Excluded:
      • Pre packaged software, containing the license for right to use provided the Excise duty/Custom duty has been paid.
      • Specified Indian News Agencies providing ‘Online Information and Database Access or Retrieval Services’ and ‘Business Auxiliary Services’ subject to certain conditions.
      • Transmission of electricity.
      • Erection, Commissioning or Installation Services’ provided in relation to:
        • Mechanized food grain handling systems.
        • Equipment for setting up or substantial expansion of cold storage.
        • Machinery or equipment for initial setting up or substantial expansion of units for processing agricultural and other specified products.
      • Technical testing and other specified services provided by Central/State Seed Testing Laboratory/ Agency.
      • Transportation of food grains and pulses by road.
  • 4. DIRECT TAXES
    • Individual
    • Basic exemption limit for women resident in India remained unchanged at Rs.1,90,000.
    • Basic exemption limit for a senior citizen resident in India remained unchanged at Rs.2,40,000.
    • Basic exemption limit for men and HUF resident in India remained unchanged at Rs.1,60,000.
    • No surcharge on personal income tax.
  • 5. Income tax slabs for individual taxpayers: 30% Above Rs. 8,00,000 Above Rs. 5,00,000 20% Rs. 5,00,001 to Rs. 8,00,000 Rs. 3,00,001 to Rs. 5,00,000 10% Rs. 1,60,001 to Rs. 5,00,000 Rs. 1,60,001 to Rs. 3,00,000 Nil Upto Rs. 1,60,000 Upto Rs. 1,60,000 Rates of Income Tax Income slab (AY 2011-12) Income slab (AY 2010-11)
  • 6. Firms / Corporates
    • No change in corporate tax rate, education cess and additional secondary and higher education cess.
    • 10% surcharge on firm’s income tax eliminated.
    • Companies having taxable income of more than Rs.1Crore continue to pay surcharge but at a reduced rate of 7.5% instead of 10%.
    • Foreign company having taxable income exceeding Rs. 1 Crore (Ten Million) continue to pay 2.5% surcharge.
  • 7. Domestic Companies
    • MAT (Minimum Alternate Tax) has been increased to 18% as against 15% last year.
    • Corporate tax rate remains at 30%
    • Education Cess : 2%
    • Secondary and Higher Education Cess: 1%
    • Surcharge : 7.5% if taxable income exceeds Rs. 1 Crore ( 10 million)
  • 8. Foreign Companies
    • The income tax rates remain unchanged at 40%
    • Surcharge: 2.5% if taxable income exceed Rs. 1 Crore (10 million)
    • Education Cess : 2%
    • Secondary and Higher Education Cess: 1%
  • 9. Firms
    • The income tax rate for firms remains unchanged at 30%
    • 10% surcharge on firms income tax eliminated.
    • Education Cess : 2%
    • Secondary and Higher Education Cess: 1%
  • 10. Non – Residents
    • Income deemed to accrue or arise in India to a non-resident – Explanation to Section 9 :-
    • The income of a non-resident by way of interest, royalty or technical fees shall be deemed to accrue or arise in India as provided under section 9 whether or not,
    • (a) The non-resident has a residence or place of business or business
    • connection in India; or
    • (b) The non-resident has rendered services in India.
    • This amendment is in accordance with the legislative intent of that the situs of rendering services in India is not relevant as long as they are utilized in India. It is proposed to take effect retrospectively from 1st June, 1976.
  • 11. Deductions and Exemptions :
    • Investment in long-term infrastructure bonds notified by the Central Government upto Rs. 20,000 is allowed as deduction u/s 80CCF over and above the existing limit of Rs.1 lakh on tax savings u/s 80C.
    • Contributions to the Central Government Health Scheme are also allowed as a deduction under the existing provisions of section 80D, besides current health insurance schemes under the Income Tax Act.
    • Deduction in respect of premium paid towards a health insurance policy has been increased to Rs. 20,000 if the person insured is of age of 65 years or above.
    • Weighted deduction of the expenditure (not being expenditure in the nature of cost of any land or building) incurred on scientific research on an approved in-house research and development facility has been increased from 150 % to 200 percent.
  • 12. Deductions and Exemptions : (Contd..)
    • Weighted deduction increased from 125 % to 175 % on payments made to National Laboratories, research associations, colleges, universities and other institutions, for scientific research
    • For person carrying on business turnover limits over which accounts need to be audited increased from Rs. 40 lakh to Rs. 60 lakh and for person carrying on a profession turnover limits have been increased from Rs. 10 lakh to Rs. 15 lakh.
    • Maximum Limit of Penalty for failure to get accounts audited under section 44AB or to furnish a report of such audit has been increased from Rs. one lakh to Rs. 1.5 lakh.
    • For the purpose of presumptive taxation the threshold limit of total turnover or gross receipts have also been increased from Rs. 40 lakh to Rs. 60 lakh.
  • 13. Tax Deduction at Source
    • Tax deducted on payment by way of any expense if paid before the due date of filing the return, such expenditure shall be allowed as deduction.
    • With effect from 1st July, 2010 interest rate increased from 12% to 18% per annum on tax deducted but not deposited by the specified date.
  • 14. Limits for deduction of TDS have been revised as under (w.e.f. 01 st July, 2010): 30,000 20,000 Fee for Professional or Technical Services 194J 1,80,000 1,20,000 Rent 194I 5,000 2,500 Commission or brokerage 194H 20,000 5,000 Insurance Commission 194D One time – 30,000 Aggregate during the year - 75,000 One time – 20,000 Aggregate during the year - 50,000 Payment to Contractor 194C 5,000 2,500 Winning from Horse race 194BB 10,000 5,000 Winning from lottery or crossword, puzzles 194B Limits for FY 2010-11 Limits for FY 2009-10 Nature of payment Sections
  • 15. Conversion of Companies into LLP
    • On conversion of companies into Limited Liability Partnerships, there shall not be capital gains tax on transfer of assets subject to certain conditions as follows:
      • Total turnover or gross receipts in business not to exceed Rs. 60 lakh in any of the three preceding previous years.
      • Shareholders of the company become partners of the LLP in the same proportion.
      • No consideration other than share in profit and capital contribution in the LLP arises to the partners.
      • For a period of 5 years from the date of conversion, at least 50 % of the profits of the LLP shall be received by the erstwhile shareholders of the company
      • All assets and liabilities of the company become the assets and liabilities of the LLP, and
      • For a period of 3 years from the date of conversion, no amount is paid, either directly or indirectly, to any partner out of the accumulated profit of the company
  • 16. Conversion of Companies into LLP (Contd..)
    • Carry forward and set-off of business loss and unabsorbed depreciation shall be allowed to the successor LLP on the fulfillment of the above mentioned conditions.
    • Tax credit under section 115JAA shall not be allowed to the successor LLP.
  • 17. BUDGET ANALYSIS BY :-
    • M/s Vimal Tandon & Co.
    • Chartered Accountants
    • A-107/1, Pal Mohan Plaza, 11/56,
    • D.B. Gupta Road, Karol Bagh,
    • New Delhi - 110005
    • Telefax – 23551056
    • Tel. 45032501
    • Mob. 9810221653, 9868171653
    • website - vimaltandon.com             charteredaccountantindelhi.com
    • e-mail. - vimaltandon@gmail.com         [email_address]