What’s in for Salaried Class in the Union Budget 2009-10 ?

It’s marginal and it’s not exactly what the salaried class wanted keeping in mind the raise in their annual income thanks to 6CPC implementation.

These are certain key features of budget 2009-10 relating to Personal Income Tax

The Union Govt has marginally increased personal income tax exemption limit by Rs 15,000 from Rs 2.25 lakh to Rs 2.40 lakh for senior citizens.

Similarly it has aslo raised the exemption limit by Rs 10,000 from Rs 1.80 lakh to Rs 1.90 lakh for women tax payers and by Rs 10,000 from Rs 1.50 lakh to Rs 1.60 lakh for all other categories of individual taxpayers.

Further, it has also increased the deduction under section 80-DD in respect of maintenance, including medical treatment, of a dependent who is a person with severe disability to Rs 1 lakh from the present limit of Rs 75,000.

The budget has phased out the surcharge on various direct taxes by eliminating the surcharge of 10 per cent on personal income tax.

There is no change in corporate taxation.

The budget has aslo abolished the Fringe Benefit Tax that was introduced in the Finance Act, 2005 on the value of certain fringe benefits provided by employers to their employees.

Source: Gconnect

Unique Transaction Number (UTN) not mandatory for filing income-tax returns

The Central Board of Direct Taxes has deferred the implementation of furnishing of the unique transaction number (UTN) for filing income-tax returns.

Accordingly, taxpayers filing their returns for the assessment year (AY) 2009-10 or any other earlier assessment years can do so without mentioning the UTN, as required under a notification (No 31 of 2009) issued in March, a CBDT release said.

The CBDT had earlier stipulated that income-tax assessees should furnish the UTN when they file their income-tax returns from this year (AY 2009-10), if they have to make claims for TDS (tax deducted at source) credit.

It was also specified that National Securities Depository Ltd would provide the UTN number for every TDS transaction in 2007-08 and 2008-09.

How UTN helps

The UTN was proposed to facilitate the verification of pre-paid taxes such as TDS with the data available in the NSDL system. The verification is important as no document is required to be filed with the return of income.

An official release issued today said that all deductors/collectors of tax deducted at source/tax collected at source (TDS/TCS) may continue to deposit their TDS/TCS and file their quarterly TDS/TCS returns according to the procedure existing prior to issuance of notification No 31.

The date from which notification No 31 will become applicable on TDS or TCS and deposited during the current financial year will be notified by CBDT subsequently, the release added.

Source: BusinessLine, Wednesday, Jul 01, 2009

Online Tool to generate ITR-1 return

Having got your income tax calculated for this year (2008-09) through GConnect online Income Tax calculation application, now it’s time to file those details in the form of ITR-1 or ITR-2 with Income Tax department.  The last date of filing these returns is 31st July 2009.  GConnect has again made this procedure a simple one by its new online application for generating ITR-1.

While other websites charge for generating ITR returns, it’s absolutely free in GConnect.  Just enter your personal data alongwith your consolidated income and deductions details furnished to you by your employer in the form of Form-16 for this year.  That’s it!  You are ready to generate ITR-1 which can be printed at ease.  The output is in accordance with the format for ITR-1 prescribed by Income Tax Department.

Salaried class are required to file either ITR-1 or ITR-2 depending upon the receipt of income other than salary such as income from house property, captial gains etc. Normally, if you don’t have any income other than salary you can straight away file ITR-1.  We are in the process of finalising the online application for generating ITR-2 also.  The same will be released soon.  Those who have other income such as income from house property, captial gains etc can use it to generate ITR-2

Check this link to generate ITR-1

Source: Gconnect

Standard deduction for salaried employees may return

Ahead of the annual budget, here’s some cheer for salaried employees and pensioners. The finance ministry is considering bringing back standard deduction of up to Rs 20,000 in individual taxable incomes.
According to revenue department officials, the government may be willing to take a small hit in return for a spike in spending that it hopes will result from a bigger disposable income with the salaried classes.
Till the budget for 2005-06, a standard deduction of Rs 30,000 or 40 per cent of income, whichever was lower, was allowed to salaried employees with an annual income between Rs 75,000 and Rs 5 lakh. For those earning more, the standard deduction was fixed at Rs 20,000.
The standard deduction was meant to compensate salaried people for the fact that self-employed small business persons or entrepreneurs paid tax only on their net income after deducting business expenditure.
Industry has been demanding the re-introduction of standard deduction so that individual taxpayers are able to spend more and stimulate domestic demand. As Indira Gandhi’s finance minister, Pranab Mukherjee had in fact, raised it from Rs 5,000 to Rs 6,000 in the budget for 1983-84.
“There are two ways of looking at reducing personal tax. One option before the government is to do away with surcharges. The other option would be to give relief to individual earnings up to a particular level. In other words, keeping in mind fiscal deficit constraints, the benefit could be extended to only lower income earners.
This would help reduce administrative burden of the department and focus on the big fish,” said Sudhir Kapadia, Partner, Taxation, Ernst & Young. P Chidambaram had as finance minister removed the standard deduction after overhauling tax slabs and raising the exemption limit to Rs 1 lakh. He had introduced three slabs of 10 per cent, 20 per cent and 30 per cent for individuals in the Rs 1 lakh to Rs 1.5 lakh income bracket, Rs 1.5 lakh to Rs 2.5 lakh and over Rs 2.5 lakh respectively.

Source: Staff Corner.com