Indian Income 2007

PERSONAL INCOME TAX

For Individual & H.U.F.
Income	Tax Rates
Rs. 1 upto 1,10,000	Nil
Rs. 1,10,001 upto 1,50,000	10%
Rs. 1,50,001 upto 2,50,000	20%
Rs. 2,50,001 onwards	30%
For Ladies
Rs. 1,45,001 upto 1,50,000	10%
For Senior Citizen
Rs. 1,95,001 upto 2,50,000	20%

10% surcharge on Income above Rs. 10,00,000 & above. Education cess 3% on (Tax + Surcharge).

HIGHLIGHTS OF BUDGET

1. No change in personal or corporate rate of income tax.
2. One-by-six scheme abolished.
3. MAT raised from 7.5 per cent to 10 per cent.
4. STT raised by 25 per cent.
5. Section 80C to cover fixed deposits of 5 years and more with a scheduled bank.
6. Section 80-IA benefit extended till 31-03-2010 for power sector.
7. Changes in section 54EC to restrict it to two institutions, section 10(23G) and 54ED withdrawn.
8. PAN to be made complusory for some more transactions.
9. Value of fringe benefit on tour and travel to be taken as 5 per cent instead of 20 per cent. For hotel boarding and lodging similar reduction is there is some cases. Expenses on brand ambassadors and celebrity endorsements excluded; only a contribution to approved superannuation fund by employer, in excess of Rs. 1 lakh per employee, will attract FBT.

DEDUCTION

• Under Section 80C & 80CC: Deduction upto Rs. One lakh shall be allowed in respect of payment towards Life Insurance Premium, Contribution towards P.F., P.P.F., N.S.C., expenditure on Education of children, Repayment of housing loan & investment in eligible issue of capital & fixed deposits of 5 year & more with a scheduled bank.

• Under Section 80D: Mediclaim insurance upto Rs. 10,000.

• Under Section 80G: General Deduction is 50% of amount Donated to approved institutions.

DEPRECIATION

The general rate of depreciation on plant & machinery is reduced to 15% from 25%, for furniture and fittings to 10% from 15%, for motor cars to 15% from 20%, for motor buses and lorries to 30% from 40%, rubber moulds to 30% from 40% and ships to 20% from 25%. The rate of initial depreciation is increased to 20%.

FRINGE BENEFITS TAX ON COMPAIES (FBT)

• Individual, HUF, Charitable institutions and Trusts are exempted.

• Expenses on advertising have been exempted from FBT.

• 20% chargeable on entertainment, publicity, sales promotion, hotel, boarding and lodging, use of telephone and mobiles, Repair, running and maintenance of vehicles.

• 5% chargeable on tour, travel & hospitality.

• 50% chargeable on Festive celebrations, Gifts, use of club facilities, conference, use of health club, sports and similar facilities and scholarship to the children of employees.

CASH WITHDRAWALS TAX

On Saving Accounts	:	Nil
On Current Account of companies and firms	:	Exempt up to Rs. 1 lac in a single day
On Current Account of individual and HUF	:	Exempt up to Rs. 50,000 in a single day

SERVICE TAX

Service tax rate raised from 12% plus education cess 3%. Small service provides whose gross annual turnover is less than Rs. 8 lacs are exempt from service tax. Few more services are come under the list service tax list.