Indian Tax Guide

Income Tax rates applicable for A.Y. 2011-12

Viviek — Sun, 21 Nov 2010 08:07:25 +0000

Tax Rates as applicable for different persons for the A.Y. 2011-12 are as under:

For resident woman (who is below 65 years of age at any time during the previous year):

Net Income range Income Tax rates Surcharge Education Cess

Upto Rs. 1,90,000 Nil Nil Nil

Rs. 1,90,000- Rs. 10% of (total income Nil 3% of Income Tax

5,00,000 minus Rs. 1,90,000)

Rs. 5,00,000- Rs Rs. 31,000 + 20% of (total

8,00,000 income minus Rs. 5,00,000) Nil 3% of Income Tax

Above Rs. 8,00,000 Rs. 91,000 + 30% of (total

income minus Rs. 8,00,000) Nil 3% of Income Tax

For resident senior citizen (who is 65 years or more of age at any time during the previous year:

Net Income range Income Tax rates Surcharge Education Cess

Upto Rs. 2,40,000 Nil Nil Nil

Rs. 2,40,000- Rs. 10% of (total income Nil 3% of Income Tax

5,00,000 minus Rs. 2,40,000)

Rs. 5,00,000- Rs Rs. 26,000 + 20% of (total

8,00,000 income minus Rs. 5,00,000) Nil 3% of Income Tax

Above Rs. 8,00,000 Rs. 86,000 + 30% of (total

income minus Rs. 8,00,000) Nil 3% of Income Tax

For any other individual, every HUF/AOP/BOI/artificial judicial person-

Net Income range Income Tax rates Surcharge Education Cess

Upto Rs. 1,60,000 Nil Nil Nil

Rs. 1,60,000- Rs. 10% of (total income Nil 3% of Income Tax

5,00,000 minus Rs. 1,60,000)

Rs. 5,00,000- Rs Rs. 34,000 + 20% of (total

8,00,000 income minus Rs. 5,00,000) Nil 3% of Income Tax

Above Rs. 8,00,000 Rs. 94,000 + 30% of (total

income minus Rs. 8,00,000) Nil 3% of Income Tax

Surcharge on individual, every HUF/AOP/BOI/artificial judicial person abolished.

Firms:-

A firm is taxable at the rate of 30% for the Assessment Year 2011-12.

Surcharge: Nil

Education Cess: 3% of Income Tax + Surcharge( if applicable).

Companies:-

A domestic company is taxable at the rate of 30% for the Assessment Year 2011-12.

Surcharge: 7.5% of Income Tax if net income exceeds Rs. 1 crore.

Nil if income does not exceed Rs. 1 Crore.

Education Cess: 3% of Income Tax + Surcharge( if applicable).

TDS as Applicable wef 1st June, 2010

Viviek — Tue, 08 Jun 2010 13:46:08 +0000

TDS(tax deducted at Source) Rate chart For Financial Year 2010-11
Made To resident		Nature of payments	Threshhold Limit	Company, Firm, Co-op Society,Local authority	HUF , Individual
Sr No.	Section	Nature of payments	Threshhold Limit	TDS Rates
1	194A	Interest from a Banking company	10000	10%	10%
1	194A	Interest other than from a Banking company	5000	10%	10%
2	194B	Winning from Lotteries	10000	30%	30%
3	194 BB	Winning from Horse Race	5000	30%	30%
4	194 C	Payment to Contractors,Pay to Advt /Sub- Contractor, Payment to Transportor	30000 (75000 in a year)	2%	1%
5	194 D	Insurance Commission	20000	10%	10%
6	194 H	Commission/Brokerage	5000	10%	10%
7	194 I	Rent-property	180000	10%	10%
7	194I	Rent-Plant / Machinery	180000	2%	2%
8	194J	Professional Fees	30000	10%	10%
Note -1		For Section 194C Rs. 20000/30000 for single payment & Rs. 50000/75000 for aggregate Payment during a financial year.
Note -2		Payment Made to Transportor ,Tds is Not required If pan is provided By the Transportor.
Note-3		Surcharge and Cess Is not applicable on tds from 01.04.2009 on any payment made to resident.
Note-4		If pan not provided by the deductee then rate as per above table or 20% which ever is higher is to be charged.(effective from 01.04.2010 section 206AA)

Message regarding alterations on Cheque leaf

Viviek — Tue, 08 Jun 2010 13:43:36 +0000

All banks have received RBI guidelines by virtue of which Banks are supposed to prohibit alterations / corrections on the cheque leaf.

As per RBI Circular – DPSS.CO.CHD.No. 1832/01.07.05/2009-10 dated 22nd February 2010.

Prohibiting alterations / corrections on cheques :

No changes / corrections should be carried out on the cheques (other than for date validation purposes, if required). For any change in the payee’s name, courtesy amount (amount in figures) or legal amount (amount in words), etc., fresh cheque forms should be used by customers. This would help banks to identify and control fraudulent alterations.

Basis the above guidelines branch / clearing teams can return cheques which have any alteration in the

Payee Name
Amount in numbers
Amount in words

The only alteration which is allowed is the alteration in the date.

Bank branches will start returning the cheques for cash payments across the counter and Fund Transfer and clearing cheques effective 1st July 2010.

Extension of time limit for filing ITR-V to CPC Bangalore

Viviek — Mon, 08 Feb 2010 13:23:45 +0000

Good news for the assesses filing their Income Tax Return electronically (without digital signature) on or after 1^st April 2009. Central Board of Direct Taxes has extended the time limit for filing ITR-V to Centralised Processing Cell from 60 days to 120 days from the date of uploading of the electronic return data or till 31^st March 2010 which ever is later. This extension is applicable for all the assesses who have e-filed their income tax return after 1^st April 2009. So as per this circular if an assessee has e-filed his income tax return without digital signature on any date after 1^st April 2009 but the copy of ITR-V was not filed to Bangalore office- CPC by any reason then that assessee can again send the copy of ITR-V to CPC- Bangalore before 31^st March 2010 or 120 days from the date of filing return electronically which ever is earlier.

However, in cases where email acknowledgement for ITR-V form is not received by the taxpayer from the CPC Bangalore the taxpayer may send another duly signed ITR-V form by speed post to Centralized Processing Centre, Electronic City Post Office, Bengalore, Karnataka – 560100. This means that if in case your ITR-V is not received by the Bangalore office by ordinary post then an assessee can send another copy of ITR-V by speed post.

The relaxation has been made following requests from taxpayers that, as a one-time measure, the time limit for filing of ITR-V form may be extended to 31st March 2010 and that alternative modes of submission of ITR-V form may also be provided in cases where an ITR-V form has not been received at CPC, Bangalore by ordinary post.

Adjustment of advance tax in respect of fringe benefits for assessment year 2010-11 against advance tax

Viviek — Mon, 08 Feb 2010 12:40:13 +0000

The Finance (No. 2) Act, 2009 was produced and passed by the houses of Parliament in mid of the year 2009-10. In the Finance Bill a new section Section 115WM was inserted in the Income Tax Act, 1961 to abolish the FBT with effect from Assessment Year (A.Y.) 2010-11. Till that date many of the assessee had paid advance tax in respect of value of fringe benefits provided by employer to its employees. Hence, CBDT vide its Circular No. 2/2010, dated 29-1-2010 has decided that any assessee who has paid advance tax in respect of fringe benefits for A.Y. 2010-11 shall be treated as Advance Tax paid by assessee concerned for A.Y. 2010-11. The assessee can adjust such sum against its advance tax obligation in respect of income for A.Y. 2010-11 or in case of loss to claim such payment as refund as advance tax paid in A.Y. 2010-11.

Direct Tax Code

Viviek — Fri, 11 Dec 2009 07:23:45 +0000

The new draft Direct Tax Code that came under fire from all quarters looks all set to be completely overhauled. Items in the new code such as asset-based minimum alternate tax and exempt-exempt-tax regime for individual retirement savings did not go down well with the CBDT and its field formations, which have sent out a comprehensive report countering the proposals in the code. With a rewriting exercise underway, implementation of the new tax law from April 1, 2011 looks difficult. – THE ECONOMIC TIMES, NEW DELHI, DECEMBER 10, 2009

Changes in TDS Rules & Procedure

Viviek — Thu, 08 Oct 2009 06:16:36 +0000

Applicable for payments made on or after 01-10-2009.

By the Finance Act 2009 TDS rates are revised for some types of Payments. The new rates are applicable on and after payments made from 01-10-2009. The revised rates are as under:

Section 194C Contract Payments:

New Rates Earlier Rates

Contracts with Individual/HUF 1% 2%

Contracts with Others 2% 2%

Here contracts includes Sub Contracts & Advertisement Contracts.

If any transporter provides PAN , the TDS on Contract payment is NIL.
In case PAN is not furnished TDS is to be deducted at the above rates only.

Section 194I Rental Payments:

New Rates Earlier Rates

Rent of Plant & Machinery 2% 10%

Rent of Land or Building or 10% 15%

Furniture & Fittings to Ind./HUF

Rent of Land or Building or 10% 20%

Furniture & Fittings to Others

Points to Remember:

No Surcharge & Cess is applicable for TDS. (Applicable From 01-04-2009)
Cess is applicable on Salary Payments as before.
Quarterly Returns is not required to be filed from 3^rd Quarter of F.Y. 2009-10 but new scheme of periodicity not prescribed as yet.
New Rate of TDS @ 20% in case on non availability of PAN is applicable only from F.Y. 2010-11.

Penalties under the Income Tax Act

Viviek — Wed, 24 Jun 2009 12:53:04 +0000

There are different penalties leviable under the Indian Income Tax Act for defaults under the various provisions of the act committed by an assessee. There are many provisions under which the penalties are leviable under the act. There are some penalties that are mandatory in nature while in most of the cases penalty is leviable at the discretion of the Assessing Officer (AO). The major penalties that are imposed under the act along with their nature of defaults are given as under:

1. Default: Concealment of Income or furnishing inaccurate particulars of income.

Minimum Penalty: 100% of tax sought to be evaded.

Maximum Penalty: 300% of tax sought to be evaded.

2. Default: Failure to keep or maintain books as required u/s 44AA.

Minimum Penalty: Rs. 25,000/-

3. Default: Failure to get accounts audited or furnish report u/s 44AB.

Minimum Penalty: ½% of the total sales, turnover or gross receipts.

Maximum Penalty: Rs. 100,000/-

4. Default: Taking/Repaying or accepting any loan or deposit in contravention of the provisions of section 269SS /269T (Loan taken or repaid above Rs. 20,000 in cash).

Minimum Penalty: Amount of loan/deposit so taken or accepted or repaid.

5. Default: Failure to furnish Return of Income.

Minimum Penalty: Rs. 5000/-

How to pay taxes online?

Viviek — Mon, 11 May 2009 13:56:06 +0000

E-payment of taxes (Income Tax and TDS) is mandatory for the following types of assesses:

All Companies and firms
All persons other than companies or firm who are liable to get their accounts audited u/s 44AB of the Income Tax Act.

Income tax can be paid easily from your workplace or from any place online by taking the following steps:

Open the website www.tin-nsdl.com and select “Pay taxes online” .

Click on the following link: https://onlineservices.tin.nsdl.com/etaxnew/Index.html

Select the relevant challan from the NSDL site and enter your PAN/TAN as applicable.
Enter the challan details, and select your relevant bank and “Submit”.
Select whether you are a Retail Internet Banking user or Corporate Internet Banking user.
Log in to your Bank Internet Banking portal with your user ID and password.
Enter the details of the tax amount and authorize the payment.
Download the acknowledgement of your tax payment.

For more information on e-payment of taxes click on the following link:

http://www.incometaxindia.gov.in/ePayment.asp?abc=1

Agricultural Income

Viviek — Fri, 08 May 2009 13:26:51 +0000

Agriculture income is exempt under the Indian Income Tax Act. This means that income earned from agricultural operations is not taxed. The reason for exemption of agriculture income from Central Taxation is that the Constitution gives exclusive power to make laws with respect to taxes on agricultural income to the State Legislature. However while computing tax on non-agricultural income agricultural income is also taken into consideration.

What does the term Agricultural Income mean?

As per Income Tax Act income earned from any of the under given three sources meant Agricultural Income;

(i) Any rent received from land which is used for agricultural purpose.

(ii) Any income derived from such land by agricultural operations including processing of agricultural produce, raised or received as rent in kind so as to render it fit for the market, or sale of such produce.

(iii) Income attributable to a farm house subject to the condition that building is situated on or in the immediate vicinity of the land and is used as a dwelling house, store house etc.

Now income earned from carrying nursery operations is also considered as agricultural income and hence exempt from income tax.

In order to consider an income as agricultural income certain points have to be kept in mind:

(i) There must me a land.

(ii) The land is being used for agricultural operations.

(iii) Agricultural operation means that efforts have been induced for the crop to sprout out of the land .

(iv) If any rent is being received from the land then in order to assess that rental income as agricultural income there must be agricultural activities on the land.

(v) In order to assess income of farm house as agricultural income the farm house building must be situated on the land itself only and is used as a store house/dwelling house.

Certain income which is treated as Agriculture Income;

(a) Income from sale of replanted trees.

(b) Rent received for agricultural land.

(d) Share of profit of a partner from a firm engaged in agricultural operations.

(e) Interest on capital received by a partner from a firm engaged in agricultural operations.

(f) Income derived from sale of seeds.

Certain income which is not treated as Agricultural Income;

(a) Income from poultery farming.

(b) Income from bee hiving.

(d) Income from dairy farming.

(e) Purchase of standing crop.

(f) Dividend paid by a company out of its agriculture income.

(g) Income of salt produced by flooding the land with sea water.

(h) Royalty income from mines.

(i) Income from butter and cheese making.

(j) Receipts from TV serial shooting in farm house is not agriculture income.

Certain points to be remembered;

(a) Agricultural income is considered for rate purpose while computing tax of Individual/HUF/AOP/BOI/Artificial Judicial Person.

(b) Losses from agricultural operations could be carried forward and set off with agricultural income of next eight assessment years.