dtp final.pptx

PRESENTATION
ON
FINANCE ACT 2011

Amendments in tax slabs
Assesses Existing income
range
New income range Comment/ Impact
Individual,HUF,AOP,
BOIs
Rs.1,60,000 Rs.1,80,000 Overall benefit of
RS. 2060
Senior citizen RS.2,40,000 Rs.2,50,000 Overall benefit of
RS. 1030
Super senior citizen RS.2,40,000 Rs.5,00,000 Overall benefit of
RS. 26780

The Age Limit for Sr Citizen has been reduced from 65 to 60 Yrs.
The Senior Citizen Class has been classified into 2 Categories.
- Age of 60 Yrs or more but less than 80 Yrs is Rs 2.50 lakhs
- Age of Eighty years or more is Rs. 5.00 lacs
Assesse
(SENIOR CITIZEN)
Existing income
range(60-65yrs)
New income range
(60-65yrs)
Comment/ Impact
Men Rs.1,60,000 RS.2,50,000 RS.9270
women RS.1,90,000 RS.2,50,000 Rs.6180

Amendments to section 10
Section no Existing provision New Provision Comment/ Impact
Sec 10 (34) Any income by way
of dividends
referred to in
section 115-0
declared,
distributed or paid
by a domestic
company is not
included in the total
income of the
recipient.
From the w.e.f
1-06-2011 such
dividends declared
distributed or paid
on or after
1-6-2011 will be
included in the total
income of a
developer or
entrepreneur.
This will have
impact on the
domestic company
as they will restrict
themselves from
declaring dividends.

SEC 10(45) and (46) any allowance or
perquisite, as may
be notified by the
Central Government
in the Official
Gazette in this
behalf, paid to the
Chairman or a
retired Chairman or
any other member
or retired member
of the Union Public
Service Commission
Clause 46 has been
inserted ,it provides
exemption from
income tax to any
specified income of
a notified body,
authority, board or
commission which is
set up or constituted
by central, state or
provisional act with
the object of
regulating an activity
for the benefit of the
general public.on or
after
1-06-2011
This would prove
beneficial for the
general public
indirectly.

Section no New Provision Comment/ Impact
Sec 10(47) With effect from
June 1,2011
Income of
infrastructure Debt
Funds shall be
exempted from tax.
However ,such fund
will have to submit
return of income
under section 139.
It would prove
beneficial for the
infrastructure
sector.
But such income
from an NRI has to
be taxable of 5% on
the gross amount

SEC-35(2AA) Any sum paid to a
National Laboratory or
a University or an
Indian Institute of
technology or a
specified person for
carrying out
programme of
scientific research
approved by the
prescribed authority is
eligible for a weighted
deduction of one and
three-fourth times.
Now the said
weighted deduction of
one and three fourth
times(@175%) has
been increased to two
times(ie.,@200%)
thereof.
w.e.f. A.Y.2012 -13.
This will give
encouragement to the
scientific research
programme .

Section 35AD
Section no New Provision Comment/ Impact
Newly inserted clause (ad)
and (ae) in section 35AD(5)
In the nature of developing
and building a housing
project under a scheme
framed by the central govt.
will also be eligible for
deduction of capital
expenditure incurred, if it
commences its operation
on or after 1-4-2011
This will benefit as they
can set off loss against
other business ,even if the
specified business is not
claiming deduction under
35AD.

Newly inserted
clause (ad) and (ae)
in section 35AD(5)
New plant or in a
newly installed
capacity in an
existing plant for
production of
fertilizer also will be
eligible for
deduction of capital
expenditure.

SEC 35AD(8)(c) Defines the term
specified business.
specified business
includes business of
building and
operating any
where in India: a
new hotel of two
star a classified by
the central
government and a
new hospital with
at least 100 beds
Under the
amendment the
word “new”
preceding hotel and
hospital,
respectively will be
omitted.
------------

Deduction of sum paid by an employer by way of
contribution towards a pension scheme referred to in
section 80CCD
Section 36(1) At present, provisions
of this section provide
for allowing certain
deductions in
computing the income
under the head
“profits and gains of
business or
profession”
New inserted clause
provides that any sum
paid by an assessee as
an employer by way
of contribution
towards a pension
scheme on account of
an employee not
exceeding 10% of the
salary of the
employee in the p.y
shall be allowed as
deduction in relation
to assessment year
2012-13 and
subsequent years.
The employer will
have no hesitation in
contributing towards
the scheme and thus
employees will be
benefitted.

Amendments of provisions relating to deemed income of
certain companies u/s. 115jb
115jb(1) Provides that
where the income
tax payable on total
income by a
company is 18% of
its book profit.
Under the
amendment of
section 115jb the
rate of income tax
has been increased
from 18% to 18.5%
Earlier: 18% (Tax) +
7.5% (Surcharge on
Tax) + 3% (Cess on
Tax + Surcharge) =
19.93%
Now: 18.5% (Tax) +
5% (Surcharge on
Tax) + 3% (Cess on
Tax + Surcharge) =
20 %

115jb(6) 115jb shall not
apply to the income
accrued from any
business carried on,
or services
rendered by an
entrepreneur or a
developer ,in a unit
or SEZ.
Accordingly MAT
will be levied on
such entrepreneur
or a developer, in a
unit or special
economic zone in
relation of
assessment year
2012-2013 and
subsequent years
Tax revenue of
government will
increase and the
entrepreneur,
developer and SEZ
will have to more
tax.

Alternate minimum tax for limited liability
Partnership,introduced.
chapXII-BA At present MAT is
levied on certain
companies u/s
115jb
It provides for the
levy of AMT on
limited liability
partnership in
relation to
assessment year
2012-2013 and
subsequent years.
Now LLP have to
pay more tax @ the
rate of 18.5% plus
additional
surcharge. The
limited liability
partnerships have
not been a success
and this move will
further push
businesses away
from it.
The amount of tax
credit allowed to be
carried forward
upto 10th
assessment years.

section provision new provision impact/comment
115-0(6) Existing provisions of section
115-0(6), an exemption is
allowed from payment of tax on
distributed profits [Dividend
Distribution Tax (DDT)] in
respect of the total income of an
undertaking or enterprise
engaged in developing or
developing and operating or
developing, operating and
maintaining a Special Economic
Zone for any assessment year on
any amount declared, distributed
or paid by such Developer or
enterprise, by way of dividends
(whether interim or otherwise)
on or after 1st April, 2005 out of
its current income. Such
distributed income is also
exempt from tax under section
10(34) of the Act.
It is further proposed
to discontinue
the availability of exe
mption from dividend
distribution tax in the
case of SEZ
Developers under the
Income-tax Act as
well as the SEZ Act
for dividends declared,
distributed or paid on
or after 15th June,
2011.
It will increase the tax
liability of
shareholder. Investors
will less motivate to
invest in Sez company
share.

SECTION PROVISION NEW PROVISION IMPACT
115R(2) MF shall be liable to
Additional Income Tax
on Distributed Income.
Current rate is 25% in
case of all recipient
25% ‐ in the case
of Individual and
HUF recipient
30% ‐ In case
of any other
recipient other
than Individual and
H.U.F
This will certainly
impact the flow of
funds from corporates
into mutual and debt
funds.

Amendments to provisions pertaining to
deduction from gross total income
SEC 80CCE Provides that
aggregate amount
of deductions u/s
80C,80CCC and
80CCD shall not to
exceed Rs. 1,00,000
The contribution
made u/s 80CCD by
the central
government or any
other employee, to
a pension scheme
shall not included in
the limit of
deduction of
Rs.1,00,000 to
assessment year
and subsequent
years.
This will demotivate
people to invest in
notified pension
scheme.

SEC 80CCF Deduction is
allowed to an
individual or an
HUF to the extent
of Rs.20000 paid or
deposited during
the previous year
relevant to
assessment year
beginning on 1-4-
2011 as
subscription to long
term infrastructure
bonds
Deduction is
extended to such
subscription made
during the previous
year relevant to
assessment year
beginning on 1-4-
2012. This
deduction will be
addition to the
existing overall limit
of deduction for
savings up to Rs.1
Lacs
Here the assessee
will be motivated to
invest in Long term
infrastructure
bonds as the limit
has increased.

Sec 80-IA It provides that if
there is any profit or
gain and the
commencement
period is on or after
1-4-1993 but not
later than 31-3-2011
then in any section
whether it be 80-
IA(iv)(a),(b),(c) they
will get deduction
It provides that if
there is any profit or
gain and the
commencement
period is on or after
1-4-1993 but not
later than 31-3-2012
then in any section
whether it be 80-
IA(iv)(a),(b),(c) they
will get deduction
.So here the date has
been extended from
31-3-2011 to 31-3-
3012
Here we can say that
the assessee if
commences
between 1-4-2011 to
31-3-2012 then also
will get deduction.

Section no Existing provision New Provision
Sec 80-IB It provides for deduction in
respect of profit or gain
from certain industrial
undertaking other than
infrastructure
development undertaking
.At present the deduction
is 100% for 7 consecutive
assessment years
After amendment the
section is not applicable to
blocks licensed under a
contract awarded after 31-
3-2011

Amendments relating to certain
special cases
Sec 115A(1)(a) Income tax payable
in respect of
interest received by
Non-
resident/Foreign
company from an
Infrastructure debt
fund liable to
income tax at a flat
rate of 20%
Income tax payable
in respect of
interest received by
Non-
resident/Foreign
company from an
Infrastructure debt
fund liable to
income tax at a flat
has changed to 5%
fro 20%
This will motivate
the foreign
investors to invest
in India in
Infrastructure
Bonds.

Sec 115BBD Rate of tax on
certain dividends
from foreign
company by an
Indian company is
taxable at 30% as
income tax
+surcharge if any
and additional
surcharge
The newly inserted
section specifies
that if the total
income of any
Indian company for
the previous year
relevant to
assessment year
beginning on 1-4-
2012 and any
dividend declared
or paid to forig
company will be
taxable at 15%
This will motivate
the Indian company
to invest abroad .

SECTION PROVISION NEW PROVISION IMPACT
115R(2) MF shall be liable to
Additional Income Tax
on Distributed Income
. Current rate is 25%
in case of all
recipient
25% ‐ in the case
of Individual and
HUF recipient
30% ‐ In case
of any other
recipient other
than Individual and
H.U.F
This will certainly
impact the flow of
funds from corporates
into mutual and debt
funds.

SEC 139(1) At present the due
date of filing the
return of income of
various categories is
30th sept of the A.Y
Newly inserted clause
(aa) o SEC 139(1)
provides that from the
w.e.f 1-4-2011 in the
case of the assessee
being a company
which is required to
furnish report
referred in sec 92E the
due date of filing the
return of income is
extended to 30th
November of the A.Y
The no of defaulters
may be reduced.

Section no Existing provision New Provision Comment/impact
139(1C) Every person if his
total amount of
income during the
previous year exceeds
the maximum amount
which is not
chargeable to tax then
they are required to
furnish the return of
income
It tells that central
government is
empowered to
exempt by notification
in the official gazette
any class or classes of
person from the
requirement of
furnishing a return of
income.
The provision is
targeted to relax
salaried class who do
not have any other
income as their data is
already
submitted to
government through
TDS returns submitted
by employers.

Section no Existing provision New Provision
SEC139(4C) Every person specified in this
section will have to file its
return of income in the
prescribed form if income
without giving the effect of
exemption of section 10
exceeds the maximum amount
not chargeable to tax then
they have to furnish the return
From w.e.f 1-06-2012 the
existing provision have been
made applicable to (a) Body or
authority or board or trust or
commission (b) infrastructure
debt fund .

SEC 111A In case of domestic
company if the
income exceeds 1
crore then the
surcharge is at the
rate of 7.5% of such
income tax.
According to the new
provision the rate of
surcharge has been
decreased to 5%
Eg.1.5 cr
In case of other than
domestic company if
the income exceeds
1crore then the
surcharge is at the
rate of 2.5% of such
income tax
According to the new
provision the rate of
surcharge has been
decreased to 2%

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