Recent Amendments in Finance Bill 2009

On sixth of July our Honorable Finance Minister presented his Union Budget for the year 2009-10. On the direct tax part many of the amendments were made among which some of the important amendments proposed are as under :

 1.   The basic exemption slab for charging income tax is raised by Rs. 10000/-. Now income of Rs. 160,000 (individual and HUF) is not chargeable to tax. For resident women and senior citizens also the amount has been increased by Rs. 10000/-.

2. The term firm includes Limited Liability Partnership and the term partner shall include the partner of Limited Liability Partnership.

3. Section 40 of the Income Tax Act is amended with effect from 1-4-2010 which has increased the allowable remuneration payable to a partner of the firm. The revised allowable remuneration is as under:

“(a) on the first Rs.3,00,000 of the   book-profit or in case of a loss    

        Rs.1,50,000 or at the rate of 90 per cent of the book-profit, whichever is more;

 (b) on the balance of the book-profit  at the rate of 60 per cent.”.

4.   As per the new amendment now if a businessman have turnover of less then Rs. 40 lakhs then he is exempt to maintains books provided he declares his income @ 8% of gross receipts of his business .

 5. As per the new amendment if a person purchases an immovable property without consideration or for a consideration being less than the stamp value of the property then the difference amount of consideration and stamp value is taxable in the hands of the buyer of the property.

6. Rate of MAT is raised to 15%.

7. Fringe Benefit Tax is abolished with immediate effect.

8. Rate of TDS to be deducted of individual and HUF is revised to 1% in case of contract payments u/s 194C of the act.

9. No deduction shall be made from any sum credited or paid or likely to be credited or paid during the previous year to the account of a contractor during the course of business of plying, hiring or leasing goods carriages, on furnishing of his Permanent Account Number, to the person paying or crediting such sum.

10. Section 194I amended relating to TDS on rent on plant or machinery or equipment, land & building.

11. If any person who is liable to furnish his PAN to his deductor and he fails to do so then as per latest amendment his TDS will be deducted @ 20%  or at the applicable rates whichever is higher.

12. Invalid furnishing of PAN will be treated as if no PAN is received.

13. As per latest amendment now receipt of notice by income tax department by electronic mode shall also be a valid notice. This means that now income tax department can send notice on e-mail also.

14. Every notice of Income Tax department shall contain a computer generated number failing which the notice will be deemed void.

15. Limit for Advance Tax raised to Rs. 10,000.

16. Basic exemption limit for Wealth Tax enhanced to Rs. 30 Lacs.

 

These are among some of the amendments proposed to be made by the Finance Bill 2009. These are subjected to change till the Finance bill receives the assent of Honorable President of India.