THE DIRECT TAXES CODE, 2010

Bill No. 110 of 2010

PRESENTED Master Click to edit BY :- subtitle style SUPRIT SHARAN ARPITA SINGH

4/15/12

WHAT IS INCOME TAX?

4/15/12

4/15/12

THE DIRECT TAX CODE, 2010

4/15/12

BASIS OF CHARGE

4/15/12

RESIDENTIAL STATUS

4/15/12

4/15/12

TOTALfinancial year the total income of any of a person, who is a resident, shall INCOME whatever include all income from
source derived which

4/15/12

For Non- Resident

Subject to the provisions of this Code, the total income of any financial year of a person, who is a non-resident, shall include all income from whatever source derived which

4/15/12

Any income which accrues to a resident outside India during he year, or is received outside India during the year by, or on behalf of, such resident, shall be included in the total ncome`of the resident, whether or not such income has been charged to tax outside India.

Please Note That

4/15/12

CLASSIFICATION OF SOURCES OF INCOME

4/15/12

Income from Special sources

4/15/12

Income from Special Sources include interest, dividends on which distribution tax has not been paid, capital gains, any other investment income, royalty, fees for

Income from Special sources are given no deduction and what is earned is taxed directly.
4/15/12

Income from Ordinary sources

4/15/12

Income from employment

4/15/12

Income from House Property

4/15/12

Income from Business

4/15/12

Capital gains

4/15/12

Income from Residuary Sources

4/15/12

TAX INCENTIVES
Major Deductions applicable under the Tax Incentives for an individual are:

4/15/12

The EET Model for Investments

4/15/12

EARLIER EEE - MODEL

4/15/12

New Tax rates for individuals

Slab Income Between, 1 2 3 4 Tax rate

0 - 1.60 Lakhs 0% 1.60 Lakhs to10 Lakhs 10% 10 Lakhs to 25 Lakhs Above 25 Lakhs 20% 30%

4/15/12

In the case of woman below the age of sixty five years at any time during the financial year:
Slab 1 2 3 4 Income Between 0 - 1.90 Lakhs 1.90 Lakhs to 10 Lakhs 10 Lakhs to 25 Lakhs Above 25 Lakhs Tax rate 0% 10% 20% 30%

4/15/12

In the case of senior citizens

Slab 1 2 3 4 Income Between 0 - 2.40 Lakhs 2.40 Lakhs to 10 Lakhs 10 Lakhs to 25 Lakhs Above 25 Lakhs Tax rate 0% 10% 20% 30%

4/15/12

New due dates for Tax Returns:

Sl. No Type 1 2 Date First filing (under DTC) 30/06/2013 31/08/2013 Non-Business / Non- 30th June Corporate Others 31st August

4/15/12

SOME FACTS ABOUT DTC,2010

4/15/12

4/15/12

Previous Year

Assessm ent Year

Financi al Year
4/15/12

Terminology of Assessed

4/15/12

Impact on Residential status

4/15/12

NOW

4/15/12

Recent Tax Code v/s DTC

Sl. No. 1 Before DTC After DTC 2 At present there are two legislation i.e.Single code for Income Tax Act and Income Tax Act, 1961 and Wealth TaxWealth Tax Act. The code consists of 285 Act, 1957. sections. There are three kind of ResidentialResidential status of Resident but not status i.e Resident, Non Residentordinarily resident has been done away and Resident but not Ordinarilywith. Resident. There are previous year andTo eliminate confusion only Financial assessment year. Year will prevail. Date of filing of tax return 31st July forDate of filing of tax return preponed to non-business non-corporate assessee30th June for non-business non-corporate and 30th Sept for others. assessee and 31st Aug for others

3 4

The corporate tax rate of domesticThe corporate tax rate of all companies company is 30% and for foreignreduced to 25%. Business losses can be company, it is 40%. Business lossescarry forward for unlimited period. can be carry forward for 8 yrs. DividendDividend distribution tax remains at 15%. distribution is at 15%. 6 Wealth tax rate is 1% above Rs.30 lacs.Wealth tax rate reduced to 0.25% above Definition of wealth includes someRs.50 crore except for private specific assets excluding investmentsdiscretionary trust, for which no threshold in shares. It was applicable to alllimit will be available. Definition of wealth 4/15/12 assessee. has been expanded to include all assets,

Self-occupied house property whose Self-occupied house property whose gross rent is taken as NIL, used to get gross rent is taken as NIL, will not get deduction of interest on loan. deduction of interest on loan. Deduction for repair based on annual Deduction for repair on annual value value in case of rented house property in case of rented house property is is 30%. proposed to reduce to 20%. As per section 80C certainExempt-Exempt-Taxation (EET) investment/savings upto Rs. 1 lac weremethod of taxation of deductible from taxable income. savings/investment, will be applied on new contribution after commencement of the code. Limit for investment raised to Rs.300000 p.a. However deduction on investment in tax-saving mutual funds and fixed deposits have been abolished. Income from Salary includes allAll such exemption withdrawn. perquisites such as house rent, leave travel assistance, children education allowances, encashment of unavailed earned leave on retirement, medical reimbursement and free/concessional medical treatment paid/provided etc is exempt up to a certain limit.

4/15/12

Positives of DTC

4/15/12

Negatives of DTC

4/15/12

How insurance gets impacted:

4/15/12

How equities investment will be effected:

4/15/12

Impact on Pension Funds:

4/15/12

EFFECT ON TAX LIABILITY DUE TO DTC INCOM

INCOME RS 3,00,000 E RS 8,30,00 0

INCOME RS 15,00,000

4/15/12

EFFECT ON TAX LIABILITY DUE TO DTC

SUPPOSE THE TAXABLE INCOME IS RS 3,00,000 FROM CURRENT TAX SLAB TAX FOR 1ST RS 1,60,000 = NIL TAX FOR NEXT1,40,000= RS 14,000 @ 10 % TOTAL TAX LIABILITY (EXCLUDING EDUCATION CESS @ 3% ) = RS 14,000 4/15/12

NOW, AFTER DTC TAXABLE INCOME = RS 3,00,000 TAX FOR 1ST RS1,60,000 = NIL TAX FOR NEXT RS 1,40,000 = RS 14,000@ 10% TOTAL TAX LIABILITY (EXCLUDING EDUCATION CESS @ 3%) = RS 14,000
4/15/12

SUPPOSE THE TAXABLE INCOME IS RS 8,30,000 FROM CURRENT TAX SLAB TAX FOR 1ST RS 1,60,000 = NIL TAX FOR NEXT3,40,000= RS 34,000 @ 10 % TAX FOR NEXT 3,00,000 = RS 60,000 @ 20%
4/15/12 TAX FOR NEXT 30,000 = RS 9000@

NOW, AFTER DTC TAXABLE INCOME = RS 8,30,000 TAX FOR 1ST RS1,60,000 = NIL TAX FOR NEXT RS 6,70,000 = RS 67000@ 10% TOTAL TAX LIABILITY (EXCLUDING EDUCATION CESS @ 3%) = RS 67,000
4/15/12

SUPPOSE THE TAXABLE INCOME IS RS 10,00,000 FROM CURRENT TAX SLAB TAX FOR 1ST RS 1,60,000 = NIL TAX FOR NEXT3,40,000= RS 34,000 @ 10 % TAX FOR NEXT 3,00,000 = RS 60,000 @ 20%
4/15/12 TAX FOR NEXT 2,00,000 = RS 60,000@

NOW, AFTER DTC TAXABLE INCOME = RS 10,00,000 TAX FOR 1ST RS1,60,000 = NIL TAX FOR NEXT RS 8,40,000 = RS 84,000@ 10% TOTAL TAX LIABILITY (EXCLUDING EDUCATION CESS @ 3%) = RS 84,000
4/15/12

SUPPOSE THE TAXABLE INCOME IS RS 15,00,000 FROM CURRENT TAX SLAB TAX FOR 1ST RS 1,60,000 = NIL TAX FOR NEXT RS 3,40,000= RS 34,000 @ 10 % TAX FOR NEXT RS 3,00,000 = RS 60,000 @ 20%
4/15/12 TAX FOR NEXT RS 7,00,000 = RS

NOW, AFTER DTC TAXABLE INCOME = RS 15,00,000 TAX FOR 1ST RS1,60,000 = NIL TAX FOR NEXT RS 8,40,000 = RS 84000@ 10% TAX FOR NEXT RS 5,00,000 = RS 1,00,000 TOTAL TAX LIABILITY (EXCLUDING 4/15/12 EDUCATION CESS @ 3%) = RS

THANK YOU

4/15/12