In the recent Budget 2010, an additional deduction was announced or Rs. 20,000 for investment in infrastructure bonds. Is this within the overall limit of Rs. 1 lakh of Sec. 80C?
? Honnenahalli
Budget 2010 has proposed a new Sec. 80CCF that will offer a deduction of up to Rs. 20,000 next year onwards for investment made in infrastructure bonds. This Rs. 20,000 is over and above the Rs. 1 lakh Sec. 80C limit. The details as to the term of these bonds, the lock-in period, the issuing institutions etc. are yet to come out.
What are the changes brought about in the NPS (New Pension Scheme) in this year?s budget?
?Nidhi
The NPS has not taken off as expected. Now the Government proposes to contribute Rs.1,000 per year for three years to each NPS account opened in the year 2010-11. This initiative, “Swavalamban” will be available for persons who join NPS, with a minimum contribution of Rs.1,000 and a maximum contribution of Rs.12,000 per annum during the financial year 2010-11.
I am self employed and find myself covered by Sec. 44AB tax audit. Can you elaborate on the amendments in this section brought about by the budget?
?Kadowala
Under the existing provisions of section 44AB, every person carrying on business is required to get his accounts audited if the total sales, turnover or gross receipts in business exceed Rs. 40 lakh. Similarly, a person carrying on a profession is required to get his accounts audited if the gross receipts in profession exceed Rs. 10 lakh. These limits have been increased to Rs. 60 lakh and Rs. 15 lakh respectively.
Kindly guide on Budget 2010:
* Whether TDS will be effected by banks for interest above Rs.10,000 and Form 15 G/H will be accepted by banks?
* Whether short-term and long-term. gains on trading in shares has been clubbed with other incomes for 10% tax upto Rs.5,00,000 or 15% on short-term gain continues and long-term gain exempted?
* Whether 10% surcharge has been removed for individuals for income above Rs.10,00,000?
* Whether service tax 10% is applicable on residential flat let out by a senior citizen for a living?
* Whether TDS 10% is to be deducted from brokerage to be paid to an estate agent, above Rs.5,000?
?Rikhav
There is no change in TDS on bank deposits. TDS continues to be applicable for interest above Rs. 10,000. Those not liable to tax may furnish Form 15G or 15H to the bank as the case may be.
Again, there is no change in the capital gains tax system. Long-term gains from equity continue to be tax-free whereas short-term gains will be taxed at 15%.
The surcharge has been done away with during the last budget itself.
Service tax of 10% is applicable only for renting of commercial property and not for renting residential property.
The threshold for TDS on commission or brokerage has been increased to Rs. 5,000 from the erstwhile Rs. 2,500 by Budget 2010.
I retired from Punjab State Electricity Board (PSEB), a Punjab government PSU, in November .2009. My gratuity is calculated at Rs 6,02,000.
Will any Income Tax be deducted on its payment to me?
?Devinder Barnala.
Any death-cum-retirement gratuity received under the pension rules (or any similar scheme) by employees of central or state government, any local authority or defense and civil services is wholly exempt u/s 10(10i).
Gratuity received under the Payment of Gratuity Act, 1972 is exempt u/s 10(10ii) up to a limit of gratuity paid at the rate of 15 days (last drawn) salary per year of completed service or part thereof in excess of 6 months or Rs. 3.5 lakh whichever is less, provided the employee has been in continuous service for 5 years.
U/s 10(10iii) in the case of employees of other statutory corporations and employees in the private sector to whom the Payment of Gratuity Act is not applicable, gratuity received by an employee the exempt amount would be the least of :
* Actual amount of gratuity.
* Half month?s salary for number of years of service calculated on the basis of average salary for the last 10 months.
* Rs. 3,50,000.
Salary includes DA if the terms of employments so provide but excludes all other allowances, bonuses, commissions and perks.
I am holding some equity shares in demat form with a depository jointly with my minor son. In this way I am able to handle and have full control on the shares independently.
But I wish that my wife should replace me and have joint holding with my minor or major son according to the time but only after my death.
Please advise me, what should I do which should be legal and acceptable to the depository.
? S. J. Singh,
It is dangerous to hold a joint account with a minor. Realise that a minor is not allowed to enter into a sale or purchase contract with anyone.
You may open another demat account of your major son with you and your wife as joint holders and transfer the shares to that account.
The authors may be contacted at wonderlandconsultants@yahoo.com
