I am into retail trading and expect my business turnover to be Rs 50 lakh for the financial year 2010-11. Can you please advice me whether I would be require to get my books of accounts audited from a chartered accountant in FY11 and what is turnover limit under the Direct Tax Code Bill?
–Jayant Mangaldas
The requirement to get books of accounts audited is covered by section 44AB of the Income Tax Act, under which if the total sales, turnover or gross receipts in business exceeds Rs 60 lakh for financial year 2010-11 then the books of accounts have to be audited by a chartered accountant. In your case, since the turnover is below limit of Rs 60 lakh, you are not required to get your books of accounts audited. As per the DTC, which is proposed to be effective from April 1, 2012, the turnover limit for business is proposed to be increased to Rs 1 crore.
I am a salaried individual working with a private company. I am getting a medical reimbursement of Rs 15,000 from the company per year on submission of medical bills and claiming it as exempt in my income tax returns. Will the limit of medical reimbursement be increased in the new DTC?
–Anuradha Sharma
Yes, under the DTC, the reimbursement of medical expenses incurred by the employee on self and family is proposed to be exempt from tax up to Rs 50,000 per annum as against the current limit of Rs 15,000 per annum available under the present Income Tax Act 1961.
I purchased a house in Delhi in January 2005, which I plan to sell now. The long-term capital gains are subject to 20% tax, after considering the indexation benefit. Will I be entitled to same kind of benefit in future with DTC?
– Madan Ragagopal
Under the present I-T Act capital gain arising on transfer of long term (asset held for more than three years) capital asset shall be taxable at 20% after considering the indexation benefit. Under DTC, a investment asset held for more than one year from the end of the financial year in which the asset was acquired, shall be eligible for indexation benefit. Capital gains shall be taxed at normal income tax rates subject to indexation benefit.
I had taken an education loan and have started repayment from April 2010. Kindly advice on the tax benefits under the Income Tax Act?
–Raman Yadav
Under section 80E of the I-T Act, 1961 you can claim the deduction of interest paid on such loan against your income chargeable to tax for the financial year 2010-11 and seven immediately succeeding years or until the interest is paid, whichever is earlier. In the proposed DTC, this provision of deduction of interest on repayment of loan for higher studies is proposed to be continued.
* The writer is founder of RSM Astute Consulting Group
* Send your queries at fepersonalfinance@expressindia.com
