12 Major Expectations from Budget-2017 for Individuals and Corporate

BUDGET EXPECTATIONS

 

Post-demonetization, Govt. is likely to increase the basic exemption limit of tax slabs for taxpayers.

POEM and GAAR are likely to be deferred by one year.

Standard deduction may make a comeback for salaried class taxpayers.

Rate of service tax likely to be increased to 18% to align it with proposed rates in GST.

No major changes expected in Indirect Tax regime as GST is likely to be introduced soon.

Corporate tax rate is likely to be reduced from 30% to 28%. Lower taxes may encourage people to show their real income and discourage generation of black money.

Rate of presumptive profit under Sec. 44AD shall be reduced to 6% for digital receipts to incentivize small traders or businesses.

Rate of presumptive profit is likely to be reduced for professionals covered under Sec. 44ADA.

Turnover limit of tax audit is likely to be increased to Rs 50 lakhs for professionals to align it with threshold given under Sec. 44ADA.

MAT is likely to be phased-out gradually with the phasing out of various incentives.

Amendments likely to be made on indirect transfer provisions to provide relief to FPIs.

Scope of TDS/TCS likely to be extended to include uncovered sectors where black money gets generated.

Source: Taxmann

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Download Short Notes on Tax Free Income Section-wise for all Taxpayee as amended in Finance (No.2) Act, 2014 for Asstt. Year 2015-16.

The Finance (No.2) Act, 2014 has been recently amendment by the Government (CBDT) and as per these amendments the Income Tax Free Income level is very high.  Apart from this we all known that Income is payable on all types of Incomes earned by Taxpayee in India even-though, there are some exceptions to avoid this rule and some Incomes have been specially exemption from Income Tax.  Such Income is referred to as Income Tax Free Income.  The most popular Tax Free Income is namely :-

• Agricultural Income (Section 10(1)).
• Amount received by a member of the HUF from the income of the HUF, or in case of impartible estate out of income of family estate [Section 10(2)]
• Share of profit received by a partner from the firm [Section 10(2A)]
• Certain interest to non-residents [Section 10(4)]
• Interest on notified savings certificates [Section 10(4B)]
• Leave travel concession [Section 10(5)]
• Remuneration received by specified diplomats and their staff [Section 10(6)(ii)]
• Salary of a foreign employee and non-resident member of crew [Section 10(6)(vi),(viii)]
• Remuneration of a foreign trainee [Section 10(6)(xi)]
• Tax paid on behalf of foreign company deriving income by way of royalty or fees for technical services [Section 10(6A)]
• Tax paid on behalf of foreign company or non-resident in respect of other income [Section 10(6B)]
• Tax paid on behalf of foreign Government or foreign enterprise deriving income by way of lease of aircraft or aircraft engine [Section 10(6BB)]
• Technical fees received by a notified foreign company [Section 10(6C)]
• Allowance/perquisites to Government employee outside India [Section 10(7)]
• Income of foreign Government employee under co-operative technical assistance programme [Section 10(8)]
• Remuneration or fees received by a non-resident consultant/its foreign employees [Section 10(8A),(8B)]
• Income of a family member of an employee serving under co-operative technical assistance programme [Section 10(9)]
• Death-cum-retirement gratuity received by Government servants [Section 10(10)(i)]
• Gratuity received by a non-Government employee covered by Payment of Gratuity Act, 1972 [Section 10(10)(ii)]
• Gratuity received by a non-Government employee not covered by Payment of Gratuity Act, 1972 [Section 10(10)(iii)]
• Pension [Section 10(10A)]
• Leave salary [Section 10(10AA)]
• Retrenchment compensation [Section 10(10B)]
• Compensation for Bhopal Gas Leak Disaster [Section 10(10BB)]
• Compensation on account of any disaster [Section 10(10BC)]
• Payment at the time of voluntary retirement [Section 10(10C)]
• Tax on perquisites paid by the employer [Section 10(10CC)]
• Amount paid on life insurance policy [Section 10(10D)]
• Exemption in respect of amount received from public provident fund/statutory provident fund/recognised provident fund/un-recognised provident fund [Section 10(11)/(12)]
• Payment from approved superannuation fund in specified circumstances and subject to certain limits [Section 10(13)]
• House rent allowance [Section 10(13A)] 
• Prescribed allowances or benefits [Section 10(14)]
• Interest on securities [Section 10(15)]
• Lease rent of an aircraft [Section 10(15A)]
• Educational scholarship [Section 10(16)]
• Daily allowance to a Member of Parliament [Section 10(17)]
• Awards [Section 10(17A)]
• Pension to gallantry award winner [Section 10(18)]
• Family pension received by the family members of armed forces [Section 10(19)]
• Annual value of one palace [Section 10(19A)]
• Income of local authority [Section 10(20)]
• Income of research association [Section 10(21)]
• Income of a news agency [Section 10(22B)]
• Income of a professional association [Section 10(23A)]
• Income received on behalf of Regimental Fund [Section 10(23AA)]
• Income of a fund established for welfare of employees [Section 10(23AAA)]
• Income of pension fund [Section 10(23AAB)]
• Income from Khadi or village industry [Section 10(23B)]
• Income of Khadi and Village Industries Boards [Section 10(23BB)] 
• Incomes of statutory bodies for the administration of public charitable trust [Section 10(23BBA)] 
• Income of European Economic Community [Section 10(23BBB)]
• Income of SAARC fund [Section 10(23BBC)]
• Income of Secretariat of Asian Organisation of Supreme Audit Institutions [Section 10(23BBD)]
• Income of Insurance Regulatory and Development Authority [Section 10(23BBE)]
• Income of North - Eastern Development Financial Corporation Limited [Section 10(23BBF)]
• Income of Central Electricity Regulatory Commission [Section 10(23BBG)] 
• Income of the Prasar Bharati [Section 10(23BBH)]
• Income of certain national funds [Section 10(23C)(i)/(ii)/(iii)]
• Income of National Foundation for Communal Harmony [Section 10(23C)(iiia)], Section 10(23C)(iiiad), Section 10(23C)(vi)
• Income of Hospital [Section 10(23C)(iiiac)/(iiiae)/(via)]
• Income of Charitable Institution or Fund [Section 10(23C)(iv)]
• Income of religious/charitable trust [Section 10(23C)(v)]
• Income of mutual fund [Section 10(23D)]
• Income of a securitisation trust [Section 10(23DA)]
• Income of notified investor protection fund [Section 10(23EA)]
• Income of Credit Guarantee Fund Trust [Section 10(23EB)]
• Income of the notified investor protection fund set - up by commodity exchange [Section 10(23EC)]
• Income of Investor Protection Fund set by a depository [Section 10(23ED)]
• Income of a venture capital fund or a venture capital company from investment in a venture capital undertaking [Section 10(23FB)]
• Income of a of a Business Trust [Section 10(23FC)]
• Distributed Income of a Unit Holder from the Business Trust [Section 10(23FD)]
• Income of a registered trade union [Section 10(24)]
• Income of provident fund [Section 10(25)]
• Income of the Employees’ State Insurance Fund [Section 10(25A)]
• Income of a member of a Scheduled Tribe [Section 10(26)]
• Income of a “Sikkimese” individual [Section 10(26AAA)]
• Income of an Agricultural Produce Marketing Committee/Board [Section 10(26AAB)]
• Income of corporation or other body or institution or association established for promoting the interest of members of Scheduled Caste, etc. [Section 10(26B)]
• Income of corporation established for promoting interest of minority caste [Section 10(26BB)]
• Income of corporation established for ex-servicemen [Section 10(26BBB)]
• Income of a co-operative society formed for promoting the interests of the members of Scheduled Castes or Scheduled Tribes [Section 10(27)]
• Income of coffee board, rubber board, etc. [Section 10(29A)]
• Subsidy from the Tea Board [Section 10(30)]
• Income of minor [Section 10(32)]
• Capital gains on transfer of US 64 [Section 10(33)]
• Dividends and interest on units [Section 10(34)/(35)]
• Income of a shareholder on account of buy back of shares by the company [Section 10(34A)]
• Income of an investor received from a securitisation trust [Section 10(35A)]
• Capital gains in case of compulsory acquisition of urban agricultural land [Section 10(37)]
• Long - term capital gains on transfer of equity shares or units of an equity oriented mutual fund or a unit of a business trust covered by securities transaction tax [Section 10(38)]
• Income from international sporting event [Section 10(39)]
• Grants received by specified subsidiary company [Section 10(40)]
• Income of certain non - profit body or authority [Section 10(42)]
• Loan in the case of reverse mortgage [Section 10(43)]
• Income of New Pension System Trust [Section 10(44)]
• Any notified allowance or perquisite paid to the Chairman/retired Chairman or any other member/retired member of the UPSC [Section 10(45)]
• Exemption of specified income of notified body/ authority/trust/board/commission [Section 10(46)]
• Any income of a notified infrastructure debt fund set-up in accordance with prescribed guidelines [Section 10(47)]
• Income received by certain foreign companies in Indian currency for import of crude oil etc. [Section 10(48)]
• Tax exemption to National Financial Holdings Company Limited [Section 10(49)]

Other important exemptions 

Apart from above discussed exemption of section 10 following is the list of other important exemptions:

• Section 10A provides for exemption in respect of income of newly established undertakings in free trade zone or electronic hardware technology park or electronic software technology park.
• Section 10AA provides for exemption in respect of income of newly established units in Special Economic Zones. 
• Section 11 and 12 provide exemption in respect of income of a public charitable or religious trust.
• Section 13A provides exemption in respect of income of a political party.
• Section 13B provides exemption in respect of income of an electoral trust. 

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Though income of Chamber of Commerce held as business receipt, yet Sec. 11 relief available as profit motive absent

The concept behind Section 28(iii) is to cut at the mutuality principle being relied on in support of a claim for exemption, when the assessee was actually deriving income or making profits as a result of rendering specific services for its members in a commercial way.

The reason for the introduction of Section 28(iii) of Act, to ignore the principle of mutuality and reach the surplus arising to the mutual association and this is clear from the fact that these provisions are confirmed to services performed by the association "for its members". Such income would either be charged as business income or under the residual head, depending upon the question whether the activities of the association with the non-members amount to a business or otherwise.

Section 28(iii) constitutes certain income of the association to be business income without affecting the scope of the exemption under Section 11.

Section 2(15) which incorporates the definition of "charitable purposes" simply shows that several mutual associations may also fall within the definition.

The receipts derived by a chamber of commerce and industry for performing specific services to its members, though treated as business income under Section 28(iii) would still be entitled to the exemption under Section 11 read with Section 2(15) of the Act, provided there is no profit motive.

Thus, assessee being a charitable Institution carrying on the object of promotion and development of trade and commerce and which is not involved in the carrying on of any activity in the nature of "business", the said section 28(iii) of the Act does not apply.

Hon'ble Apex Court in the earliest case of Andhra Chamber of Commerce had clearly laid out the principle that if the primary purpose of an Institution was advancement of objects of general public utility, it would remain charitable even if an incidental or ancillary activity or purpose, for achieving the main purpose, was profitable in nature. The basic principle underlying the definition of "charitable purpose" remained unaltered even on amendment in the section 2(15) of the Act w.e.f. 01/04/2009, though the restrictive first proviso was inserted therein.

Sournce: www.taxmann.com

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If Income exempt u/s. 10 then no relief u/s. 11 - IT

For availing exemption under section 11, income derived from property held under trust has to be considered irrespective of fact that some of income so derived is also exempt under section 10

In terms of clause (iia) of proviso to section 13(1)(d), mere accretion of existing holding of shares by way of bonus shares or acceptance of donation in kind or any asset not conforming to provisions of section 11(5) will not make trust lose tax exemption if trust/institution converts asset not conforming to section 11(5) into permissible investment within one year from end of financial year in which such bonus shares or other assets are received

Violation of section 13(1)(d) and section 13(2)(h) would disqualify exemption of income from investment in non-conforming of section 11(5) but not entire income of trust if other income of trust otherwise fulfils condition for exemption

Sections 11 and 13 do not operate as overriding effect to section 10 and, thus, once conditions of section 10 are satisfied, benefit of exemption of income cannot be denied by invoking provisions of sections 11 to 13

Education grant given to Indian students for studying abroad fulfils conditions of application of money in order to claim exemption under section 11.

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Income Tax Denied Maternity Hopistal relief u/s. 10(23C).

Income Tax, Section 10(23C) benefit can't be granted to maternity hospital as child birth is a natural process of God which in no way could be said to be any illness as contemplated under section 10(23C)(iiiae)

• In the instant case the assessee was running a maternity hospital in which services were provided to patients on nominal charges. In the cross objections it made a claim for deduction under section 10(23C)(iiiae). Thus, the moot question that arosed before the ITAT was as under:
• Whether assessee was eligible to claim deduction under section 10(23C)(iiiae) and whether services provided by assessee in relation to maternity hospital could be termed as services provided for illness or disease as envisaged under section 10(23C)(iiiae)?

The Tribunal held as under:

1. The child birth is the natural process of God and it certainly is the God's grace which is extended to sustain us through it. It is the act of God who designs a child conceived in the womb to be born into this world;
2. In olden days deliveries of children were perfectly conducted by midwives at home, but in the modern age, it is only because the anxiety of people that they would not be able to manage the discomfort or pain during labour, they choose to take better facilities in the hospitals in presence of Doctors for this purpose;
3. Thus, the assessee's maternity hospital had been facilitating the deliveries, i.e., a natural process of God, which in no way could be said to be any illness to be treated in the hospital as envisaged under section 10(23C)(iiiae);
4. The CIT(A) rightly disallowed the claim of assessee as the ingredients of section 10(23C)(iiiae) were not fulfilled. Thus, the cross objections of the assessee had no merit and were accordingly, to be dismissed.

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Relief on Previous Arrears or Advance of Salary.

Under section 192(2A) where the assessee, being a Government servant or an employee in a company, co-operative society, local authority, university, institution, association or body is entitled to the relief under Section 89(1) he may furnish to the person responsible for making the payment referred to in Para (3.1), such particulars in Form No. 10E duly verified by him, and thereupon the person responsible, as aforesaid, shall compute the relief on the basis of such particulars and take the same into account in making the deduction under Para(3.1) above.

Here "University means a University established or incorporated by or under a Central, State or Provincial Act, and includes an institution declared under section 3 of the University Grants Commission Act, 1956(3 of 1956), to be University for the purposes of the Act.

With effect from 1-4-2010 (AY 2010-11), no such relief shall be granted in respect of any amount received or receivable by an assessee on his voluntary retirement or termination of his service, in accordance with any scheme or schemes of voluntary retirement or in the case of a public sector company referred to in section 10(10C)(i) (read with Rule 2BA), a scheme of voluntary separation, if an exemption in respect of any amount received or receivable on such voluntary retirement or termination of his service or voluntary separation has been claimed by the assessee under section 10(10C) in respect of such, or any other, assessment year.

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Get a view of your Income Tax Demand for Taxpayee who paid short amount of Income Tax.

As a Taxpayer friendly initiative, a facility to view details of Arrears Demand of taxpayers as communicated by their Jurisdictional Assessing Officers (A.O.) to the Central Processing Center (CPC) is now enabled on the e-filing website i.e. https://incometaxindiaefiling.gov.in/portal/index.do. Taxpayers can now log in to ‘My Account’ window and view their Arrears Demand.

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How to adjust losses while Filing of Income Tax Return?

The Income Tax Act allows the Taxpayers under certain Conditions to set off loss against Income hereby reducing the net tax liability. If such loss can not be fully set off, the remaining balance can even be carried forward for set off in the future years. It is necessary for every taxpayers to properly understand and take advantage of the facilities in this regard.

Inter Source Adjustment:

There are five heads of income under which any taxpayer can earn income.
1. Salary
2. House Property
3. Income From Business or Profession
4. Capital Gains and
5. Income from Other sources.

However, a person could suffer losses from other heads of income. Now the first and foremost rule is that loss under on head of income has to be first adjusted against any income from the same head this call Inter Source Adjustment.

Inter Head Adjustment:
Now say after setting off the loss as above, there still remains some balance. This balance loss can then be set off against income from other heads called Inter Head Adjustment. Now, such a loss may be adjusted against salary income or say income from Business if any. There are two exceptions to the rule of Inter Head-Adjustment

• Losses under Capital Gains can not be set off against income from any other head.
• Loss from business or profession can not be set off against salary income.
  

Carry Forward of Losses:
Any Loss that can not be set off either against the same head or under other heads because of inadequacy of income, may be carried forward to be set off against income of the subsequent year. Such a carry forward exercise may be done for 8 Years. After 8 years, if the loss has not yet been fully set off, it has to be written off and cannot be used for tax saving.

The following table encapsulates the above discussion:

Type of loss to be carried forward to subsequest year(s)	Income against which carried forward loss can be set off in nest year(s)	For who many years loss can be carried forward
1. House Property Loss 2. Business Loss 3. Capital Loss a) Short-Term Capital Loss b) Long Term Capital Loss	Income under the head “ Income from House property Any Business Profift Any Taxable Income under the head “Capital Gains” Long Term Capital gains only	8 Yewars 8 Years 8 Years 8 Years

Adjustment of Loss under the Head Capital Gains:
The loss under the head of Capital Gains is that they have a boundary i.e. they have to be adjusted against other capital gain income only and other income are not available for the setting off. The second condition in this regard is that long-Term capital loss can only be adjusted against long-term capital gain.

Conclusion:
Lastly, note that for being eligible to carry forward and set-off any loss, it is important to file the Tax Return by the specified due date. If the loss return is submitted after the due dates, the Board may condone the delay only if it is satisfied that it was due to genuine hardship on the part of the taxpayer (Circular No. 8/2011 dated 16.05.2001).

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Get Tax Relief u/s. 89 (1) of Income Tax Act on Previsous Years Salary Arrears

Friends, near about every state of India implemented 6th pay commission and thus the State Government is liable for 6th Pay arrears in Financial year 2011-12 and onwards. Due to arrears, income tax of employees in respect of financial year 2011-12 is going up and employee are receiving very less net amount after deduction of tax.

Therefore, employee unkown and unaware from taking of arrears which can be breakup in respective years and tax relief can be claimed u/s 89(1), but, most of them have no idea, how to calculate relief under section 89(1) of income tax act. We have prepared a 89(1) relief calculator for arrears received in 2011-12 and arrears related to financial year 2005-06 onwards. This calculator is under test condition so not available for download yet. For the time being you can use it online only.

Calculation Sheet

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New TaxNet Prooject-2013 by Income Tax Department

NEW TAXNET PROJECT 2013
Dated: 10.05.2012

The TAXNET Project (WAN & LAN) of Income Tax Department (ITD), operational from 2008, includes MPLS network (including 155 VSAT locations) at more than 700 locations spread in more than 500 cities across the country. The Department has now embarked upon conceptualizing and implementing the next phase of TAXNET Project, which is expected to commence from 2013. With this background, ITD would like to solicit inputs from the industry with regard to the following:

1. Technology innovation.
2. Terrestrial reach. For this purpose the current location details of the ITD Offices on TAXNET is enclosed.
3. Project implementation period with an objective to minimize the transition period.
4. Any other suggestions.

The response may be mailed to prabhatgupta@incometaxindia.gov.in by or before 21st May 2012.

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A view about Effect of Budget on Income Tax For Financial Year 2012-13.

Year Budget Effected on Tax Policies for nest Financial Year all taxpayee knows although it more effected on Income Tax except other Tax i.e. Service Tax, Excise Tax etc. A common Man watches all on Budget every year only for projection of income and saving of tax. Some Important Changes in this Financial Year 2012-13 by Budget-2012 are as follows:

1. Rajiv Gandhi Equity Savings scheme: It will provide income tax deduction of 50% for those who invest upto Rs.50,000 directly into equities and whose annual income is less than Rs.10 lakh, subject to a three -year lock in.
2. Implementation of Direct tax code has again been deferred and won’t be applicable from 1st April, 2012.
3. Exemption limit raised to Rs 2 lakhs from Rs 1.8 lakh. 30% slab now starts from 10 lakh rather than 8 lakh earlier. Men and women now have same tax slab. No gender bias.
4. Within the existing limit for deduction allowed for health insurance, Rs 5000 deduction for preventive health checkup is allowed.
5. Deduction of upto 10,000 for interest from savings bank accounts under a new section 80TTA. 
6. Senior citizens not having income from business proposed to be exempted from payment of advance tax.
7. Securities Transaction tax (STT) reduced to 0.1% from 0.125%
8. Exemption from Capital Gains tax on sale of residential property, if sale consideration is used for subscription in equity of a manufacturing SME for purchase of new plant and machinery.
9. Service tax rate increased to 12% from current 10%. This would mean more taxes in your mobile, telephone, internet, restaurant bills and life insurance premium etc.
10. Import duty free amount limit raised to Rs 35000 from 25000. So guys coming from abroad can bring more stuff.
11. Gold to be more expensive. Customs duty on standard gold raised from 2 per cent to 4 per cent.
12. Duty on large cars raised to 27%, so cars would be more expensive now.
13. Tax saving mutual funds (ELSS) deduction to continue.
14. 80C deduction on insurance policies purchased after 1st April, 2012 only if premium is less than 10% of sum assured. Benefit for existing purchased policies to continue.
15. 1% TDS on any immovable property sale above 50 lakh (20 lakh in case of non-urban areas).
16. 1% tax at source on cash purchases of jewellery over Rs 2 lakh.
17. 80CCF deduction for infrastructure bonds not valid anymore. 
18. Income tax return filing would be now mandatory for every resident having any asset located outside India irrespective of the fact whether the resident taxpayer has taxable income or not.
19. 80G deduction not applicable in case donation is done in form of case for amount over Rs 10,000.

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Who is eligible to get relief on Income from House Property?

Always Taxpayee feel confused about income tax on house property whereas income tax laws are well defined on income from house property. Income tax on house property is well defined as any income from property which is let out on rent will be taxed under the head income from house property. The income will be deduct with any municipal tax paid, any interest re-payment on loan taken on the same property as well as standard deduction which is 30%.

In second condition if the house property is not rent out and used by him, then the value of the property will be deemed as nil while computing the annual value of property for tax purpose.

In third situation if the individual has his own property and he does not live in this house for any reason being employment or business or profession in another city, and he live in another house which is not own by him, the property which is in another city and which is not occupied by him will be deemed self occupied property and annual value will be treated as zero while computing the annual value for income tax.

Some judicial cases were also held that if an individual has his own property but doesn’t resides that property, the same will be deemed as his self occupied house and the annual value will be treated as zero. But this relief (not necessary as self occupied) is only available to individual tax payer and not to any other category of income tax payee. In income tax provision the term “his own residence” means the property should be of individual to claim this benefit. Companies and partnership firms are not living entities and cannot claim that relief as they cannot be called his own residence. The tern his own residence is for physical reside and not for fictitious entities.

One recent case was held by the honorable Gujarat High Court, the income tax assessee was HUF and not an individual. HUF made claim that relief on house property as self occupied property. The HUF firm getting income from house properties. The assessing officer denied the claim of relief on self occupied house as it is only available to an individual and not to fictitious entities.

The HUF firm applies the case to appellate level, where the case was rejected as the relief is not for HUF. The firm went to Tribunal and the Income tax Tribunal at the second level of appellate level gives the case in favor of HUF Firm and allowed to make claim of relief to HUF as well.

Income tax department read my decisions given on different cases and also analysis the cases other than income tax. One of the similar cases was of wealth tax in which exemption is only available to the individual for his residential purpose only. The department also studied the case in which the same relief was denied by the court in partnership firm. In one case the Gujarat high court ruled that HUF can reside in the house owned by it and is allowed to claim the exemption in wealth tax.

So in this case Honorable Gujarat high court ruled that HUF is the group of persons having blood relation and it is not a fictitious entity like partnership firm or company. HUF consist of natural people and only a group of natural people including men, women and children includes in it. So how can one dispute in it that only an individual and not a family can reside in a house. In India almost in every house family and not only an individual lives in the house.

HUF is the Hindu undivided family and a family consists of real persons and not artificial persons. The honorable court also ruled that his own is also called their own and owner can also be called owners for calculating the relief under income from house property.

So the court ruled that HUF can also claim the relief in income from house property if the family owns that house and resides in it. This is the big relief for the taxpayers who has ancestral property as well as to the persons who has the property in the name of HUF for the tax saving purposes.

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Save Tax and get Tax Relief u/s. 89(1) on Previous Years Arrears, How?

Friends, near about every state of India implemented 6th pay commission and thus the State Government is liable for 6th Pay arrears in Financial year 2011-12 and onwards. Due to arrears, income tax of employees in respect of financial year 2011-12 is going up and employee are receiving very less net amount after deduction of tax.

Therefore, employee unkown and unaware from taking of arrears which can be breakup in respective years and tax relief can be claimed u/s 89(1), but, most of them have no idea, how to calculate relief under section 89(1) of income tax act. We have prepared a 89(1) relief calculator for arrears received in 2011-12 and arrears related to financial year 2005-06 onwards. This calculator is under test condition so not available for download yet. For the time being you can use it online only.

Calculation Sheet

More Details Click Here

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Clarification regarding Royalty under section 9(1)(vi).

Maintenance income from computer software or other amount as royalty is deemed to accrue or arise in India by the section 9(1)(vi) of Income Tax Act in Budger-2012.

Royalty to include and always have included consideration in respect of any right, property or information whether or not.

• the possession or control of such right, property or information is with the payer;
• such right, property or information is used directly by the payer.
• the location of such right, property or information is in India.
  

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Effect of recoverable Arrears got in Salary, while submitting the Annual Income Tax Return.

There is nothing in the Income tax Act-1961 to cover the situations elaborated by you.  However, the basic guiding principle is "same Income cannot be taxed twice". You can option for the mode maintioned by you in the query subject to the condition that DDO admits the same.

Basis of charge in respect of salary income is fixed by section 15 of the Income Tax Act-1961. It is chargeable to tax either on due basis or on receipt basis, whichever matures earlier. In our opinion, levy of income tax on the salary paid to you in the FY 2010-11 was as per the provision of the I.T.Act. To compensate the income tax implication on the same, you can claim relief under section 89(1) by splitting the income year wise. The required particular  for relief u/s 89 is required to be worked out in Form No.10E. Section 89 gives relief to the salaried Assessee where the arrears of salary is received or the salary is received in Advance.

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Tax Payee and Section 80C Deductions of Incode Tax for Fin. Year 2012-13

Earlier Central Government has to view collection of Tax any way from Taxpayee and thus the Taxpayee always search how to save large tax without or with minimum savings.  Thus, in order to encourage savings, the government gives tax breaks on certain financial products under Section 80C of the Income Tax Act. Investments made under such schemes are referred to as 80C investments. Under this section, you can invest a maximum of Rs. l lakh and if you are in the highest tax bracket of 30%, you save a tax of Rs. 30,000. The various investment options under this section include :

Provident Fund & Voluntary Provident Fund :

Provident Fund is deducted directly from your salary by your employer. The deducted amount goes into a retirement account along with your employer’s contribution. While employer’s contribution is exempt from tax, your contribution (i.e., employee’s contribution) is counted towards section 80C investments. You can also contribute additional amount through voluntary contributions (VPF). The current rate of interest is 8.5% per annum and interest earned is tax-free.

Public Provident Fund :

An account can be opened with a nationalized bank or Post office. The current rate of interest is 8%, which is tax-free and the maturity period is 15 years. The minimum amount of contribution is Rs 500 and the maximum is Rs 70,000.

National Savings Certificate :

These are 6-year small-savings instrument, where the rate of interest is 8% and is compounded half-yearly. The interest accrued every year is liable to tax but the interest is also deemed to be reinvested and thus eligible for section 80C deduction.

Equity-Linked Savings Scheme :

Mutual funds offer you specially-created tax saving funds called ELSS. These schemes invest your money in equities and hence, return is not guaranteed. Money invested here is locked for a period of three years.

Life Insurance Premiums :

Any amount that you pay towards life insurance premium for yourself, your spouse or your children can be included in section 80C deduction. If you are paying premium for more than one insurance policy, all the premiums can be included. Besides this, investments in unit-linked insurance plans (ULIPs) that offer life insurance with benefits of equity investments are also eligible for deduction under Section 80C.

Home Loan Principal Repayment :

Your EMI consists of two components, namely principal and interest. The principal component of the EMI qualifies for deduction under Section 80C.

Stamp Duty and Registration Charges For Home :

The amount you pay as stamp duty when you buy a house, and the amount you pay for the registration of the documents of the house can be claimed as deduction under section 80C. However, this can be done only in the year in the year of purchase of the house.

Five-Year Bank fixed deposits :

Tax-saving fixed deposits (FDs) of scheduled banks with a tenure of five years are also entitled for section 80C deduction.

Others:

Apart from the above, things like children’s education expenses that can be claimed as deductions under Section 80C. However, you need receipts to claim the same.

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Income Tax Exemption Limit Increased from 1.80 to 3 Lakhs.

In order to provide the much needed relief to people, a Parliamentary panel scrutinising the Direct Taxes Code (DTC) Bill has suggested raising the income tax exemption limit to Rs 3 lakh and also hiking deduction on savings to Rs 2.5 lakh.

"The committee has adopted the report. It only needs to dot the i's and cross the t's. The report will be submitted within a week...possible ahead of the (Budget) Session", sources said after the meeting of the Parliamentary Standing Committee on Finance said.

The report, which will pave the way for debate and passage of the DTC Bill by Parliament, has also suggested retaining the corporate tax rate at 30 per cent.

It suggested there should be three tax slabs at 10 per cent, 20 per cent and 30 per cent for personal income tax .

The DTC, which will replace the Income Tax Act, 1961 and modernise the direct tax structure in the country, was referred to the Committee headed by senior BJP leader and former Finance Minister Yashwant Sinha for scrutiny in August 2010.

The government, pending approval of the DTC Bill by Parliament, is likely to introduce some measures concerning taxes in the forthcoming Budget itself to be presented by Finance Minister Pranab Mukherjee in the Lok Sabha on March 16.

The Budget Session of Parliament will begin on March 12 with President Pratibha Patil addressing the joint sitting of Members of the Lok Sabha and the Rajya Sabha.

As regards the income tax exemption limit, the Committee did not favour the suggestions of some members who wanted it to be raised to Rs 5 lakhs. It later reached a consensus on suggesting the limit of Rs 3 lakh, up from Rs 1.8 lakh currently.

The income tax exemption in the original DTC Bill has been proposed at Rs 2 lakh.

At present, income in the bracket of Rs 1.80 lakh -Rs 5 lakh attracts 10 per cent tax, those in Rs 5 lakh -Rs 8 lakh 20 per cent, and above Rs 8 lakh at 30 per cent.

The Committee, sources said, favours raising the limit for the total tax saving deductions, which include investment in provident fund, life insurance, children education and infrastructure bonds, to Rs 2.5 lakh from Rs 1.2 lakh.

At present, investments up to Rs 1 lakh in specified instruments are deducted while calculating the tax liability.

In addition, investments up to Rs 20,000 in infrastructure bonds are also exempted from tax.

Raising the tax exemption and savings deduction limits, sources said, was necessary to compensate people reeling under the impact of high rate of inflation.

Although the inflation has in recent months come down to 7-8 per cent, it had remained near the double-digit mark for most of 2011.

PTI New Delhi March 3, 2012

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Notification Regarding Exemptions of Statutory Body/Authority/Board/Commission, Notified Body or Authority of Competition Commission of India.

SECTION 10(46) OF THE INCOME-TAX ACT, 1961 - EXEMPTIONS - STATUTORY BODY/AUTHORITY/BOARD/COMMISSION - NOTIFIED BODY OR AUTHORITY - COMPETITION COMMISSION OF INDIA

NOTIFICATION NO. 12/2012 [F.NO.142/15/2011-SO (TPL)], DATED 28-2-2012

          In exercise of the powers conferred by clause (46) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies for the purposes of the said clause, the Competition Commission of India, a Commission established under sub-section (1) of section 7 of the Competition Act, 2002 (Act 12 of 2003), in respect of the specified income arising to the said Commission, as follows:-
(a)  amount received in the form of Government grants;
(b)  fee received under the Competition Act, 2002; and
(c)  interest income accrued on Government grants and interest accrued on fee received under the Competition Act, 2002.
2. This Notification shall be applicable for the specified income of the Competition Commission of India for the financial year 2011-12 to financial year 2015-16.
3. The Notification shall be effective where-
(i)  the activities and the nature of the specified income of the Competition Commission of India remain unchanged throughout the financial year, and
(ii)  the Competition Commission of India files return of income in accordance with clause (g) of sub-section (4C) section 139 of the Act.

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Download Return Preparation Software For Assessment Year 2011-12

                Friends, I think a few Taxpayee unable to calculate Income Tax and did not submit their annual Income Tax at Income Tax Department for Assessment year 2011-12 though they deduct the TDS by their Deductor or Employer and discuss on off submission of Tax Return because below 5 Lakh Income.  Although, the tax payee having their gross income in the Financial year 2010-11 below 500000 lakhs but they did not submit return. I suggest them to submit their Annual Income Tax Return before ending of 31st March.  It is very necessary otherwise they will face the problem of notice of Income Tax Department.

Download Income Tax Return Forms Notified by Income Tax Department For Assessment Year  2011-12

How to prepare Return?

Download Return Preparation Software   For Assessment Year 2011-12
Sl. No.	Form Name	Return Preparation Software	Remarks	System Requirements
1	ITR-1	Excel Utility(Version 1.0)	New Release	MS Excel
	(SAHAJ)	PDF Utility(Version 1.0)	New Release	Adobe Reader
2	ITR-2	Excel Utility(Version 1.0)	New Release	MS Excel
3	ITR-3	Excel Utility(Version 1.0)	New Release	MS Excel
4	ITR-4	Excel Utility(Version 1.0)	New Release	MS Excel
5	ITR-4S	Excel Utility(Version 1.0)	New Release	MS Excel
	(SUGAM)	PDF Utility(Version 1.0)	New Release	Adobe Reader
6	ITR-5	Excel Utility(Version 1.0)	New Release	MS Excel
7	ITR-6	Excel Utility(Version 1.0)	New Release	MS Excel

 

In what Forms submit Return ?

Download Income Tax Return Forms Notified by Income Tax Department For Assessment Year  2011-12
Sl. No.	Form Name	Form Description
1	AY 2011-12 Income Tax Return ITR-1 Form Notification	AY 2011-12 Income Tax Return Forms Notification under Rule 12
2	ITR-1	For Individuals having Income from Salary & Interest
	(SAHAJ)
3	ITR-2	For Individuals & HUFs not having Income Business or Professionfrom
4	ITR-3	For Individuals/HUFs being partners in firms and not carrying out business or profession under any proprietorship
5	ITR-4	For Individuals & HUFs having income from a proprietory business or profession
6	ITR-4 S	For Individuals/HUF having income from presumptive business
	(SUGAM)
7	ITR-5	For firms, AOPs,BOIs and LLP
8	ITR-6	For Companies other than companies claiming exemption under section 11
9	ITR-7	For persons including companies required to furnish return under section 139(4A) or section 139(4B) or section 13(4C)  or section 139(4D). (Not available for e-Filing)
10	Acknowledgement	Acknowledgement

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