Finance Bill 2010 Kalyan 97 2003

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Finance Bill 2010 Kalyan 97 2003

  1. 1. THE JALNA CA CPE STUDY CHAPTER Presentation on Proposed Finance Bill 2010 Direct Taxes 3rd March, 2010 CA. Kalyan Chakravarthy Vennety
  2. 2. INCOME TAX ACT, 1961 3.3.2010 CA. Kalyan Chakravarthy Vennety 2
  3. 3. NEW TAX RATE SLAB for Individuals & HUF Slab Rate of Tax (1) where the total income does not exceed Rs. 1,60,000 NIL (2) where the total income exceeds Rs.1,60,000 but does 10% not exceed Rs. 5,00,000 (3) where the total income exceeds Rs. 5,00,000 but does 20% not exceed Rs. 8,00,000 (4) where the total income exceeds Rs. 8,00,000 30% 3.3.2010 CA. Kalyan Chakravarthy Vennety 3
  4. 4. Increase in Surcharge on Income Tax Total income > 1 Crore Rate Domestic company 10% Now Total income > 1 Crore Rate Domestic company 7.5% 3.3.2010 CA. Kalyan Chakravarthy Vennety 4
  5. 5. Sec 2(15) Charitable Purpose w.e.f. 1-04-2009 Restriction of the definition of “Charitable Purpose” Not Apply if aggregate receipts do not exceed Rs. 10 Lacs 3.3.2010 CA. Kalyan Chakravarthy Vennety 5
  6. 6. Sec 9 Income deemed to accrue or arise in India w.e.f. 01-06-1976 Income from royalties, interest, fee for technical services Ishikawajima- Harima Heavy Include in Total Income of NR Industries Ltd case (SC) Whether or not Non-Resident rendered service in India 3.3.2010 CA. Kalyan Chakravarthy Vennety 6
  7. 7. Sec 10(21) Incomes not included in Total Income Date of effect: 01-04-2011 Approved Research Association Having object Social Statistical science Research 3.3.2010 CA. Kalyan Chakravarthy Vennety 7
  8. 8. Sec 12AA (3) Cancellation of trust or institution w.e.f. 01-06-2010 Earlier Cancellation was linked to Trust/Institution granted reg’n u/s 12AA(1) Now Cancellation provided where any Trust/Institution has obtained Reg’n any time u/s 12A 3.3.2010 CA. Kalyan Chakravarthy Vennety 8
  9. 9. Sec 32 Depreciation w.e.f. 01-04-2011 Company LLP Dep’n as if no succession has taken place 3.3.2010 CA. Kalyan Chakravarthy Vennety 9
  10. 10. Sec 35 Weighted Deduction on Expenditure on Research w.e.f. 01-04-2011 125% Now 175% 150% Now 200% 3.3.2010 CA. Kalyan Chakravarthy Vennety 10
  11. 11. Sec 35AD Expenditure on specified business w.e.f. 01-04-2010 Cross-country Total Capacity Gas or Oil should be as per P&NG pipeline network Reg Board New specified Hotel Business 2Star or above 3.3.2010 CA. Kalyan Chakravarthy Vennety 11
  12. 12. Sec 35DDA Amortisation of Exp under VRS w.e.f. 01-04-2011 Company LLP Deduction as if no succession has taken place 3.3.2010 CA. Kalyan Chakravarthy Vennety 12
  13. 13. Sec 40(a)(ia) Disallowance of Exp w.e.f. 01-04-2010 TDS Deducted But not paid on or before the due date of filing of return 3.3.2010 CA. Kalyan Chakravarthy Vennety 13
  14. 14. Yes, you all guessed it right ! He is the Tax Auditor 3.3.2010 CA. Kalyan Chakravarthy Vennety 14
  15. 15. Sec 44AB Tax Audit Provision w.e.f. 01-04-2011 (a) in clause (a), for the words “forty lakh rupees”, the words “sixty lakh rupees” shall be substituted; (b) in clause (b), for the words “ten lakh rupees”, the words “fifteen lakh rupees” shall be substituted 3.3.2010 CA. Kalyan Chakravarthy Vennety 15
  16. 16. Sec 44AD Tax Audit Provision w.e.f. 01-04-2011 in the Explanation, in clause (b), in sub-clause (ii), for the words “forty lakh rupees”, the words “sixty lakh rupees” shall be substituted 3.3.2010 CA. Kalyan Chakravarthy Vennety 16
  17. 17. Sec 44 BB Business of Exploration of Mineral Oils w.e.f. 01-04-2011 Sec 44 DA applicable? Sec 44 BB Not Applicable 3.3.2010 CA. Kalyan Chakravarthy Vennety 17
  18. 18. Sec 44 DA Royalties etc. in case of non residents w.e.f. 01-04-2011 Sec 44 BB applicable? Sec 44 DA Not Applicable 3.3.2010 CA. Kalyan Chakravarthy Vennety 18
  19. 19. Sec 47(xiii b) Transactions not regarded as transfer w.e.f. 01-04-2011 Company Transfer of Capital / Intangible Asset LLP Six conditions? Not a Transfer 3.3.2010 CA. Kalyan Chakravarthy Vennety 19
  20. 20. Sec 47(xiii b) Transactions not regarded as transfer w.e.f. 01-04-2011 Six conditions 1. All A&L of co. become A&L of LLP 2. All Shareholders become Partners of LLP 3. Shareholders do not receive any compensation in any form 4. Aggregate of PSR of shareholders should not be less than 50% for 5years 5. Turnover of the company any of the 3 years prior to conversion does not exceed Rs. 60 Lacs 6. No amount is paid to partners out of accumulated balance of the company on the date of conversion for a period of 3 years 3.3.2010 CA. Kalyan Chakravarthy Vennety 20
  21. 21. Sec 49(4) New sub-section Cost of acquisition w.e.f. 01-06-2010 Shares received without consideration or inadequate consideration Cost of Acquisition Value which has been taken into account for the purpose of section 56 (2) (viia) 3.3.2010 CA. Kalyan Chakravarthy Vennety 21
  22. 22. 56(2)(vii)(b) Income from other sources w.e.f. 01-10-2009 Value of Property received Condition of Property inadequate Taxed only if = Capital Asset only. consideration Does not cover Removed Stock in Trade Property is received without any consideration 3.3.2010 CA. Kalyan Chakravarthy Vennety 22
  23. 23. 56(2)(vii)(b) Income from other sources w.e.f. 01-06-2010 w.e.f. 01-06-2010 Bullion included Condition of Property inadequate Taxed only if = Capital Asset only. consideration Does not cover Removed Stock in Trade Property is received without any consideration 3.3.2010 CA. Kalyan Chakravarthy Vennety 23
  24. 24. 56(2)(vii)(b) Income from other sources w.e.f. 01-06-2010 Where a Firm or Pvt Ltd. Co receives From any In any PY person(s) Shares of Pvt Ltd. Co 3.3.2010 CA. Kalyan Chakravarthy Vennety 24
  25. 25. Proviso: This clause 56(2)(vii)(a) Expl’n: FMV meaning same as shall not apply to cases covered u/s 47 Income from other sources given in Expl’n to clause (vii) w.e.f. 01-06-2010 Scenario 1 What is Chargeable to Tax Without Consideration & =The whole of the Aggregate Aggregate FMV>50,000 FMV Scenario 2 What is Chargeable to Tax For a Consideration which is =Aggregate FMV-Consideration less than Aggregate FMV by Expl’n of Property >50,000 Not applicable here. Hence, covers Stock in Trade also. 3.3.2010 CA. Kalyan Chakravarthy Vennety 25
  26. 26. Sec 72A (6A) New clause C/f & Setoff in amalgamation/demerger Proviso: fresh period w.e.f. 1-04-2011 of 8 years will be available for Company set off of loss in the hands of LLP upon conversion Succeeded by Six conditions LLP Can C/f & Setoff satisfied? accumulated Loss & Dep'n 3.3.2010 CA. Kalyan Chakravarthy Vennety 26
  27. 27. Sec 80A(7) Deductions claimed in Total Income w.e.f. 01-04-2011 Claimed deduction under this sec? Deduction Sec 35 AD Not Available 3.3.2010 CA. Kalyan Chakravarthy Vennety 27
  28. 28. Sec 80CCF Deduction on long term infrastructure bonds w.e.f. 01-04-2011 Limit = Rs.20,000 In addition to Rs.100,000 under Sec 80CCE 3.3.2010 CA. Kalyan Chakravarthy Vennety 28
  29. 29. Sec 80D Deduction for Health Insurance Premia w.e.f. 01-04-2011 Benefit Extended Contribution made to Central Government Health Scheme within Rs.15,000 3.3.2010 CA. Kalyan Chakravarthy Vennety 29
  30. 30. Sec 80GGA Deduction in respect of certain donations for scientific research or rural development w.e.f. 01-04-2011 Scope Extended Research in Social Statistical Science Research 3.3.2010 CA. Kalyan Chakravarthy Vennety 30
  31. 31. Sec 80IB(10)(a) Deduction in respect of profits and gains from certain industrial undertakings other than infrastructure development undertakings w.e.f. 01-04-2010 Period of completion Extended from 4 Years 5 Years 3.3.2010 CA. Kalyan Chakravarthy Vennety 31
  32. 32. Sec 80IB(10)(d) Deduction in respect of profits and gains from certain industrial undertakings other than infrastructure development undertakings w.e.f. 01-04-2010 Built up Area of shops & commercial estb. included in Housing Project 5% of the 3% of the aggregate built- aggregate built- up area of the up area of the housing project Revised housing project or or 2,000 square feet, 5,000 square feet, whichever is whichever is less higher 3.3.2010 CA. Kalyan Chakravarthy Vennety 32
  33. 33. Sec 80ID(2)(i) Deduction in respect of profits and gains from business of hotels and convention centres in specified area For special impetus w.e.f. 01-04-2011 to ensuing Common Wealth Games Deadline for construction of the centre extended to 31st July, 2010 3.3.2010 CA. Kalyan Chakravarthy Vennety 33
  34. 34. Sec 115JJA(7) Tax credit in respect of tax paid on deemed income relating to certain companies w.e.f. 01-04-2011 Company Succeeded by LLP Credit of MAT paid available? NO 3.3.2010 CA. Kalyan Chakravarthy Vennety 34
  35. 35. Sec 115JB(1) MAT w.e.f. 01-04-2011 Minimum Alternative Tax Increased 15% 18% 3.3.2010 CA. Kalyan Chakravarthy Vennety 35
  36. 36. Sec 115WE(1B) FBT Assessment w.e.f. 01-04-2010 Time limit for issuance of direction by Central Govt increased to 31.03.2011 3.3.2010 CA. Kalyan Chakravarthy Vennety 36
  37. 37. Sec 139(4C) Return of Income w.e.f. 01-04-2011 Scope Extended Research Association Social Statistical Science Research 3.3.2010 CA. Kalyan Chakravarthy Vennety 37
  38. 38. 142A(1) Estimate by Valuation Officer in certain cases w.e.f. 01-07-2010 AO is now empowered to make reference to the Valuation Officer for making an estimate of FMV of any property referred to in sub-section (2) of section 56 of the Act. 3.3.2010 CA. Kalyan Chakravarthy Vennety 38
  39. 39. Sec 143(1B) Assessment w.e.f. 01-04-2010 Time limit for issuance of direction relating to processing of returns By Central Govt increased to 31.03.2011 3.3.2010 CA. Kalyan Chakravarthy Vennety 39
  40. 40. Sec 143(1B) Assessment w.e.f. 01-04-2011 Time limit for issuance of direction relating to processing of returns By Central Govt increased to 31.03.2011 Proviso: AO shall not withdraw exemption u/s10(21) unless intimation has been given by him to the prescribed authority and the approval granted to the association has been withdrawn 3.3.2010 CA. Kalyan Chakravarthy Vennety 40
  41. 41. Sec 143(3) Assessment w.e.f. 01-04-2011 References to scientific research association are proposed to be substituted by references to research association 3.3.2010 CA. Kalyan Chakravarthy Vennety 41
  42. 42. Changes in TDS Threshold Limits w.e.f. 1-07-2010 EXISTING PROPOSED SEC NATURE OF PAYMENT THRESHOLD THRESHOLD Winning from Lottery & 194B 5,000 10,000 crossword puzzles 194BB Winnings from Horse Race 2,500 5,000 20,000 194C Payment to Contractors [for single 30,000 transaction] 50,000 194C Payment to Contractors [for aggregate 75,000 transactions] 194D Insurance Commission 5,000 20,000 194H Commission or brokerage 2,500 5,000 194I Rent 1,20,000 1,80,000 Fess for professional or 194J 20,000 30,000 technical services 3.3.2010 CA. Kalyan Chakravarthy Vennety 42
  43. 43. Sec 201(1A) Consequences of failure to deduct or pay tax w.e.f. 01-07-2010 Interest on delayed Deposit Rate increased 12% p.a. 18% p.a. 3.3.2010 CA. Kalyan Chakravarthy Vennety 43
  44. 44. Sec 203(3) & 206(C) Certificate of TDS w.e.f. 01-04-2010 It is proposed to omit the sub-section (3) which provides that on or after 1st April, 2010 there is no need to issue a TDS Certificate 3.3.2010 CA. Kalyan Chakravarthy Vennety 44
  45. 45. Sec 245A expression “case” It also removes the prohibition in w.e.f. 01-06-2010 cases where the AO has to proceed u/s. 153C of the Act. The expression “case” amended so as to include Assessment in case of search or requisition 3.3.2010 CA. Kalyan Chakravarthy Vennety 45
  46. 46. Sec 245C Settlement of cases w.e.f 01-06-2010 Application can be made before S-Commission In case of sec 132 In case of sec 132A If additional amount of income tax payable Exceeds Rs.50 Lacs Other cases Exceeds Rs. 10 Lacs 3.3.2010 CA. Kalyan Chakravarthy Vennety 46
  47. 47. Sec 245D(4A) Procedure on receipt of an application for settlement of cases w.e.f 01-06-2010 The SC shall make an Order In respect of an In respect of an application made on or application made after 1st June, 2007 on or after 1st June, 2010 But before 1st June, 2010 Within 12 months Within 18 months 3.3.2010 CA. Kalyan Chakravarthy Vennety 47
  48. 48. Sec 256(2A) Statement of case to the High Court w.e.f. 01-06-1981 (6 months from if it is satisfied High Court can the date of that there was receipt of the admit an order of Tribunal sufficient application refusing to state cause for not after the the case on the filing the same expiry ground that no within the said question of law period arises) 3.3.2010 CA. Kalyan Chakravarthy Vennety 48
  49. 49. Sec 260A(2A) Statement of case to the High Court w.e.f. 01-10-1998 if it is satisfied High Court is from the date of that there was empowered to receipt of the sufficient admit an order appealed cause for not appeal after against filing the same 120 days within the said period 3.3.2010 CA. Kalyan Chakravarthy Vennety 49
  50. 50. 271B Penalty for failure to get accounts audited w.e.f. 01-04-2011 Penalty equal to 0.50% of the or of the gross total sales, receipts in or A sum of Rs turnover or profession, in 150,000/- gross such previous whichever is receipts, as the year less case may be, in business 3.3.2010 CA. Kalyan Chakravarthy Vennety 50
  51. 51. Sec 282B Document Identification No. w.e.f 01-10-2010 Effective Date for use of computer generated Document Identification Number extended to 01-10-2011 3.3.2010 CA. Kalyan Chakravarthy Vennety 51
  52. 52. Rule 5(b) First Schedule Computation of Profits & Gains of other insurance Business Any gain or loss on realisation of investments if such gain or to the profit Shall be added loss is not and loss or deducted credited or account debited Any provision for diminution in the value of investment debited to the profit shall be added back and loss account 3.3.2010 CA. Kalyan Chakravarthy Vennety 52
  53. 53. WEALTH TAX ACT, 1957 3.3.2010 CA. Kalyan Chakravarthy Vennety 53
  54. 54. Sec 22A(b) expression “case” w.e.f 01-06-2010 Definition of “case” altered to include the proceedings of assessment or reassessment which may be initiated on the basis of a search or requisition Expl’n amended to specify the date on which the proceedings for assessment or reassessment shall be deemed to have been initiated and concluded pursuant to a search or requisition 3.3.2010 CA. Kalyan Chakravarthy Vennety 54
  55. 55. Sec 22D Procedure on receipt of an application for settlement of cases w.e.f 01-06-2010 The SC shall make an Order In respect of an In respect of an application made on or application made after 1st June, 2007 on or after 1st June, 2010 But before 1st June, 2010 Within 12 months Within 18 months 3.3.2010 CA. Kalyan Chakravarthy Vennety 55
  56. 56. Sec 27(3B) Reference to the High Court. w.e.f. 01-06-1981 (90 days from the if it is satisfied date of receipt of that there was High Court can the order of Tribunal refusing sufficient cause admit an to state the case for not filing application on the ground the same after the expiry that no question within the said of law arises) period 3.3.2010 CA. Kalyan Chakravarthy Vennety 56
  57. 57. Sec 27A Statement of case to the High Court. w.e.f. 01-10-1998 3.3.2010 CA. Kalyan Chakravarthy Vennety 57
  58. 58. CENTRAL SALES TAX ACT, 1956 3.3.2010 CA. Kalyan Chakravarthy Vennety 58
  59. 59. Major Amendments • Amendment -sub-section 2 of Section 6 A ‒The assessing authority should satisfy himself that the declaration filed by a dealer is true and there is no inter- state sale •Insertion –sub-section 3 of Section 6 A ‒Assessing authority is empowered to do re-assessment on discovery of new facts or revision by higher authority •Insertion of new Chapter V A to the CST Act, - “Appeals to the Highest Appellate Authority of the State” •The Central Sales Tax Appellate Authority has been empowered to direct refund of tax collected 3.3.2010 CA. Kalyan Chakravarthy Vennety 59
  60. 60. SERVICE TAX ACT 3.3.2010 CA. Kalyan Chakravarthy Vennety 60
  61. 61. New services introduced in the tax net –effective from a date to be notified • Commercial use or exploitation of any event •Copyrights on recording of cinematographic films/sound recording •Health Services for employees of business entities/services •Services of maintenance of medical records •Electricity Exchange Services •Additional services provided by a builder to the prospective buyers •Brand Endorsement Services •Promotion, marketing or organizing of games of chance including lottery 3.3.2010 CA. Kalyan Chakravarthy Vennety 61
  62. 62. End of Presentation. 3.3.2010 CA. Kalyan Chakravarthy Vennety 62
  63. 63. THANK YOU ! CA. Kalyan Chakravarthy Vennety BCOM, ACA, DISA(ICAI), CISA V R Jogeswara Rao & Co., Chartered Accountants Phone: 99700-88669 Email: ca.vkalyanc@gmail.com 3.3.2010 CA. Kalyan Chakravarthy Vennety 63

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