Floor,Near Gujarat Vidyapith,Off Ashram Road,Ahmedabad
380 014.Tel: + 91 (0) 79 2758 2542Fax: + 91 (0) 79 2758 2551
7th Floor, Lingapur House,Amrutha Estates,HimayathnagarHyderabad
500 029Tel: + 91 (0) 40 2322 2098Fax: + 91 (0) 40 2322 2098
Chandralok,31, Nutan Bharat Society,Alkapuri, Vadodara
390 007Tel: + 91 (0265) 2233 3776Fax: +91 (0265) 2233 9729
Snap shot of the current and proposed income slabs
Amounts in INR
Tax Rate As proposed byFinance Bill, 2009Proposed as perDTC
BasicExemption160,000 *** 160,000***10% 160,001
2,500,00030% > 500,000 > 2,500,000*** INR 190,000 for Resident Female individuals, and INR 240,000 for seniorcitizens.Currently, an education cess of 3% is applicable on the taxes, and hence themaximum marginal rate is 30.90%. The proposed maximum marginal rate is30%.
Residential Status and Scope of Income
Individuals are categorized into Residents and Non-Residents. The definitionsfor Residents and Non-Residents as per existing tax laws are retained.,The current provisions categorise residents into Residents and OrdinarilyResidents (ROR) and Residents but not ordinarily residents (RBNOR). Thisbifurcation has been omitted in the DTC.Residence-
based taxation is applicable to “Residents”
and accordinglyworldwide income is liable to be taxed. Source-based taxation to be applied forNon-Residents.However, Residents would not be taxed on income accrued / received outsideIndia if the income relates to:
the financial year in which the individual ceases to be a non-resident, or
the financial year immediately succeeding such financial year, provided theindividual was a non-resident for nine years immediately preceding thefinancial year in which he ceased to be a non-resident.
Rules for computation of total income
The incomes have broadly been categorized into “Income from ordinarysources” and “Income from special sources”.
Ordinary Sources Special Sourcesincludes
Coverage Employment incomeIncome from house propertyIncome from businessCapital gainsIncome from residuary sources
Interest, dividends, capitalgains etc received by a nonresident on investmentincome,Winnings from lottery,crossword puzzle,gambling received by anyassessee etc.