30 December 2009
Respected Sir, Kindly give me the comprehensive details/guideline of this direct tax code which is being implementd by our goverment from 01-04-2010.
30 December 2009
under Direct TAx Code, residence based taxation is applied for residents and source based taxation is applied for nonn residents. computation of income from business will be based on income expense model i.e. (Gross Income-Allowable deductions). in sec 115JB i.e. MAT, a shift has been made from book profits to value of gross assets.rate of MAT is 2% of value of gross assets.under new code, MAt will be final tax and will not be allowed to be carried forward for claiming tax credit. Wealth tax will be chargeable at 0.25% when net wealth is in excess of 50crores.
30 December 2009
Major Amendments in Direct Tax Code Chances may effect from 01.04.2010 as per government Rules Basic Concepts of Income Tax- (1) Good news for short term memory assessee now there is no difference in previous year and assessment year as per new direct tax code. We talk about only financial year. 2) Now income sources define as Income from employment House property Business Residuary sources Capital gain :- Income from Salary- Now the new name of this source is “Income from employment “ but the bad news for salaried employee that every allowance & perquisites added in salary for tax purpose no tax benefit regarding any allowances and perquisites. Income from House property-Now direct code is generate more tensions for assessee who have earn income from house property and taking housing loans for constructions of house. Benefit of interest from self occupied property has withdrawn in Direct Tax Code. House property income calculate on the basis of actual rent or 6% of the Rateable value**.A bad news for all assessee that standard deduction reduced from 30% to 20% . **Rateable value decided by the municipal authorities or 6% of the acquisition cost minus deductions including unlimited interest payouts. Business & Profession- There is not major changes in this head but new name is business only Capital gain- In this head difference between short term and long term have no more in direct tax code. Indexation benefit applied after the holding of assets more than one year in this direct tax code. Separate Rate of capital gain changed and taxes charge as per normal income tax slab. This is good news for lower and higher assessee. Other sources- Now this source is renamed as “Income from residuary sourcesâ€. Deductions- 80C- This is deadly news for middle class assessee that limit will increase from 1 lakh to 3 lakh and graduation, post graduation studies now include in higher education for the purpose of deductions. Exempt-Exempt-Tax (EET)- New tax regime for all provident funds, superannuation funds, life insurance and new pension scheme. These investments to be taxed on withdrawal. Assessment Changes- 0-10 Lac 10% 10 Lac -25 Lac 20% Above 25 Lac 30% Wealth Tax-Now wealth tax is only for higher assesses because exemption limit increased upto rs. 50 crore and rate of wealth tax reduce from 1% to 0.25%.
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