Budget 2011- Income Tax Perspective

Section /Schedule

Head

Amendment/New Provision

Effective date

Part III to Schedule I

Advance taxes & TDS u/s 192

Advance taxes for the FY 2011-12 and TDS u/s 192 from salary shall be made at the following rates:

In case of Individuals, HUF, AOP/BOI & Artificial juridical person:

# In case of individual being woman resident in India and below the age of 60 years at any time during the PY, the basis exemption limit is Rs. 190,000.

#In case of individual, being resident in India, who is age of 60 years [Senior Citizen Age Criteria Reduced from 65 Years to 60 Years] or more  but less than 80 Years at any time during the PY, the basic exemption limit is Rs. 2,50,000.

@ In case of individual, being resident in India, who is age of 80 years or more at any time during the PY, the basic exemption limit is Rs. 5,00,000.

• In case of Partnership firms [Including LLP], the rate of tax shall be 30%. Surcharge shall be NIL.
• In case of companies, the rate of taxes shall be same as specified in the Finance Act 2010. Further, Surcharge has been reduced to 5% in case of domestic companies [and reduced to 2% in case of non domestic companies continues], if total income of the company exceeds Rs. One crore.

Education cess and SHEC shall be continued to be levied in all cases.

1-4-2011

2(15)

Definition of Charitable purpose

The term ‘Charitable Purpose” has been amended as follows:

“advancement of any other object of general public utility” included in definition is not a charitable purpose if the activity involves carrying of trade, commerce or business or rendering any service in relation thereto for consideration irrespective of nature of use or application, or retention of income from such activity.

However, if total receipts from aforesaid activity do not exceed Rs. 25 Lakhs [Earlier Rs. 10 Lakhs] in the PY, the said activity shall continue to be charitable in nature.

1-4-2011

10(45)

Exemption from Perquisities

Notified Special Allowances and Perquisites received by Serving or retired chairman and members of the Union Public Service Commission

Retrospective

1-4-07

10(47), 115A and 194LB

Exemption of Infra Debt Fund

Income of Notified Infrastructure Debt Funds shall be Exempt from tax subject to following Conditions:

# It shall file its Return of Income.

# Interest received by Non Resident shall be taxed u/s 115A @ 5% of Gross Amount

#TDS shall be made u/s 194LB @ 5% on interest paid to non resident.

1-6-2011

35(2AA)

Contribution to approved institutions for scientific research

Deduction eligibility has been increased from 175% to 200%

1-4-2011

35AD

Investment linked deduction

100% deduction shall be allowed in respect of any capital expenditure [other than on land, goodwill or financial instrument] incurred for the purposes of specified business:

The list of specified business has been extended to include :

1. Production of Fertilizer in India
2. Developing and Building Affordable Housing Project under notified schemes.

Loss from business of Hotels & hospitals specified u/s 35AD shall be allowed to be set off u/s 73A against profit of another specified business whether or not claiming deduction u/s 35AD.

1-4-2011

36

Deduction  of Contribution to NPS

Contribution not exceeding 10% of salary of employee made to NPS by Employer on account of Employee allowed as deduction

1-4-2011

80CCE

Deduction above Rs. 1 Lakh

Contribution made by Central Government or Employer to pension scheme specified u/s 80CCD shall be excluded from the limit of Rs. 1,00,000/- specified for 80C, 80CCC and 80CCD

1-4-2011

80CCF

Deduction in respect of investment in LT Infra Bonds

Deduction is allowed to Individual & HUF only in respect of investment in notified long term infrastructure bonds to the extent of Rs. 20,000/-. This deduction is over and above the limit of Rs. 1,00,000/- specified u/s 80CCE.

Deduction Extended for further period of One Year.

1-4-2011

80IA(4)

Deduction for Power Generating Units

Terminal date for setting up of generation or distribution of power or transmission or distribution thereof or undertaking substantial renovation or modernization of existing network has been extended to 31.3.2012

1-4-2011

115BBD

Rate of Tax for Dividend

Dividend received by Indian Company from its Foreign Subsdiary Company shall be taxable @ 15% of Gross Amount without allowing any deduction in respect thereof

1-4-2011

115JB

MAT

-         Rate of MAT is increase to 18.5% of Book Profits.

MAT to be made applicable to developer of SEZ and Units in SEZs  in the Income Tax Act as well as SEZ Act

1-4-2011

115O

Dividend Distribution Tax

Exemption from DDT to SEZ Developers and Units in SEZ has been removed

1-6-2011

115R(2)

Tax on Distribution by MF

Mutual Fund shall be liable to pay additional income tax @ 30% on distributed income [from Money Market Mutual Funs or Liquid Fund or any debt fund] , if recipient is any person other than individual or HUF.

1-6-2011

139(1C)

Filing of Return of Income

Salaried persons not having any other source of income and whose tax liability has been discharged by way of TDS u/s 192, are not required to file their return of income.

1-6-2011

XII BA

AMT

-         Alternate Minimum Tax [AMT] @ 18.5% to be levied on Adjusted Total Income of LLP.

-         Adjusted Total Income shall be Total Income of the LLP before giving effect to provisions of Chapter XII BA and Deduction u/c VI-A - deduction relating to incomes and deduction u/s 10AA.

-         Tax credit shall be allowed in respect of AMT Paid for a period of 10 Years.

1-4-2011