Individual Tax

Changes in rates of income tax as a consequence to enactment of Finance Bill 2010

(Note : All the changes discussed below are applicable from 1st April 2010 unless specified otherwise)

1) Change in income slab for individuals:

For individual other than Woman & Senior Citizen *

Basic Tax Basic Tax

Old Income Slab Rate New Income Slab Rate
Upto Rs. 160,000 Nil Upto Rs. 160,000 Nil
Rs. 160,001 to Rs.300,000 10% Rs. 160,001 to Rs.500,000 10%
Rs. 300,001 to Rs.500,000 20% Rs. 500,001 to Rs.800,000 20%
Above Rs. 500,000 30% Above Rs. 800,000 30%

For resident Woman assessee not being a Senior Citizen *

Basic Tax Basic Tax

Old Income Slab Rate New Income Slab Rate
Upto Rs. 190,000 Nil Upto Rs. 190,000 Nil
Rs. 190,001 to Rs.300,000 10% Rs. 190,001 to Rs.500,000 10%
Rs. 300,001 to Rs.500,000 20% Rs. 500,001 to Rs.800,000 20%
Above Rs. 500,000 30% Above Rs. 800,000 30%

For resident individual being a Senior Citizen *

Basic Tax Basic Tax

Old Income Slab Rate New Income Slab Rate
Upto Rs. 240,000 Nil Upto Rs. 240,000 Nil
Rs. 240,001 to Rs.300,000 10% Rs. 240,001 to Rs.500,000 10%
Rs. 300,001 to Rs.500,000 20% Rs. 500,001 to Rs.800,000 20%
Above Rs. 500,000 30% Above Rs. 800,000 30%

* Resident individual of the age of 65 years or above shall be called as Senior Citizen

2) Insertion of new section 80CCF:

After section 80CCE, a new Section 80CCF is introduced where deduction upto Rs. 20,000 is allowed
for investments in long-term infrastructure bonds. This is in addition to deduction under section 80C,
section 80CCC and 80 CCD (i.e., Rs 100,000 will be the ceiling limit under section 80C, section
80CCC and section 80CCD cumulatively and Rs 20,000 will be the ceiling limit for section 80CCF).

3) Amendment of section 80D:

Section 80D has been amended to include any contribution made to Central Government Health
Scheme to be part of the ceiling limit of Rs 15,000 for the individual himself.
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TDS

Changes in with holding tax ('WHT'/'TDS') rates as a consequence to enactment of Finance Bill 2010
(Note : All the changes discussed below are applicable from 1st April 2010 unless specified otherwise)

TDS Rate Chart

TDS rates (in %) applicable to amounts credited or payments made to Residents during the F.Y. 2010-11 (covering key TDS
provisions)

Threshold limit per Threshold limit per

annum (Rs.) annum (Rs.) Company Other
[till June 30, [from July 1, Deductee Individual/HUF Deductee
Section Nature of payment 2010] 2010] (%) Deductee (%) (%)
192 Salary Refer Note D
193 Interest on Securities 2,500 2,500 10 10 10
Interest other than interest on
194A securities 5,000 or 10,000 5,000 or 10,000 10 10 10

Payment to Contractors, Sub-

contractors -- Single transaction or
Aggregate of transactions for the FY 20,000 or 50,000 30,000 or 75,000 2 1 2
Payment to Advertising contractors --
194C
Single transaction or Aggregate of
[Refer
transactions for the FY 20,000 or 50,000 30,000 or 75,000 2 1 2
Note C]
Payment to contractor, sub-
contractor in transport business (i.e.
goods carriage) -- Single
transaction or Aggregate of
transactions for the FY 20,000 or 50,000 30,000 or 75,000 Nil B Nil B Nil B
194D Insurance Commission 5,000 20,000 10 10 10
194H Commission/Brokerage 2,500 5,000 10 10 10
Rent
- Plant, Machinery or Equipment 120,000 180,000 2 2 2
194I

- Land, Building or Furniture/Fittings 120,000 180,000 10 10 10

194J Professional/Technical/Royalty etc.. 20,000 30,000 10 10 10

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TDS

Note :

The increase in threshold limits would be effective July 1, 2010 and therefore, taxes would be requried to be
A.
withheld under the respective provisions, based on the threshold limits as on date.

Nil rate will be applicable if PAN is quoted by transporter engaged in business of plying, hiring or leasing of goods
B. carriage, otherwise the rate will be 1% & 2% for individual/HUF and other transporter respectively, subject to the
provisions of section 206AA of Income Tax Act, 1961. Also refer Note E below.

Taxes shall be deducted at source under section 194C of the Income Tax Act, 1961:
(i) on the invoice value excluding the value of materials, if such value is mentioned separately in the invoice; or
C. (ii) on the whole of invoice value, if the value of materials is not mentioned separately in the invoice;
with respect to contract for manufacturing/ supplying product according to the requirement or specification of a
customer by using material purchased from such customer.

TDS on salary will be deducted based on the slab rates mentioned in the first sheet to this file titled "Individual Tax"
D.
with effect from April 1, 2010.

If deductee does not provide PAN, or provides an incorrect PAN, TDS would be applicable at a rate which is higher
E. of (a) TDS rate mentioned in the TDS rate chart above (in case of section 192, the TDS rates mentioned in the first
sheet "Individual Tax') OR (b) 20% OR (c) rate in force applicable. This is applicable in relation to all payments
made or accounted from April 1, 2010 by introduction of new section 206AA in Income Tax Act, 1961.

Surcharge at 2.5% and Education & Secondary Higher Education Cess at 3% will continue to apply for TDS in case
F. of payments to foreign deductee (i.e., Surcharge is applicable in case of foreign companies only and education cess
and secondary higher education cess to apply in case of companies and non - companies).

G. Apart from the above, there have been certain changes made in relation to threshold limits applicable on payments
covered under sections 194B, 194BB which has not been covered in the above table.

H. The erstwhile provision of non-furnishing of TDS certificates for tax deducted and paid on or after the 1st day of
April, 2010 has been omitted. Hence, the requirement to issue TDS certificate needs to be continued.
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Corporate Tax

Changes in income tax law as a consequence to enactment of Finance Bill 2010

(Note : All the changes discussed below are applicable from 1st April 2010 unless specified otherwise)

Surcharge
<> Surcharge is reduced from existing 10 percent to 7.5 percent for every domestic company having
a total income exceeding one crore rupees.

<> Surcharge at 2.5 percent shall continue to apply for every company other than a domestic
company having a total income exceeding one crore rupees.

Minimum Alternate Tax [MAT]

<> MAT rate is increased from existing 15 percent to 18 percent, wherein effective MAT rate will be
19.93 percent.

Amendment of Section 40(a)(ia)

<> Section 40(a)(ia) is amended to provide for non-disallowance of payments in case taxes have
been deducted during the previous year and remitted within the due date for filing return of income.
This amendment would take effect from AY 2010-2011 (i.e., April 1, 2010).

Amendment of Section 10AA

<> Rectification of anomaly in computation of relief under section 10AA, was made effective from AY
2006-07 (i.e., April 1, 2005).

Increase in interest rate under section 201 in relation to remittance of TDS

<> Section 201 is amended to levy interest at the rate of 1.5 percent for failure to pay tax after
deduction for every month or part of a month from the date on which such tax was deducted to the
date on which such tax was actually paid. This amendment would take effect from July 1, 2010.

However, interest of 1 percent shall be payable for failure to deduct tax for every month or part of a
month from the date on which such tax was deductible to the date on which such tax is deducted.
This amendment would take effect from July 1, 2010.

Direct Tax Code

<> Government is keen to implement Direct Tax Code ('DTC') and the same may come into effect
from April 1, 2011.

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