The rates of tax for individual, HUFs, AOPs & BOIs are to be
reduced substantially as under:-
Income below 40,000
-
No Tax
Between 40,000 to 60,000
-
10%
Between 60,001 to 150,000
-
20%
Between 150,001 and above
-
30%
My Comments : This is one good point to widen the tax law and induce people to pay
the tax. The Finance Minister has not only increased the
slab rates but also reduced the tax % to be paid.
With this revoking, I would like to bring to your point that
this would be the only and major income for the Finance
Minister, rest direct/indirect tax being abolished or curbed
down.
The rate of tax for partnership firm is to be reduced from
40% to 35%.
The rate of tax in respect of long term capital gain
arising on transfer of specific assets covered by chapter
XII A to NRI is to be reduced from 20% to 10%.
The maximum permissible standard deduction U/S 16(i) is to
be enhanced to Rs. 20,000 in respect of all salaried
employees, from the earlier limit of Rs. 15,000 and
Rs. 18,000/- for man & woman respectively. My Comments : That means
the person earning maximum of 75,000 and investing in PF
would not have to pay any tax. After all the salaried people
are the only honest tax payers because of the T.D.S. scheme
and they really deserve the same.
Dividend declared, distributed or paid by a domestic company
on or after 1st June 1997 are to be totally exempted from
tax in the hands of all category share holders U/S 10(33).
No deduction in respect of dividend income would be
available U/S 80L for the A.Y. 1998-99. It means, dividend
declared, distributed or paid from 1st April to 31st May,
1997 would be taxable fully without any deduction U/S 80L.
Income from units of UTI and other mutual funds would
continue to be liable to tax, subject to deduction U/S 80L.
The additional deduction of Rs.3000/- U/S 80L (within the
overall limit of Rs.15,000/-) is now to be extended to
interest on Central/State Government Securities.
It is proposed to exempt capital gain arising on transfer of
membership of a non Corporate member of a recognised stock
exchange to a company in exchange of shares of that company
on or before 31st December 1997. Share so alloted to member
will be subject to lock in period of 3 year (U/S 47
& U/S 47A).
The maximum permissible standard deduction from family
pension is being enhanced from Rs. 12,000/- to Rs. 15,000/-
U/S 57(iia).
Deduction U/S 80GG in respect of rent paid by an assessee
for residential accommodation is to be deleted.
The tax rebate U/S 88 is to be extended to subscription to
equity shares / debenture of a public company engaged in
providing telecommunication services (basic or cellular)
within the existing limit of Rs.14,000/-.
All resident Individuals of age sixty five years and above
are to be eligible to a rebate from income tax at the rate
of 100% subject to a limit of Rs.10,000/- irrespective of
the income earned by such persons. Thus, a senior citizen
will not pay any tax upto an income of Rs.1,00,000/- and
will get a rebate of Rs.10,000/- in case of higher income.
In order to broaden the tax base and to bring more persons
into the tax net, it is proposed to amend section 139 to
provide that, besides persons already filing return, any
person fulfilling ANY TWO OF THE FOLLOWING CONDITIONS shall
also be required to file a return of his income, if such
person:
Is the owner or lessee of a motor vehicle (Four wheeler).
Is in occupation of an immovable property exceeding a
specified area, whether by way of ownership or tenancy or
otherwise.
Has incurred expenditure for himself or any other person on
travel to any foreign country.
Is a subscriber of a telephone.
Failure to file such return within the prescribed time
will attract a penalty of five hundred rupees. Initially,
these provisions will be applicable to only some notified
selected cities. It is to be noted that this provisions
will be EFFECTIVE FROM A.Y. 1997-98.
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