The direct taxes code (DTC) approved by the Cabinet gives a reprieve to special economic zones, or SEZs, till 2014 from the proposed regime, but has imposed a 20% minimum alternative tax, which is likely to be opposed by the industry. The SEZ developers say the tax regime approved by the Cabinet on Thursday does [...]
Archive for the ‘Direct Tax’ Category
The purpose behind the introduction of provisions relating to MAT (Minimum Alternate Tax; Section 115JB) was to levy some tax on the “Zero Tax Companies“. The government felt a number of companies with huge profits were avoiding payment of income tax by adjusting their profits against allowances permitted under the Income-tax Act. To circumvent this [...]
It is proposed that no disallowance of the expenditure which is subject to TDS provision will be made, if after deduction of tax during the previous year, tax has been paid on or before the due date of filing of return of income. This is effective from Assessment Year 2010-11 onwards
The rate of interest on late deposit of tax deducted has been increased from 12% p.a. to 18% p.a. with effect from July 1, 2010.
Surcharge less Taxing
The cut in surcharge for domestic companies will bring down their overall tax rate by 0.7725%. Not a major reduction, but welcome relief. The cut in surcharge, meant to be a temporary levy, will be phased out once the Direct Taxes Code kicks in.
Hike in MAT creates a ruckus
For companies under the MAT regime, the net increase after accounting for the reduced surcharge will be 2.9355%.
Proposed Amendment, New Provision in Finance Budget 2010-11:
Advance Taxes & TDS u/s 192
Disallowance for non deduction of TDS
Deduction in respect of investment in LT Infra Bonds
Tax Audit Limit
The software industry hit out at the government for increasing the minimum alternate tax and for ignoring the industry’s plea for extending Software Technology Parks of India scheme which would have continued to give tax breaks.
The STPI scheme would have continued to give tax breaks to the their export revenues beyond 2011 onwards.