Budget and Income Tax
The Union Budget 2010 is definitely inflationary for Aam aadmi. Middle class shall become poor class! There is no respite from continuing inflation and the budget provisions are adding fuel to the fire of inflation. India too shall be in the list of most expensive countries in the world. It may break all the records and may be on the top of such list!
Income tax provisions:
There is no change in basic exemption limit in Income Tax for individuals including women and senior citizens; but tax slabs are changed to 10% for an income in between above Rs.160000 to Rs. 500000 ; 20@ above Rs.500000 to Rs.800000 and 30% for above 800000.There shall be some relief in total tax as earlier rates are same except 20% for above 300000 to Rs.500000 and 30% for above Rs.500000. Whatever there is relief in income tax that shall be offset by an increase in other essential items –mainly petrol / diesel prices.
There shall be deduction of an additional amount of Rs. 20,000 allowed, over and above the existing limit of Rs.1 lakh on tax savings, for investment in long-term infrastructure bonds as notified by the Central Government. It would be better if maximum ceiling is raised to Rs. 120000 and let the assesses decide in which funds or where an amount be invested within specified investments.
The current surcharge of 10 per cent on domestic companies is reduced to 7.5 per cent. Also the rate of Minimum Alternate Tax (MAT) increased from the current rate of 15 per cent to 18 per cent of book profits. For simplification surcharge and MAT should be abolished in toto.To compensate the revenue on account on these accounts, raise 1 or 2 per cent rate of tax!
The Limit of turnover for the purpose of presumptive taxation of small businesses
enhanced to Rs. 60 lakh. It should be further raised to Rs, 1 Crore.
The income tax department to notify SARAL-II form for individual salaried
taxpayers for the coming assessment year. It should be assesses friendly –salaried individuals must be able to fill themselves without any help from anyone!
Also such Saral forms are the need of the hour for individuals having small business or profession –i.e., who are outside the ambit of tax audit!
Tax Deduction at Source (TDS):
TDS limit for interest on bank deposit remains at Rs.10, 000, it must be raised to Rs. 20,000 and for Professional incomes it is proposed to enhance from Rs.20000 to Rs.30, 000 –it should be further enhanced to Rs.50, 000.
Senior Citizens are ignored:
No TDS should be deducted from any income for Senior Citizens. At present they are required to fill a Form in Duplicate for their TDS non deduction. It increases paper work and barring a low percentage of Senior citizens, their incomes are below taxable limits. Let them pay Advance tax for their income if it is more than taxable limits.
Even the age limit is maintained at 65 years for Senior citizens. In the present budget only it should be lowered to 60 years as per National Policy of Senior Citizens.
Further ordinary income tax assesses wish some Administrative Reforms too like Issuance of Refunds and completion their assessment in time limit and receiving Assessment Orders in time without a visit to the Income Tax Office (ITO) .As old as cases for Assessment Years 2006-07 there are a good number of such cases pending with the Income Tax Department. On its own the Department should find such cases and issue pending refunds and complete all such assessments and send assessment orders to all such assesses. Also Reduce Scrutiny time for issuance and completion of assessments. I hope this is not a dream!
Ex –Member: AMIMA, AMIBM, ACEA (