The finance minister mentioned in his speech that the 10% surcharge has been eliminated. Has this been eliminated only for individuals or also for other categories of taxpayers such as HUFs, companies, etc? Also, for an individual, can you quantify the exact monetary consequence of not having to pay a surcharge?
?Ritesh
The 10% surcharge has been discontinued for all categories of taxpayers except for corporates. Corporates continue to pay a surcharge if their income is above Rs 1 crore. For individuals, the surcharge was only applicable to income above Rs 10 lakh. Therefore, this move will essentially benefit only those earning above this limit. In other words, for these taxpayers, the tax rate has come down from 33.99% to 30.9%. The 3% education cess stays put for all taxpayers. As far as monetary consequence goes, it would depend upon the level of income. The following are a few examples.
Budget 2009 has eliminated the fringe benefit tax (FBT). However, it was reported in the media that employees will have to pay perquisite tax instead. Can you throw some light on exactly how this will work?
?N Bhosle
Abolition of the much-hated FBT is good for employers but not so good for employees. The reason is that though the consequential amendments in Rule 3 have yet to be notified, in all probability, many of those items that were taxable as FBT will now be subjected to perk tax in the hands of the employees, Though the FBT in most cases was being transferred/borne by the employee – however, such FBT was @ 6.8%. Now, since items earlier under FBT will be added to the employee’s income as a perquisite, the tax will be applicable at the slab rates, which in all cases are above 6.8%.
What is the nature of changes brought about by Budget 2009 so far as gift tax is concerned?
?Vidyadhar
Actually, gift tax has been discontinued since 1998. Now, certain gifts are subject to income tax in the hands of the receiver. As per Sec 56, any sum above Rs 50,000 in the aggregate received from non-relatives is taxable as income of the recipient. Since these provisions were applicable to ‘a sum of money’, hitherto, non-cash gifts used to escape this gift tax net. For example, one could gift say shares to anybody else (not necessarily a relative) and yet escape paying any tax on this transaction. Budget 2009 has effectively plugged this loophole.
Now, the value of any non-cash property such as land or building or shares and securities, jewellery, etc gifted without consideration will be subject to income tax in the hands of the recipient.
For immovable property, if the stamp duty valuation less the consideration if any is above Rs 50,000, it will be taxable, whereas for movable property, the fair market value is substituted for the aforementioned stamp duty value for arriving at the assessable value of the gift.
Note that there is a specific list of non-cash property — this list has land and building, shares and securities, jewellery, archaeological collections, drawings, sculptures, paintings and works of art.
This means that gifts of any items other than the ones enumerated above will still be tax-free. For example, say your close family friend or any non relative were to gift you a car — since a car is not included in the list and hence this gift would fall outside the purview of this section.
Note that these new provisions are applicable from this year from October 1, 2009, unlike most others that are generally applicable from the next financial year.
I am retired from HAU Hisar as professor in January 2009 and travelling out of India up to September 7, 2009.I have not received my Form-16 yet. I want your guidance for filing returns electronically/by email. Can I file in September and if not, how can I submit my return?
? Dr.Hooda
Though the regular due date of filing your tax return is by July 31, 2009, you can file your return before March 31, 2010, provided you have paid your taxes and nothing is due from you to the exchequer.
You can also file your returns electronically. Detailed instructions for the same can be found at http://incometaxindiaefiling.gov.in. Fortunately, no annextures are required to be filed along with the returns. You will have to get the original Form-16 in due course and keep it with you.
What are the changes in the Budget with respect to advance tax and wealth tax?
?Bhadha
Advance tax needs to be paid if the tax payable for any financial year is Rs 5,000 or more. This limit has been doubled to Rs 10,000. On the wealth tax front, currently wealth tax is charged @1% if the net wealth exceeds Rs 15 lakh. This limit too is being doubled to Rs 30 lakh.
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