Highlights of The New direct Tax code

Highlights of The New direct Tax code is given below

1.Tax exemption Limit enhanced for Individuals to 200000
2.For senior Citizen limit is 250000.
3.There is no addition limit for Women.
4.200000-500000=10% ,500000-1000000=20% and more than 1000000 30 %
5.Company tax rate is 30%
6.There is no cess and surcharge new direct tax code
7.MAT(minimum alternative tax ) proposed at 20% present rate is 18% plus cess and surcharge
8.Capital gain Long term is now from asset hold more than one years.
9.Indexation Base year to be changed to 01.04.2000 from 01.04.1981 so no tax on gains realised between 1981 to 2000.
10.Tax applicable on capital gain from long term sale of securities ,presently it is exempted.
11.Proposed applicable date is 01.04.2012 (FY 2012-13)
12.The Government has also proposed to restore back the taxation of retirement savings, in the nature of provident fund contributions and pure life insurance and annuity products, to the Exempt-Exempt-Exempt scheme from the earlier proposition of Exempt-Exempt-Tax scheme under the revised discussion paper in the DTC

13.specified percentage deduction from income / indexation benefit depending on the nature of security on assets held for long term

14.in case of short term assets, there is no relaxation to the tax payer and tax will be required to paid as in case of any other ordinary income

15.The code introduces a Rs 50,000 enhanced deduction for savings in addition to old 100000 deduction.
16.Interest on house loan benefit continues ,HRA benefit also have a place in DTC .

You may download the Direct Tax code Bill from Link given below .
Download Direct tax code Bill as introduced in LokSabha On 30.08.2010
The government on Monday introduced in Parliament a bill to overhaul its archaic direct tax codes, a key reform aimed at simplifying procedures for investors and bring in more revenue by widening the tax net.
This switchover to DTC with higher exemption limits and lower corporate tax, Revenue Secretary Sunil Mitra says, will cost the government a revenue loss of Rs 53,172 crore on reduced rates and a loss of Rs 38,829 crore in the first year from corporate tax rate. “India's direct tax collection for 2011-12 is expected to be at Rs 5.27 lakh crore in the first year, if current rates hold,” he adds.The bill proposes to cut tax rates, replace profit-linked exemptions for companies with investment-linked incentives and simplify rules on corporate mergers, aimed at creating a tax code that can support growth in Asia's third-largest economy.
The dividend distribution tax (DDT) for holding companies has been removed up to any level and the securities transaction tax (STT) rate has been kept same at 0.25%. The new code would also scrap cess and surcharge.
The bill will now be applicable from April 1, 2012, instead of the earlier proposed March 1, 2011. This delay, Mitra says will allow time for switchover.

IFCI INFRASTRUCTURE BOND U/S 80CCF CLOSING DATE 31/08/2010

The finance minister announced a new income tax section — 80CCF — which entitles a tax payer to exemptions on money invested in infrastructure bonds.On an investment of Rs 20,000, an individual in the 30% tax bracket can save Rs 6,000 of tax and earn an annual interest of 7.85-7.95%. So, it is a double benefit.the bonds will have a minimum tenure of 10 years, and investors will be locked in for five years.

IFCI has already begun a private placement of unsecured redeemable, non-convertible long-term infrastructure bonds of up to Rs 20,000 for this financial year. The interest rate is 7.85% for buyback option and 7.95% for non-buyback option, under cumulative and non-cumulative (September 15 yearly) interest schemes. However, under the 7.85% bonds with a buyback option, the investor can redeem the bonds after the fifth year. The buyback starts from 2015 to 2019. The 5-year lock-in is compulsory to avail of the 80 CCF benefit.Those who have already exhausted their annual tax savings limit of Rs 1 lakh will be keenly looking at these bonds. The exemption for investments in infrastructure bonds is in addition to the investments of Rs 1 lakh in tax-saving instruments under Section 80C, 80CCC, 80CCD. After the lock-in period, an investor can take loans against these bonds.

Guidelines for selection of cases for Scrutiny During 2010-11

Selection of cases for scrutiny during the financial year 2010-11 will be done primarily through CASS this year. Manual Selection for scrutiny this year will be limited only to a few cases listed below

2. List of cases selected during each month in accordance with selection criteria mentioned below shall be submitted by the Assessing officers to their respective Range heads by the 15th of the following month and also displayed on the notice Board of their offices .

3. These guidelines are meant only for the use of officers of the Income Tax Department .These are not to be disclosed even if a request is made under Right to Information Act, In view of the decision of the Central Information Commission in the case of Shri Kamal Vs Director (ITA-II),CBDT(order no CIC/AT/2007/00617 dated 21.02.2008)

Selection criteria Applicable to all return at all stations

a) Value of International transaction as defined in 92B exceeds 15 Crore.

b) Cases involving addition in an earlier assessment year in excess of Rs 10 lacs on a substantial and recurring question of law or fact which is confirmed in appeal or is pending before on appellate authority.

c) Cases involving addition in an earlier assessment year on the issue of transfer pricing in excess of Rs 10 Lakh or more.

d) Assessment in survey cases for the financial year in which survey was carried out. This criteria will not apply if all of the following conditions are fulfilled:

i. There are no impounded books or documents.
ii. There is no retraction of disclosure, if any, made during the survey.
ii. Declared income, excluding any disclosure made during the survey, is not less than the declared income of the preceding year.

e) Assessment in search & Seizure cases to be made under section 158B, 158BC, 158BD, 153A, 153C & 143(3) of the IT Act.

f) Assessment Initiated under section 147/148 of the IT Act.

g) Assessing officer may select any return for scrutiny after recording he reason and obtaining approval of the CCIT/DGIT. The cases under this category should be selected if, there are compelling reasons and the case is not selected through CASS. These cases should be watched by CCIT/CIT in respect of the quality of assessment.

(F.NO.225/93/2009/ITA.II)

Income Tax Return Date Extended to 4th August 10

The CBDT has decided to extend the due date of filing of Income Tax returns from 31st July 2010 to 4th August 2010. All paper returns or e-returns filed on or before 4th August, 2010 would be considered as filed within the due
press Release
The Central Board of Direct Taxes (CBDT) has decided to extend the due date of filing of income tax returns to 4th August 2010 for taxpayers for whom the due date ends today, which is 31st July 2010. All paper returns or e-returns filed on or before 4th August 2010 will be considered as filed within the due date.
The decision was taken in view of some technical snags in the e-filing computer system, and inclement weather at various locations, due to which taxpayers have reported difficulties in filing or uploading income tax returns.