Provision

What budget said?

What it finally means?

Banking services

Service tax on ATM operations, maintenance and management

This is not a tax on cash withdrawal from the ATM. The service tax will apply to vendors who are responsible for maintaining the functioning of the machine

Bank deposits

Bank deposits to get benefit under section 80C, but no clarity of interest reinvested.

No clarification.

Capital gains tax saving bonds

Sec. 54EC was diluted with only NHAI and REC bonds being eligible. The budget memorandum specified that this amendment is applicable retrospectively for FY 05-06.

If you earn long-term capital gain, you have basically six months to invest in the bonds. The amendment clarifies that even if you were to book the capital gain in the current year (FY 05-06), but the six months period were to fall in the next financial year, the Bonds issued after 1.4.06 can be used to save tax.

EET

No mention of EET in the budget.

It hasn’t disappeared. Probably, this budget will be the time.

Procuring a TDS Certificate

You would have to approach the respective Income Tax Officer for a TDS certificate and not your employer.

The new law was to come into force from 1-4-2005. But the Government realized that the necessary infrastructure was not yet in place. So, the scheme has been postponed to 1-4-2008.