Is Common man benefited by Union Budget 2009-10? Meager Effect on tax:
The Union Budget 2009 is an anti middle man Budget. Salary income earners upto Rs.10 Lakhs will have a maximum benefit of Rs.1,030 whereas the higher income group earners having income of above Rs.10 Lakhs will be benefited by an minimum amount of Rs.21,012 (because of removal of Surcharge) and maximum by few lakhs rupees.
Fringe Benefit Tax: The following are taxed as perquisites in the hands of employee – (a) Shares allotted under ESOP Scheme, (b) Contribution in excess of Rs.One Lakh on Super Annuation fund and (c) any other Fringe benefit notified by the government like the Car, Credit Card, Free Club Membership, Gift, Free Accommodation, Free Transportation, Free Lunch will be taxed in the hands of employee similar to what was prevailing upto Financial Year 2004–05. It seems like the Budget is Corporate Friendly and Enemy to Salaried Class!!! More tax burden for VRS Employee: Effect on Small Business Men: Retail trader – Present Declare Income – [Rs.40 Lakhs × 5%] – Rs.2.00 Lakhs Tax Effect: Rs.5,150 Retail trader – Proposed Law Declare Income – [Rs.40 Lakhs × 8%] – Rs.3.20 Lakhs Tax Effect: Rs.20,600 The Basic exemption limit for individual increased by Rs.10,000 but presumptive income increased by Rs.1.20 lakhs. Hence, there is no real tax benefit for small business men. The above persons are not liable for Advance Tax. It is not a great benefit because individual will declare an income at the rate of 8% that is maximum of Rs.3,20,000 and claim 80C deduction of Rs.1,00,000, the balance net income of Rs, 2,20,000 the tax liability works out to Rs.6,180 (approx).From the above these small business men are not required to pay the advance tax as the limit for advance tax payment enhanced to Rs.10,000 from the present Rs.5,000. (A) Small Vehicle Owners Affected – Small Vehicle Owner – Present Declare a Maximum Income of [Rs.3,500 pm × 10 Vehicles × 12 months] – Tax Effect: Rs. 40,170/– Small Vehicle Owner – Proposed Law Declare a Maximum Income of [Rs.5,000 pm × 10 Vehicles × 12 months] – Tax Effect: Rs 86,520/– Thus, for every lorry you are owning you have to declare Rs.18,000 income more p.a. (B) Effect on Other Goods Vehicle Owner: Other Vehicle Owner – Present Declare a Maximum Income of [Rs.3,150 pm × 10 Vehicles × 12 months] – Tax Effect: R. 31,520/– Other Vehicle Owner – Proposed Law Declare a Maximum Income of [Rs.4,500 pm × 10 Vehicles × 12 months] – Tax Effect: R. 67,980/– Thus, for every other goods vehicle you are owning you have to declare Rs.16,200 income more p.a. Stop Gifting…!! Is this the rule of Union Budget, 2009 Under the present law, the Fortunately, the above gifts from relative or on marriage or by will or inheritance or contemplation of death or from local authority or educational or medical institution u/s 10(23C) is not taxable. Benefit for the Dependant and not for YOU!!!! Previously a deduction of Rs.75,000 was given in respect of taking care of any of your Dependant relative suffering from severe disability the same was increased to Rs.1,00,000. But if the person himself is suffering, you are eligible only for the deduction of Rs.75,000 (No increase). One Bright Star in the dark sky!! – So, what is the moral of the Story? TDS Rate reduced – individual contractors. (b) Hiring / Renting of Plant and Machinery TDS Rate reduced from 10% to 2%. (c) Letting out immovable properties, including furniture and fittings, TDS is reduced from 15% to 10% and in respect of Corporates and Firms the same is reduced from 20% to 10%. Do get your PAN quickly if don’t have one – Wealth Tax Limit:
Individual gains nothing beyond Rs.1,030 p.a, that is on an average Rs.3.00 per day in a year.
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