This year's union budget FY 2009-10 (AY10-11) did not bring many expected reliefs and cheers for the common taxpayers and has provided some marginal reliefs. Here is Team eLagaan's perspective of various income tax changes proposed in budget:Basic Exemption Limit:
- * Rs.2.40lacs for Senior citizens (earlier Rs.2.25 lacs). This will provide a tax relief of about Rs.1545.
- * Rs.1.90lacs for Women/ Females (earlier Rs.1.80lacs). This will provide a tax relief of about Rs.1030.
- * Rs.1.60lacs for All other category of Individual tax payers (earlier Rs.1.50lacs). This will provide a tax relief of about Rs.1030.
- * Surcharge on Income tax has been scrapped. Individuals having taxable invomce over Rs.10 lacs will benefit more from this as their tax incidence at the highest slab has declined to 30.09% from 33.99% (savings of about 3.9%)
- * FBT has been scrapped for companies. This could result in tax on many employee benefit perks to be shifted to employees. The list of perks is yet to be released, but major perks affected could be ESOP (employee stock options) and contributions to super-annuation funds etc.
- * Deductions u/s 80DD in respect of maintenance, including medical treatment, of a dependent who is a person with severe disability has been increased to Rs.1 lac from the present limit of Rs.75,000
- * Deductions u/s 80E in respect of interest on loans taken for pursuing higher education in specified fields of study has been extended to cover all fields of study, including vocational studies, pursued after completion of schooling
- * Non-cash gifts will be taxed. As per the new proposal, any non cash gift (e.g. property, shares and securities, jewellery, archeological collections, paintings and gold etc.) received from a non-relative where the value is in excess of Rs 50,000 in a particular year will be considered as income in the hands of the recipient. However, the proposal provides for some exclusion, which includes receipts on occasion of a marriage or by will or inheritance or from certain specified authorities (educational or medical institutions among others)
- * If you don’t have a permanent account number (PAN), your tax deducted at source (TDS) could be higher. The penal rate will be a minimum 20%.
- * Saral-2 is likely to re-introduced soon
Please remember that these changes are applicable only for next year returns (current year's income). For this year returns none of these will apply.
But why to worry? eLagaan will keep track of all the changes and you need not worry or know about their applicability. Simply use eLagaan for preparing your tax returns and BE 100% SURE that all applicable laws and changes are updated in our system.