FINANCE ACT

(NO.2) 2009
Prepared by:
Leena Kanjani (08080)
Mehul Rakholiya (08101)
Bhavna Thakker (09112)
Krishna Vyas (08118)
 For the grant of tax exemption previously the
application was to be filled at any time in the
F.Y. for which the tax exemption was needed.

 The amendment is the period in which

application is to be filed is extended. For A.Y.
2009-10 & subsequent years, such application is
required to be made on or before 30th sept., of
the relevant A.Y.
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 For this section previously „public sector bank‟ to
mean the SBI, subsidiary bank as defined in the
SBI (subsidiary banks) Act,1959 a corresponding
new bank constituted u/s 3 of banking companies
Act, 1970/1980.

 The amendment for this sec. is the public sector

banks include a bank included in the category
other public sector banks by RBI
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 At present income of industrial undertaking from the
export of articles and things or computer software is
exempt.

 Under the provision to section 10 A (1) and 10 B(1),

the exemption was available only upto A.Y. 2010-11.

 Under the amendment of the set provision to sec. 10

A(1) and 10 B(1) the terminal date of exemption is
extended by further 1 assessment year i.e. upto A.Y
2011-12 instead of 2010-11
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 Electoral Trust: A Trust so approved by Board in
accordance with the scheme made this regard by
the central government

 With effects from 1st April 2010 a new section 13

(B) is inserted which says the voluntary
contribution recd by electoral firm in the previous
year shall not be included in total income if:
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a) If 95% of its total income (donation received in
the previous year along with surplus brought
forward from any earlier previous year) is
distributed to any political party registered
under sec. 29A of the Representation of the
People Act, 1951.

b) Such electoral trust functions and accordance

with the rules made by the Central
Government.

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 Inview of discontinuous of fringe benefit tax for
A.Y 2010-11 onwards, the value of such specified
FBT & facilities is not chargeable to tax in the
hence of employer.

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 In section 32 of the Income Tax Act, in sub-
section (1), in explanation 3, for the words „the
expression “asset” and “block of asset”, the
words „the expression “asset” shall be
substituted with effect from 1st April 2010.

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 Section 43(1)

 Section 28(vii)

 Section 73A

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 Previously zero coupon bonds were issued only
by infrastructure capital company (ICC),
infrastructure capital fund (ICF), Public sector
company(PSC).

 On or after 1/4/09 schedule bank can also issue

zero coupon bonds.

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Condition 1 Remuneration should be paid only to a
working partner
Condition 2 Remuneration must be authorised by the
partnership deed.
Condition 3 Remuneration should not pertain to prior to
partnership deed.
Condition 4 Remuneration should not exceed the
permissible limit.

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In case of firm carrying on profession referred to in section 44AA-

a. On the first Rs. 1,00,000 of the Rs. 50,000 or at the rate of 90% of
book profit or in the case of a loss the book profit, whichever is more
b. On the next Rs. 1,00,000 of the At the rate of 60%
book profit
c. On the balance of the book At the rate of 40%
profit
In the case of any other firm-
a. On the first Rs. 75,000 of the Rs. 50,000 or at the rate of 90% of
book profit or in case of a loss the book profit, whichever is more
b. On the next Rs. 75,000 of book At the rate of 60%
profit
c. On the balance of the book At the rate of 40%
profit
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In case of a firm carrying on a profession referred to in
section 44AA and also in the case of any other firm -

a. On the first Rs. 3,00,000 of Rs 1,50,000 or at the rate of

the book profit or in the case 90% of the book profit,
of a loss whichever is more;

b. On the balance of the book At the rate 0f 60%

profit

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Condition 1 The assessee incurs any expenditure which is
otherwise deductible under the other provision
of the Act for computing business/profession
income. The amount of expenditure exceeds
Rs. 20,000
Condition 2 A payment in respect of the above expenditure
exceeds Rs. 20,000
Condition 3 The payment mentioned in condition two is
made otherwise than by an account payee
cheque or an account payee demand draft .

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Condition 1 The taxpayer be an individual, HUF, AOP, BOI, firm, company, co-
operative society or any other person. He or it may be a resident or a
non resident
Condition 2 The taxpayer is engaged in the business of civil construction or
supply of labour for civil construction work. The expression “civil
construction includes the construction (or repair) of buildings,
claims, bridges or other structures, or of roads and canals. It also
includes the execution of any other work contract. It thus includes
work related to electical fittings, plumbing jobs, landscaping work,
etc. the taxpayer may be s contractor or sub- contractor.
Condition 3 Gross receipts from the above business do not exceed Rs. 40 lakh.
Gross receipts are the amount received from the clients for the
contract and will not include the value of material supplied by the
client
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Condition 1 The taxpayer be an individual, HUF, AOP, BOI, firm,
company, co-operative society or any other person. He or
it may be a resident or a non resident
Condition 2 Taxpayer is engaged in the business of plying, hiring or
leasing goods carriages.
Condition 3 The taxpayer owns not more than 10 goods carriages at
any time during the previous year. For this purpose, a
taxpayer, who is in possession of a goods carriage,
whether taken on hire purchase or an instalments and for
which the whole or part of the amount payable is still due,
shall be deemed to be the owner of such goods carriage
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 Types of goods Estimated income
carriage
Heavy goods Rs. 3,500 for every month(or part of a
vehicle month) during which the goods
carriage is owned by the taxpayer.
Other than heavy Rs. 3150 for every month(or part of a
goods vehicle month) during which the goods
carriage is owned by the taxpayer.

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Condition 1 The taxpayer be an individual, HUF, AOP,
BOI, firm, company, co-operative society or
any other person. He or it may be a
resident or a non resident
Condition 2 The taxpayer is engaged in the business of
retail trade in any goods or merchandise.
Condition 3 Total turnover from the above business does
not exceed Rs. 40 lakh

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Condition 1 The taxpayer is an individual
Condition 2 He is employed by the central government
or by any other employer on or after
January 1, 2004
Condition 3 He has in the previous year paid or
deposited any amount in his account under
a pension scheme notified by the central
government.
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Condition 1 The taxpayer is an individual
Condition 2 He is employed by the central government
or by any other employer on or after January
1, 2004 or any other assessee, being an
individual
Condition 3 He has in the previous year paid or
deposited any amount in his account under a
pension scheme notified by the central
government.

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 Deduction for an undertaking which develops,
operates or maintains a notified industrial park u/s
80-IA(4)(iii)

 Deduction for an undertaking set up in any part of

india for generation or generation and distribution
of power u/s 80-IA(4)(iv)(a)

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 Deduction for an undertaking which starts
transmission or distribution by laying a
network of new transmission or distribution
lines u/s 80-IA(4)(iv)(b)

 Deduction for an undertaking which

undertakes substantial renovation and
modernization of the existing network of
transmission or distribution lines u/s 80-
IA(4)(iv)(c)

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 Deduction for an undertaking carrying on the
business of laying & operating a cross- country
natural gas distribution network including
pipelines & storage facilities u/s 80-IA(4)(vi).

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 An undertaking which begins commercial
production/refining of mineral oil located in
any part of India u/s 80-IB(9)

 An undertaking developing and building

housing projects u/s 80-IB(10)

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 Conditions

 Amount of deduction

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 Provision for levy of minimum alternate tax u/s
115JB

 Tax credit for tax paid u/s 115JB

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 In case of a limited liability partnership

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 Liabilityof partner of limited liability partnership
in liquidation.

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  Distinction between contractor and sub – contractor are
removed

 Tax rates

Presents Proposed
Advertisin Other Income-
g contracts tax
contracts Payment to individual or 1%
Income-tax Income- HUF
tax
Payment to person 2%
Payment to 1% 2%
other than individual or
contractor
HUF
Payment to 1% 1%
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sub-
 When tax is not deductible
• Single payment below 20,000
• Aggregate payment during the financial year does not
exceed Rs. 50,000.
• No deduction shall be made on a payment to a
contractor during the course of business of plying,
hiring or leasing goods carriages on furnishing of his
PAN to the person paying or crediting such sum.

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Nature of Present rate Proposed rate
payment
Rent on 10% 2%
machinery or plant
or equipment
Rent on land or
building or
furniture or fitting
Individual or HUF 15% 10%
Other person 20% 10%

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 PROCESSING OF STATEMENTS OF
TDS U/S 200A
 Sum deductable shall be computed.
 The interest if any shall be computed.
 The sum payable by or the amount of refund due to the
deductor shall be determined after adjustment of amount
computed.
 An intimation shall be prepared or generated and sent to
the deductor specifying the sum determined to be
payable by or the amount of refund.

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 PAN has a mandatorily furnish by person receiving
payment on which tax is deductible.
 Failure to furnish PAN shall result in tax deduction at
higher of the following rate:
• At the rate specified in the relevant provision of this act or
• At the rate or rates in force or
• At the rate of twenty percent.

 Declaration for nil TDS is valid only if PAN furnish in

the declaration.
 certificate for nil or reduced TDS shall not be granted
unless PAN furnish in the application made for such
purpose. 41
 Atpresent it is obligatory to pay advance tax
where the advance tax payable is Rs. 5000 or
more.

 Butfrom the assessment year 2010-11 the limit is

increase from Rs. 5,000 to Rs.10,000.

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 Presents Proposed
Income slab(INR) Rate Income slab(INR) Rate
Upto 1,50,000 Nil Upto 1,60,000 Nil
1,50,001- 3,00,000 10% 1,60,001- 3,00,000 10%
3,00,001- 5,00,000 20% 3,00,001- 5,00,000 20%
Above 5,00,000 30% Above 5,00,000 30%

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 Basicexemption limit for resident women below
65 years is increased from Rs. 1,80,000 to Rs.
1,90,000
 Basic exemption limit for resident above 65 years
is increased from Rs. 2,25,000 to Rs. 2,40,000.
 Surcharge abolished and Education cess continue
at 3%.

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 No changes proposed in tax rates
 No change in rates of surcharge and education
cess for corporate tax payers.

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