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The Direct Taxes CODE, 2010: Bill No. 110 of 2010
The Direct Taxes CODE, 2010: Bill No. 110 of 2010
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BASIS OF CHARGE
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RESIDENTIAL STATUS
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TOTALfinancial year the total income of any of a person, who is a resident, shall INCOME whatever include all income from
source derived which
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Any income which accrues to a resident outside India during he year, or is received outside India during the year by, or on behalf of, such resident, shall be included in the total ncome`of the resident, whether or not such income has been charged to tax outside India.
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Income from Special Sources include interest, dividends on which distribution tax has not been paid, capital gains, any other investment income, royalty, fees for
Income from Special sources are given no deduction and what is earned is taxed directly.
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Capital gains
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TAX INCENTIVES
Major Deductions applicable under the Tax Incentives for an individual are:
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0 - 1.60 Lakhs 0% 1.60 Lakhs to10 Lakhs 10% 10 Lakhs to 25 Lakhs Above 25 Lakhs 20% 30%
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In the case of woman below the age of sixty five years at any time during the financial year:
Slab 1 2 3 4 Income Between 0 - 1.90 Lakhs 1.90 Lakhs to 10 Lakhs 10 Lakhs to 25 Lakhs Above 25 Lakhs Tax rate 0% 10% 20% 30%
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Previous Year
Financi al Year
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Terminology of Assessed
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NOW
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3 4
The corporate tax rate of domesticThe corporate tax rate of all companies company is 30% and for foreignreduced to 25%. Business losses can be company, it is 40%. Business lossescarry forward for unlimited period. can be carry forward for 8 yrs. DividendDividend distribution tax remains at 15%. distribution is at 15%. 6 Wealth tax rate is 1% above Rs.30 lacs.Wealth tax rate reduced to 0.25% above Definition of wealth includes someRs.50 crore except for private specific assets excluding investmentsdiscretionary trust, for which no threshold in shares. It was applicable to alllimit will be available. Definition of wealth 4/15/12 assessee. has been expanded to include all assets,
Self-occupied house property whose Self-occupied house property whose gross rent is taken as NIL, used to get gross rent is taken as NIL, will not get deduction of interest on loan. deduction of interest on loan. Deduction for repair based on annual Deduction for repair on annual value value in case of rented house property in case of rented house property is is 30%. proposed to reduce to 20%. As per section 80C certainExempt-Exempt-Taxation (EET) investment/savings upto Rs. 1 lac weremethod of taxation of deductible from taxable income. savings/investment, will be applied on new contribution after commencement of the code. Limit for investment raised to Rs.300000 p.a. However deduction on investment in tax-saving mutual funds and fixed deposits have been abolished. Income from Salary includes allAll such exemption withdrawn. perquisites such as house rent, leave travel assistance, children education allowances, encashment of unavailed earned leave on retirement, medical reimbursement and free/concessional medical treatment paid/provided etc is exempt up to a certain limit.
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Positives of DTC
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Negatives of DTC
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INCOME RS 15,00,000
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NOW, AFTER DTC TAXABLE INCOME = RS 3,00,000 TAX FOR 1ST RS1,60,000 = NIL TAX FOR NEXT RS 1,40,000 = RS 14,000@ 10% TOTAL TAX LIABILITY (EXCLUDING EDUCATION CESS @ 3%) = RS 14,000
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SUPPOSE THE TAXABLE INCOME IS RS 8,30,000 FROM CURRENT TAX SLAB TAX FOR 1ST RS 1,60,000 = NIL TAX FOR NEXT3,40,000= RS 34,000 @ 10 % TAX FOR NEXT 3,00,000 = RS 60,000 @ 20%
4/15/12 TAX FOR NEXT 30,000 = RS 9000@
NOW, AFTER DTC TAXABLE INCOME = RS 8,30,000 TAX FOR 1ST RS1,60,000 = NIL TAX FOR NEXT RS 6,70,000 = RS 67000@ 10% TOTAL TAX LIABILITY (EXCLUDING EDUCATION CESS @ 3%) = RS 67,000
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SUPPOSE THE TAXABLE INCOME IS RS 10,00,000 FROM CURRENT TAX SLAB TAX FOR 1ST RS 1,60,000 = NIL TAX FOR NEXT3,40,000= RS 34,000 @ 10 % TAX FOR NEXT 3,00,000 = RS 60,000 @ 20%
4/15/12 TAX FOR NEXT 2,00,000 = RS 60,000@
NOW, AFTER DTC TAXABLE INCOME = RS 10,00,000 TAX FOR 1ST RS1,60,000 = NIL TAX FOR NEXT RS 8,40,000 = RS 84,000@ 10% TOTAL TAX LIABILITY (EXCLUDING EDUCATION CESS @ 3%) = RS 84,000
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SUPPOSE THE TAXABLE INCOME IS RS 15,00,000 FROM CURRENT TAX SLAB TAX FOR 1ST RS 1,60,000 = NIL TAX FOR NEXT RS 3,40,000= RS 34,000 @ 10 % TAX FOR NEXT RS 3,00,000 = RS 60,000 @ 20%
4/15/12 TAX FOR NEXT RS 7,00,000 = RS
NOW, AFTER DTC TAXABLE INCOME = RS 15,00,000 TAX FOR 1ST RS1,60,000 = NIL TAX FOR NEXT RS 8,40,000 = RS 84000@ 10% TAX FOR NEXT RS 5,00,000 = RS 1,00,000 TOTAL TAX LIABILITY (EXCLUDING 4/15/12 EDUCATION CESS @ 3%) = RS
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