The document summarizes key amendments to the Indian Income Tax rates and rules for the 2010-11 assessment year. It outlines new tax rates for individuals, HUFs, women, senior citizens, firms, domestic companies, and foreign companies. It also summarizes changes to sections related to charitable purposes, tax holidays, research and development deductions, cash payment restrictions, partner remuneration, TDS defaults, gift tax, Chapter VI-A deductions, disability deductions, pension contributions, education loans, electoral trusts, MAT rates, LLP taxation, advance tax thresholds, dividend distribution tax, and wealth tax limits.

1. Bombay Chartered Accountants Society
Lecture Meeting on
Filing of Income Tax Returns
Assessment Year 2010-11
Relevant amendments
By
Chetan Shah
23.06.2010

2. Tax Rates – Threshold Limit
Particulars New Rates
(i) Individuals & Income Rate of Tax
Hindu Undivided Upto Rs.1,60,000 Nil
Families (HUF’s) Rs.1,60,001 -Rs.3,00,000 10%
Rs.3,00,001 - Rs.5,00,000 20% + 14000
Above Rs. 5,00,000 30% + 54000
(ii) For Women Income Rate of Tax
resident in India & Upto Rs.1,90,000 Nil
below 65 years of Rs.1,90,001 -Rs.3,00,000 10%
Rs.3,00,001 - Rs.5,00,000 20% + 11000
age Above Rs. 5,00,000 30% + 51000
(iii) For Senior Income Rate of Tax
Citizens (individual Upto Rs.2,40,000 Nil
having age of 65 Rs.2,40,001 -Rs.3,00,000 10%
Rs.3,00,001 - Rs.5,00,000 20% + 6000
years and above) Above Rs. 5,00,000 30% + 46000
(iv) For Firms Income as per Income Tax Act 30%
2

3. (v) For If Net Income exceeds Rs.1 crore Rate of tax is 30%
Companies Surcharge @ 10%
If Net Income is less than Rs.1 crore
No Surcharge
(v) For If Net Income exceeds Rs.1 crore Rate of tax is 40%
Foreign Surcharge @ 2.5%
Companies If Net Income is less than Rs.1 crore
No Surcharge
Note:
• No SURCHARGE is applicable for Individuals, HUFs & Firms.
• Education cess and Higher education cess remains same as before.

4. Definition of Charitable purpose
The definition of “charitable purpose” is amended
to exclude certain business related activities from
“advancement of any other object of general
public utility”. However, in the Finance Act, 2010 a
retrospective amendment is made to the effect:
That if the aggregate value of the receipts from
such activities is not more than Rs. 10,00,000/-
during the year, such purpose would still be
charitable.
4

5. Extension of time limits u/s 10A and
10B
• Extension of Tax Holiday to Units in Free Trade Zones & Export
Oriented Undertakings Extended from Assessment Year 2010-
11 to 2011-2012.
5

6. Section 10AA - Formula for calculation of
exempted profit of a SEZ Unit
• Profit of the Unit in SEZ * Export Turnover of Unit in SEZ /
Total Turnover of business carried on by the Undertaking
(Unit)
• Carried on by the assessee is replaced by undertaking (unit)

7. Sec 35(2AB) Weighted deduction on In-
House Research and Development Facility
• This provision is now applicable to all businesses
engaged in manufacture or production of articles or
things, except those specified in the Eleventh
Schedule instead of certain specified businesses only.

8. 40A(3) – Disallowance for Payment >
Rs. 35,000
• Payments made to transporters otherwise
than by account payee cheque or Bank draft if
payment or aggregate payments made during
a day exceeds Rs. 35,000. This change is
effective from 1.10.2009
8

9. Sec 40(b)(v)
Remuneration to Partners
In case of partnership firms – it shall be the
aggregate of the following viz:
• Upto first Rs. 3,00,000/- of Book Profit or in case of a
loss.-- higher of Rs. 1,50,000 or 90% of Book Profit
will be allowed as amount of deduction.
• On the balance of the Book Profit, 60% of Book Profit
will be allowed as deduction.
Note: The above limits are also applicable to Limited
Liability Partnership.

10. Deduction u/s. 40(a)(ia)
PRESENT POSITION AMENDED POSITION
• Expenditure allowable if • Relevant expenditure is
TDS is paid before allowable if TDS is paid
March 31 in cases before the due date of
where tax is deductible filing of return of
during the months April income irrespective of
to February the month in which the
• Where tax is deductible tax has been deducted /
during the month of deductible.
March – then due date
of filing return

11. Higher Rate of TDS – u/s. 206AA
• Every deductee to furnish PAN
• In case of failure tax to be deducted at the
applicable rate or the rate of tax in force or
20%, whichever is the highest.
• Declarations in Form 15G / 15H will be in valid
if no PAN of the deductee quoted.
• Implication in disallowance u/s. 40(a)?

12. Amendment to Section 50C
• The word “assessable” inserted w.e.f
1.10.2009 in section 50C for taxing those
transactions which are not registered with
Stamp Duty Authority.

13. Taxation of Gift received in Kind i.e. without consideration as
Income From Other Sources – Section 56(vi)(vii)
In case of Taxation Effect
 Gifts received by individual / Stamp Duty value in case of
HUF in kind without consideration immovable property & fair market
(immovable or movable property) value in case of movable property
value of which exceeds Rs. 50,000/- shall be taxed as income of the
from non – relative or on instances recipient.
other than the occasion of marriage
or under a will.
Gifts received for a consideration Aggregate fair market value of
which is less than the aggregate fair movable property in excess of the
market value of the movable property consideration
exceeding Rs. 50,000/-

14. Amendments in Section 80A
• Providing for restrictions about more than one
deductions and the extent of allowance thereof.
W.e.f A.Y. 2003-04.
• Non-allowance of deduction in case of failure to
make claim in the return of income. W.e.f. A.Y. 2003-
04.
• Providing for arms length price in respect of goods
and services exchanged between two units of an
assessee, of which one is eligible for Chapter VI-A
deductions.

15. Expenditure incurred in respect of
individual and dependent who is suffering
from Severe Disability.
Deduction available in respect of Sec 80 DD and
80U ie: Expenditure incurred in respect of
maintenance, including medical treatment of a
dependent and for the individual himself with
SEVERE DISABILITY has been amended from
Rs.75,000/- to Rs.1,00,000/-.

16. Deduction under Sec 80CCD
Contribution to Notified Pension Schemes
• Deduction available to all assessee.
• This will be effective from 1st April, 2010.
• The limit of 10% of salary on contribution to the
scheme continues only for salaried employees
and is inconsistent for other individuals.

17. Deduction under Sec 80E (Interest on
Educational Loan).
• Deduction in respect of INTEREST ON LOAN taken for
pursuing ANY COURSE OF STUDY, pursued after passing
SSC or it’s equivalent from any Govt. recognized school,
board or university instead of pursuing full time studies for
any graduate / post graduate course in SPECIFIED fields of
study in the previous year.

18. Deduction under Sec 80GGB AND
80GGC
• Contributions received by an electoral trust would be treated
as its income, but voluntary contributions received would be
exempt from tax if electoral trust distributes 95% of donation
received by it during the year to registered political party
along with surplus, brought forward from the earlier years.
• Donations to such electoral trusts would qualify for 100%
deduction u/s 80GGB and 80GGC for all assessees.

19. Minimum Alternate Tax (Sec 115JB)
• Enhancement in MINIMUM ALTERNATE
TAX (MAT) for COMPANIES from 10% to
15%
• Carry Forward of MAT Credit is amended
from 7 years to 10 years.

20. Limited Liability Partnership (LLP)
• Limited Liability Partnership Act; 2008 has come into effect in
2009. It is proposed to incorporate the taxation of LLP similar
to the general partnership firm, i.e. taxable in the hands of the
firm and exempt in the hands of the partners.
• LLP Act provides for nomination of “Designated Partners” who
will be signing the income tax returns of LLP. However, if there
is no Designated Partners then any partner can sign the
return.

21. Increase in Threshold Limit for
Advance Tax
• Presently, an assessee is liable to pay advance
tax in case his tax liability (net of TDS/TCS)
during the year exceeds Rs. 5,000.
• This limit has been enhanced to Rs. 10,000.

22. Relief in Dividend distribution tax
• Relief provided if dividend distributed to New
Pension Scheme Trust u/s 115O
• There is no provision for passing on such saving in
DDT by the company to NPS Trust.
22

23. Fringe Benefit Tax
FBT (Fringe Benefit Tax) has been ABOLISHED
w.e.f 01.04.09. The taxation of fringe benefits
as perquisites in the hands of employees shall
continue to be charged.
1st installment of FBT paid in F.Y. 2009-10 will
be treated as advance tax and can be adjusted
accordingly.
23

24. Increase in Threshold limit for
Wealth Tax
• The limit of Rs. 15,00,000/- has been
enhanced to Rs. 30,00,000/-.

25. THANK YOU!!
25