Budget 2010

IMPLICATIONS FOR INDIVIDUALS WITH THE BUDGET 2010

Enclosed are only those parts of the budget which will affect you directly.
1. TAX RATES
Tax rates have widened to encourage consumption and saving

Revised Tax Rates Earlier Tax Rates
Unto Rs 160,000 - Nil Unto Rs 160,000 – Nil
Rs 160,000 to Rs 500,000 – 10% Rs 160,000 to Rs 300,000 – 10%
Rs 500,000 to Rs 800,000 – 20% Rs 300,000 to Rs 500,000 – 20%
Rs 800,000 and above – 30% Rs 500,000 and above – 30%

For women and senior citizens the tax free limit is Rs 190,000 and Rs 240,000 respectively.

2. New Direct Tax Code will be implemented by 1st April 2011. I will be looking at the implication of this shortly.

3. Deduction of Rs 20,000 allowed for investment in Long Term Infrastructure bonds over and above the 80C limit of Rs 100,000

4. Dividend:
Dividend on Equity and debt continue to be tax free. Dividend on equity mutual funds also not taxed. No dividend distribution tax for equity mutual fund. However for debt mutual fund the dividend distribution tax is 13.841% (22.145% for corporate) and liquid funds it is 27.681% for both individuals and corporate.

5. Renting:
Renting of immovable property to attract service tax

6. Auditing of Accounts:
(a) Professionals with income of more than Rs 15 lacs.
(b) Companies with business more than Rs 60 lacs.

7. New Pension Scheme
The Government will give Rs 1000 per year to each person who joins the NPS with an annual investment of upto Rs 12000.