Subhash Lakhotia, Tax & Investment Consultant, Tax Guru CNBC Awaaz                                                         

In the sphere of Personal Finance, the Budget 2009 -2010 provides for meagre tax concessions, which will reduce small burden of a large number of individual taxpayers of India. But the fact remains that surely the tax burden of all categories of taxpayers whether the individual men or women or the senior citizen will be reduced.

The basic Income tax exemption of Individual taxpayers during the financial year 2009 - 2010 would now be Rs 1,60,000 while the same would be Rs 1,90,000 for women tax payers and Rs 2,40,000 for senior citizens. The impact of tax saving due to this amendment is that both individual men and women would now be able to save income tax ranging from Rs 1000 to Rs 3,000 depending upon their income scale. However, the highest savings would be for senior citizens, ranging from Rs 1500 to Rs 4500.

The 10% surcharge, which for individual taxpayers is applicable on income in excess of Rs 10 lakhs, has been deleted as a result of Budget proposal. There would be tax deduction to individual taxpayers to the extent of 3% of their income specially in case the income exceeds Rs 10 lakhs per annum.

With reference to deduction as per section 80 E of the Income Tax Act, presently the law provides for deduction in respect of specific higher education but now the Budget proposes to extend this deduction to any course for study pursued after passing the senior secondary examination or its equivalent from any School, Board or University recognised by the Central or State Government.

The deduction in respect of maintenance of dependant person with severe disability has been increased to Rs 1,00,000. However there is no change in the limit for non-severe disability dependant.

From the financial year 2010 -2011 a special provision is being proposed for individuals, HUF and partnership firms for computing profits and gains of business on presumptive  basis which will be calculated @ 8 % of total turnover or gross receipts. This would be applicable where the total turnover or gross receipts does not exceed Rs. 40 lakhs.

Partnership firms would now be able to pay higher amount to the partners on account of salary, bonus, commission or remuneration. The new revised limits for deduction for all categories of Partnership firms for this purpose would be Rs 1,50,000 or at the rate of 90% of income on the first Rs 3,00,000 of firms income and 60% on the balance book profit.

Taxpayers should now be very careful with regard to new tax provisions introduced in the finance Bill where deemed capital gains liability would also arise in respect of property transactions entered with power of attorney or agreement to sale transaction. Likewise, the taxpayers should also note that the provisions of tax liability on gift received from non-relatives is also applicable to property transactions namely the immovable property and other property as well.

Now no advance tax is required to be paid if the advance tax payable is upto Rs. 10, 000.The income tax return form no. 2 is proposed to be made “Saral’’. The wealth tax exemption limit has been hiked to Rs. 30 lakhs.

(The author is tax & investment consultant at New Delhi for last over 40 years. He is also Director of M/s R.N. Lakhotia & Associates & The Strategy Group.  E-mail: slakhotia@satyam.net.in)