Tax slabs liberalized :-The most significant and far reaching change proposed is the amendment in the income tax slabs. This move is a definite step towards taking the tax slabs to the proposed Direct taxes code (DTC) to be implemented in next year.
The change in tax slabs would result in savings to every person earning a taxable income of Rs 300,000 or more. The tax savings can go up to Rs 51,500 if your income is Rs 800,000 or more just on account of change in the tax slabs.

Deduction for investment in long-term infrastructural bonds : As a step to promote investment in infrastructure sector, Budget 2010 proposes to introduce a new provision which seeks to provide an additional deduction of Rs 20,000 for investment in long term infrastructural bonds to be specified by the government.

The deduction available under this section shall be over and above the existing limit of Rs 1,00,000 for specified investments/ expenditures under section 80C of the Income-tax Act, 1961 (the Act).

Deduction for Contribution to Central Government Health Scheme :-The Central Government Health Scheme (CGHS) is a medical facility available to serving the retired government employees. The CGHS facility is similar to the hospitalization and other healthcare facilities covered under insurance policies issued by health insurance companies.

As per the provisions of the Act, an individual can claim deduction for payment of health insurance premium of Rs 15,000 if the insurance is for himself, spouse and dependant children. The individual will get an additional deduction of Rs 15,000 if the contribution is made for his parents. The deduction in case of a senior citizen is Rs 20,000.

The government has now sought to extend the benefit of deduction to contributions made under the CGHS and is welcome change for the retired government employees. This deduction shall be covered within the overall limit of existing deductions under the Act which was not there earlier.

Relief to professionals and small businesses :- Giving relief to small businesses and professionals, Budget 2010 proposes to raise the statutory limit for applicability of Tax Audit under the Act. The existing gross receipts / turnover limit for getting accounts audited is proposed to be raised from Rs 40 lakh to Rs 60 lakh in case of persons carrying on business and from Rs 10 lakh to Rs 15 lakh in the case of profession.

Similarly, penalty for non compliance with tax audit related provisions is proposed to be raised from Rs 1 lakh to Rs 1.5 lakh.

The raising of the tax audit limit is a welcome step as it reduces the hassles for individuals in getting their accounts audited.

Relaxation of TDS limits :- Budget 2010 proposes to give some relief to small contractors, professionals, commission agents and even to individuals having rental income by raising the threshold limits liable for TDS.

This will help individuals to deduct taxes only if the amount now exceeds the proposed higher limit thereby reducing some hassles.

Administrative reforms:- The Finance Minister reiterated the government’s commitment to ensure sound tax administrations and simplify the tax compliance procedure for taxpayers. Some of the measures announced in this Budget are:

Introduction of Saral–II Form: The Income tax department shall notify SARAL-II form for individual salaried taxpayers. This will ease the tax return preparation process for salaried taxpayers.

New centers for processing of tax returns: The Government will set up two more centers during the year in line with the Central Processing Centre (CPC) at Bengaluru which is currently processing 20,000 tax returns daily. This will help all of us.

Document Identification Number: It is proposed that an income-tax authority will be required to allot a computer generated Document Identification Number at the time of every correspondence to any other income-tax authority or the tax payer. It also provides that every correspondence received by an income-tax authority, shall be accepted only after allotting and quoting this computer generated Document Identification Number.

Single Clearance Window for all applications and registrations: It is proposed to extend the scheme of single window clearance system for registration of all applications including those for redresses of grievances as well as paper returns which is currently being run by the department at Pune, Kochi and Chandigarh to four more cities during the year.

More Under Income Tax

Leave a Comment

Your email address will not be published. Required fields are marked *

Search Posts by Date

March 2021
M T W T F S S
1234567
891011121314
15161718192021
22232425262728
293031