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FINANCE ACT(NO.2) 2009

Prepared by:Leena Kanjani (08080)

Mehul Rakholiya (08101)

Bhavna Thakker (09112)

Krishna Vyas (08118)

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For the grant of tax exemption previously the

application was to be filled at any time in the

F.Y. for which the tax exemption was needed.

The amendment is the period in which

application is to be filed is extended. For A.Y.

2009-10 & subsequent years, such application isrequired to be made on or before 30th sept., of

the relevant A.Y.

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For this section previously public sectorbank to

mean the SBI, subsidiary bank as defined in the

SBI (subsidiary banks) Act,1959 a correspondingnew bank constituted u/s 3 of banking companies

Act, 1970/1980.

The amendment for this sec. is the public sector

banks include a bank included in the category

other public sector banks by RBI3

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At present income of industrial undertaking from the

export of articles and things or computer software is

exempt.

Under the provision to section 10 A (1) and 10 B(1),

the exemption was available only upto A.Y. 2010-11.

Under the amendment of the set provision to sec. 10A(1) and 10 B(1) the terminal date of exemption is

extended by further 1 assessment year i.e. upto A.Y

2011-12 instead of 2010-11 4

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Electoral Trust: A Trust so approved by Board in

accordance with the scheme made this regard by

the central government

With effects from 1st April 2010 a new section 13

(B) is inserted which says the voluntarycontribution recd by electoral firm in the previous

year shall not be included in total income if:

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a) If 95% of its total income (donation received in

the previous year along with surplus broughtforward from any earlier previous year) is

distributed to any political party registered

under sec. 29A of the Representation of thePeople Act, 1951.

b) Such electoral trust functions and accordancewith the rules made by the Central

Government.

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In view of discontinuous of fringe benefit tax for

A.Y 2010-11 onwards, the value of such specified

FBT & facilities is not chargeable to tax in thehence of employer.

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In section 32 of the Income Tax Act, in sub-

section (1), in explanation 3, for the words the

expression asset and block of asset, the

words the expression asset shall be

substituted with effect from 1st April 2010.

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Section 43(1)

Section 28(vii)

Section 73A

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Previously zero coupon bonds were issued only

by infrastructure capital company (ICC),

infrastructure capital fund (ICF), Public sectorcompany(PSC).

On or after 1/4/09 schedule bank can also issue

zero coupon bonds.

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Condition 1 Remuneration should be paid only to a

working partnerCondition 2 Remuneration must be authorised by the

partnership deed.

Condition 3 Remuneration should not pertain to prior to

partnership deed.Condition 4 Remuneration should not exceed the

permissible limit.

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In case of firm carrying on profession referred to in section 44AA-

a. On the first Rs. 1,00,000 of the

book profit or in the case of a loss

Rs. 50,000 or at the rate of 90% of

the book profit, whichever is moreb. On the next Rs. 1,00,000 of the

book profit

At the rate of 60%

c. On the balance of the book

profit

At the rate of 40%

In the case of any other firm-

a. On the first Rs. 75,000 of the

book profit or in case of a loss

Rs. 50,000 or at the rate of 90% of

the book profit, whichever is more

b. On the next Rs. 75,000 of book

profit

At the rate of 60%

c. On the balance of the book

profit

At the rate of 40%

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In case of a firm carrying on a profession referred to in

section 44AA and also in the case of any other firm -

a. On the first Rs. 3,00,000 of

the book profit or in the caseof a loss

Rs 1,50,000 or at the rate of

90% of the book profit,whichever is more;

b. On the balance of the book

profit

At the rate 0f 60%

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Condition 1 The assessee incurs any expenditure which is

otherwise deductible under the other provision

of the Act for computing business/professionincome. The amount of expenditure exceeds

Rs. 20,000

Condition 2 A payment in respect of the above expenditure

exceeds Rs. 20,000

Condition 3 The payment mentioned in condition two is

made otherwise than by an account payee

cheque or an account payee demand draft .

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Condition 1 The taxpayer be an individual, HUF, AOP, BOI, firm,

company, co-operative society or any other person. He or

it may be a resident or a non resident

Condition 2 Taxpayer is engaged in the business of plying, hiring or

leasing goods carriages.

Condition 3 The taxpayer owns not more than 10 goods carriages at

any time during the previous year. For this purpose, a

taxpayer, who is in possession of a goods carriage,

whether taken on hire purchase or an instalments and for

which the whole or part of the amount payable is still due,

shall be deemed to be the owner of such goods carriage

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Condition 1 The taxpayer be an individual, HUF, AOP,

BOI, firm, company, co-operative society or

any other person. He or it may be aresident or a non resident

Condition 2 The taxpayer is engaged in the business of

retail trade in any goods or merchandise.Condition 3 Total turnover from the above business does

not exceed Rs. 40 lakh

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Condition 1 The taxpayer is an individual

Condition 2 He is employed by the central government

or by any other employer on or after

January 1, 2004

Condition 3 He has in the previous year paid ordeposited any amount in his account under

a pension scheme notified by the central

government.

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Condition 1 The taxpayer is an individual

Condition 2 He is employed by the central government

or by any other employer on or after January

1, 2004 or any other assessee, being anindividual

Condition 3 He has in the previous year paid or

deposited any amount in his account under a

pension scheme notified by the central

government.

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Deduction for an undertaking which develops,

operates or maintains a notified industrial park u/s

80-IA(4)(iii)

Deduction for an undertaking set up in any part of

india for generation or generation and distributionof power u/s 80-IA(4)(iv)(a)

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Deduction for an undertaking which starts

transmission or distribution by laying anetwork of new transmission or distribution

lines u/s 80-IA(4)(iv)(b)

Deduction for an undertaking which

undertakes substantial renovation and

modernization of the existing network of

transmission or distribution lines u/s 80-

IA(4)(iv)(c)

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Deduction for an undertaking carrying on the

business of laying & operating a cross- countrynatural gas distribution network including

pipelines & storage facilities u/s 80-IA(4)(vi).

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An undertaking which begins commercial

production/refining of mineral oil located in

any part of India u/s 80-IB(9)

An undertaking developing and building

housing projects u/s 80-IB(10)

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Conditions

Amount of deduction

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Provision for levy of minimum alternate tax u/s

115JB

Tax credit for tax paid u/s 115JB

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In case of a limited liability partnership

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Liability of partner of limited liability partnership

in liquidation.

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Distinction between contractor and sub contractor are

removed

Tax rates

Presents Proposed

37

Advertisin

g

contracts

Other

contracts

Income-tax Income-

tax

Payment to

contractor

1% 2%

Payment tosub-

1% 1%

Income-

tax

Payment to individual orHUF

1%

Payment to person

other than individual or

HUF

2%

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When tax is not deductible Single payment below 20,000

Aggregate payment during the financial year does not

exceed Rs. 50,000.

No deduction shall be made on a payment to a

contractor during the course of business of plying,

hiring or leasing goods carriages on furnishing of his

PAN to the person paying or crediting such sum.

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Nature of

payment

Present rate Proposed rate

Rent on

machinery or plant

or equipment

10% 2%

Rent on land or

building or

furniture or fitting

Individual or HUF 15% 10%

Other person 20% 10%

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PROCESSING OF STATEMENTS OF

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PROCESSING OF STATEMENTS OF

TDS U/S 200A

Sum deductable shall be computed.

The interest if any shall be computed.

The sum payable by or the amount of refund due to the

deductor shall be determined after adjustment of amountcomputed.

An intimation shall be prepared or generated and sent to

the deductor specifying the sum determined to be

payable by or the amount of refund.

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PAN has a mandatorily furnish by person receiving

payment on which tax is deductible.

Failure to furnish PAN shall result in tax deduction at

higher of the following rate: At the rate specified in the relevant provision of this act or

At the rate or rates in force or

At the rate of twenty percent.

Declaration for nil TDS is valid only if PAN furnish in

the declaration.

certificate for nil or reduced TDS shall not be granted

unless PAN furnish in the application made for such

purpose. 41

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At present it is obligatory to pay advance tax

where the advance tax payable is Rs. 5000 or

more.

But from the assessment year 2010-11 the limit is

increase from Rs. 5,000 to Rs.10,000.

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Presents Proposed

Income slab(INR) Rate Income slab(INR) Rate

Upto 1,50,000 Nil Upto 1,60,000 Nil

1,50,001- 3,00,000 10% 1,60,001- 3,00,000 10%

3,00,001- 5,00,000 20% 3,00,001- 5,00,000 20%

Above 5,00,000 30% Above 5,00,000 30%

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Basic exemption limit for resident women below

65 years is increased from Rs. 1,80,000 to Rs.1,90,000

Basic exemption limit for resident above 65 years

is increased from Rs. 2,25,000 to Rs. 2,40,000.

Surcharge abolished and Education cess continue

at 3%.

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No changes proposed in tax ratesNo change in rates of surcharge and education

cess for corporate tax payers.

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