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Income Tax Amendments by Finance Act, 2011 The following changes have been effected in the Income Tax

Act,1961 by way of Finance Act, 2011 : 1.Rates of Income Tax: Rates under the various categories have changed. INDIVIDUAL (EXCL. WOMEN) BELOW 65 YEARS OF AGE/HUF/AOP/BOI/AJP : Upto 1,60,000 NIL 1,60,001-5,00,000 10%(Total Income – 1,60,000) 5,00,000-8,00,000 34,000 + 20%( Total Income – 5,00,000) Above 8,00,000 94,000 + 30%(Total Income -8,00,000) WOMEN BELOW 65 YEARS OF AGE : Upto 1,90,000 NIL 1,90,001-5,00,000 10% (Total Income – 1,90,000) 5,00,001-8,00,000 31,000 + 20%(Total Income – 5,00,000) Above 8,00,000 91,000 + 30%(Total Income – 8,00,000) INDIVIDUALS AND WOMEN RESIDENT ABOVE 65 YEARS OF AGE Upto 2,40,000 NIL 2,40,001-5,00,000 10%(Total Income – 2,40,000) 5,00,001-8,00,000 26,000 + 20%(Total Income – 5,00,000) Above 8,00,000 86,000 + 30%(Total Income – 8,00,000) CO-OPERATIVE SOCIETY Upto 10,000 10% of Total Income 10,001 – 20,000 1,000 + 20%(Total Income – 10,000) Above 20,000 3,000 + 30% (Total Income – 20,000) FIRM & LOCAL AUTHORITY – Flat 30% DOMESTIC COMPANY – 30% OTHER THAN DOMESTIC COMPANY: (i) on so much of the total income as consists of,— (a) royalties received from Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 31st day of March, 1961 but before the 1st day of April, 1976; or (b) fees for rendering technical services received from Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 29th day of February,1964 but before the 1st day of April, 1976, and where such agreement has, in either case, been approved by the Central Government 50% (ii) on the balance, if any, Income 40%

Rent 194J – Fees for professional or technical services 194LA. Royalties and Technical Service Fees in case of foreign companies 115AB – Tax on income from units purchased in foreign currency or capital gains arising from their transfer.5% b) In the following cases. 1 crore 7. d) In the following cases : 194C – Payments to Contractors 194E – Payments to Non-resident sportsmen or sports associations 194EE – Payments in respect of deposits under National Savings Scheme etc. 115AD –Tax on income of Foreign Institutional Investors from securities or capital gains arising from their transfer 115B – Tax on Profits and Gains of Life Insurance Business 115BB – Tax on winnings from lotteries.5% Other Company Rs.5% Other Company Rs.Payment of compensation on acquisition of certain immovable property 194LB – Income by way of interest from infrastructure debt fund (Newly inserted section) . on the sale of lottery tickets 194H – Commission or brokerage 194-I . a) SURCHARGE : The surcharge leviable is : TOTAL INCOME EXCEEDS RATE OF SURCHARGE ON INCOME TAX Domestic CompanyRs. 115E – Tax on investment income and long-term capital gains 115JB – Special Provision for payment if tax by certain companies (MAT) In the above mentioned cases. 115ACA – Tax on income from Global Depository Receipts purchased in foreign currency or capital gains arising from their transfer. crossword puzzles. the rates of surcharge have been changed: 115A . 1 crore 2. races including horse races.2. 1 crore 7. surcharge leviable is: (CALCULATED AS PER RELEVANT SECTION) TOTAL INCOME EXCEEDS RATE OF SURCHARGE ON INCOME TAX Domestic CompanyRs. 1 crore 2.Tax on Dividends. 115BBA – Tax on non-resident sportsmen or sports associations 115BBC . card games and other games of any sort or gambling or betting of any form or nature whatsoever.5% c) In the following cases: 115O – Tax on distributed profits of domestic companies (dividends by DC) 5% 115R – Tax on distributed income to unit holders 5% The surcharge leviable is 5% on income tax calculated as per relevant section. 115AC – Tax on income from bonds or Global Depository Receipts purchased in foreign currency or capital gains arising from their transfer. 194F – Payments on account of repurchase of units by Mutual Fund or UTI 194G – Commission etc.Anonymous donations to be taxed in certain cases.

115A / 115AB / 115AC / 115ACA / 115AD / 115B / 115BB / 115BBA / 115BBC / 115BBD / 115E / 115JB / 115JC. 161(1A) or u/s. 115JB or u/s. e) Surcharge on TCS u/s. where the income or aggregate of such incomes paid or likely to be paid and subject to the deduction exceeds Rs. 164 or u/s. deducting Income Tax from Income Chargeable under the head ‘Salaries’ and computing ‘Advance tax’ In cases in which income tax has to be charged under any of the following sections: 172(4) : Shipping Business of Non-residents 174(2): Assessments of persons leaving India 174A: Assessment of AOP/BOI/AJP formed for a particular event or purpose 175 : Assessment of persons likely to transfer property to avoid tax 176(2) : Discontinued Business.(for companies other than domestic companies) . Rates for charging Income Tax in certain cases. Sections 115A.t.196B – Income from units 196C – Income from foreign currency bonds or shares of Indian company 196D – Income of Foreign Institutional Investors from securities Here. on such ‘advance tax’ in respect of any income chargeable to tax u/s. 115AD. 206C is now 2% of such tax. 115AC. 115E. 164A or u/s. wherever applicable . 115BB. where the amount or aggregate of such amounts collected and subject to such collection exceeds Rs. 115JB : (CALCULATED AS PER RELEVANT SECTION) TOTAL INCOME EXCEEDS RATE OF SURCHARGE ON ADVANCE TAX Domestic Company Rs. 167B at the rates as specified in the relevant section/chapter or surcharge. 1 crore.) .r. 115ACA. 115BBA. 115AB. 115BBD.115JC or u/s. 1 crore 2% 3. f) Surcharge on Advance Tax computed w. 192 OR Advance Tax payable under Chapter XVII-C [not being advance tax in respect of any income chargeable to tax under Chapter XII or Chapter XII-A or income chargeable to tax u/s. 1 crore. 1 crore 5% Other Company Rs. 115BBC. TDS shall be deducted as per relevant section and surcharge would be leviable @ 2% (only for companies other than domestic companies) of such tax. 115B. OR Deducted from/paid on income chargeable under the head ‘Salaries’ u/s.

001-8.00.000 + 20%(Total Income – 5.001-5. in either case. been approved by the Central Government 50% (ii) on the balance.000) WOMEN BELOW 60 YEARS OF AGE : Upto 1.90.00.000) INDIVIDUALS AND WOMEN RESIDENT ABOVE 60 YEARS OF AGE BUT BELOW 80 Upto 2.50.000 WOMEN) BELOW 60 YEARS OF AGE/HUF/AOP/BOI/AJP : NIL 10%(Total Income – 1.00.1961 but before the 1st day of April.000) 92.00.000 10% (Total Income – 1.00. or (b) fees for rendering technical services received from Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 29th day of February.000) 5.000 Above 8.000 10%(Total Income – 2.001-5.1964 but before the 1st day of April.000 3.000 NIL 5.90. if any.000) INDIVIDUALS AND WOMEN RESIDENT ABOVE 80 YEARS OF AGE Upto 5.000 85.000 1. 1976.000) CO-OPERATIVE SOCIETY Upto 10.000 20%(Total Income – 5.000 31.80.80.00.00.00.000) Above 8. Upto 1.50.000) 32.000) Above 8.001 – 20.000 + 30% (Total Income – 20.shall be charged/deducted/computed at following rates: INDIVIDUAL (EXCL.000) FIRM & LOCAL AUTHORITY – Flat 30% DOMESTIC COMPANY – 30% OTHER THAN DOMESTIC COMPANY: (i) on so much of the total income as consists of— (a) royalties received from Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 31st day of March.000 + 30%(Total Income – 8.50.90.00.000 + 20%( Total Income – 5.000) 5. 1976.00.000 91.000) Above 20.000) Above 8. Income 40% .001-8.000 60.00.00.000 NIL 1.00.000 + 30%(Total Income -8.00. and where such agreement has.000 + 20%(Total Income – 10.000 + 30%(Total Income – 8.001-8.00.80.00.000 25.000 5.00.00.000 10% of Total Income 10.000 + 20%(Total Income – 5.001-8.000 NIL 2.001-5.00.00.00.00.000 + 30%(Total Income – 8.00.00.000 1.

or retention. 1 crore 5% Other Company Rs. the activity of “advancement of any other object of general public utility” is not treated as a charitable purpose. the cases covered under clause (v).10 lakhs. or any activity of rendering any service in relation to any trade. for a cess or fee or any other consideration.The surcharge leviable on above cases as well as on advance tax computed in accordance with provisos to section 111A and 112 is : TOTAL INCOME EXCEEDS RATE OF SURCHARGE ON INCOME TAX Domestic CompanyRs. The above provision of section 2(15) has been amended with retrospective effect from the assessment year 2009-10 to provide that “the advancement of any other object of general public utility” shall continue to be a “charitable purpose” if the total receipts from any activity in the nature of trade. do not exceed Rs. And by this amendment the SC’s ruling in Ishikawajma-Harima Heavy industries Ltd v. 9(1)] – Sec 9(1) is amended to provide that in the case of non-resident. (vi) and (vii) of Sec 9(1) shall be always taxable whether or notThe non-resident has a residence or place of business or business connection in India. 2008 from the assessment year 2009-10. commerce or business. This absolute restriction is applicable on any receipt of commercial nature irrespective of its quantum. Education Cess and Secondary and Higher Education Cess Same as last AY. commerce or business. This absolute restriction was imposed by an amendment made by the Finance Act. Section 2(15) defines “charitable purpose” which among others includes “the advancement of any other object of general public utility”. Amendments at a Glance for May 2011 CA Final Exams (Fin Act 2010) Charitable purpose [Sec. irrespective of the nature of use or application. 10 lakh in the previous year. or The non-resident has rendered services in India. However. commerce or business. if it involves the carrying on of any activity in the nature of trade. Income deemed to accrue or arise in India [Sec. commerce or business. or any activity of rendering service in relation to any trade. 1 crore 2% 4. of the income from such activity. 2(15)] Definition of advancement of any other object of general public utility is amended with retrospective effect from AY 2009-10 to mean that it amounts to charitable purpose where the total receipts from such activity. DIT is completely superseded. etc. Amendment –The existing Explanation to section 9(2) has been substituted (with retrospective effect from the assessment year 1977-78) with a new Explanation to specifically state that the income of a non-resident shall be deemed to accrue or . in the previous year do not exceed Rs.

undertaking research in social science or statistical research.f AY 2006-07.arise in India under clause (v) or clause(vi) or clause (vii) of section 9(1) and shall be included in this total income. The non-resident has rendered services in India. CIT has power to cancel if the registration is granted U/S 12AA. (vi) covers royalty and (vii) covers fees for technical services)] Amendment to section 10 Hitherto. or b. Now a proviso is added that the same shall be applicable w. Sec 10(21) covers only incomes of a scientific research associations notified U/S 35(1)(ii). whether or nota. Amendment of fifth proviso to section 32(1) The concept of proportionate depreciation is now extended to the cases of succession of unlisted / private companies into LLPs. Now. Such apportionment will be done based on the number of days for which the asset is used. Now they can cancel even if the registration is obtained U/S 12A. the word assessee is substituted with the word “UNDERTAKING” only for the AY 2010-11. [Sec 9(1)(v) covers interest. this section is extended in respect of research associations undertaking research in social science or statistical research which is notified U/S 35(1)(iii).r. any income of a scientific research association for the time being approved for the purpose of section 35(1) (ii) is exempt from tax if a few conditions are satisfied. This provision has been amended with effect from the assessment year 2011-12 so as to make it also applicable to a research association which has as its object. X Total turnover of the business . Under the existing provisions of section 10(21). Consequently. The non-resident has a residence or place of business or business connection in India.e. Till now. provided such research association is approved and notified under section 35(1)(iii). Fifth proviso to section 32(1) provides that the aggregate depreciation allowable to the predecessor and successor business entities in case of succession or amalgamation shall not exceed in any previous year the deduction allowable at prescribed rates as if the succession or amalgamation had not taken place and such deduction shall be apportioned between the two entities in the ratio of the number of days for which the assets were used by them. the income of such association shall not be included in its total income from the assessment year 2011-12. New Formula Export turnover of the undertaking Profit of the business of the undertaking in SEZ carried on by the Undertaking Cancellation of registration obtained under section 12A Now the CIT can cancel the registration of a trust which is accorded to it U/S 12AA as well as U/S 12A. Amendment to section 10AA Hitherto.

the aggregate depreciation allowable to the predecessor company and the successor limited liability partnership shall not be exceed. land and financial instruments. Deduction is available in respect of businesses which commenced their operations on or after 1st April 2010. Consequently. new hospitals with minimum 100 patient beds. notified housing projects established any where in India. in any previous year. college or other institutions to be 175% used for scientific research 35(2AA) – Any sum paid to an approved National Laboratory. one can claim weighted deduction. Deduction is available only with regard to capital expenditure other than goodwill. . Further.The reference of conversion of private company/ unlisted public limited company into limited liability company [by satisfying the requirement of section 47(xiiib)] has been inserted in the fifth proviso to section 32(1) with effect from the assessment year 2011-12. or a university or an IIT or specified person for the purpose of approved scientific research program 175% Note – There is no increase in weighted deduction under section 35(1)(iia)/(iii). the depreciation calculated at the prescribed rate as if no succession has taken place. Amendment to section 35 The following amendments have been made to section 35 with effect from the assessment year 2011-12Increase in weighted deduction – Under the existing provision of section 35. The rate of weighted deduction has been increased as given belowSection Weighted deduction From the assessment Year 2011-12 35(2AB) – Expenditure incurred by a company(not being cost of land or building)on approved in-house research and development 200% facility 35(1)(ii) – Contribution to an approved scientific research association that has the object of undertaking scientific research or to an approved university. in case of succession of a private company or unlisted public company by limited liability partnership. the common carrier is clarified to mean as one third in the case of gas and one fourth in the case of petroleum. Investment linked deduction for specified business [Sec 35AD] Now Sec 35AD is extended to new hotels (Minimum two star).

15 lakh.10lakh in the previous year. Now.Amendment to section 35DDA Deduction in respect of VRS is extended to business reorganization cases. 40lakh in the previous year. note that Sec 40a(ia) is applicable for sums covered U/S 193. Disallowance of expenditure on account of non-compliance with TDS provisions [Sec. every person carrying on business is required to get his accounts audited if the total sales. The following amendments have been made to section 43 with effect from the assessment year 2011-12“Actual cost” in the hands of successors limited liability partnership when predecessor company has claimed deduction under section 35AD – The existing provisions contained in the Explanation 13 to section 43(1) provide that “actual cost” of an asset in respect of which the deduction is allowed or allowable to assessee under section 35AD will be treated as nil. turnover or gross receipts in business exceed Rs.15 lakhs for profession] Under the existing provision of section 44AB.60 lakhs] For the purpose of presumptive taxation under section 44AD. 194C. 40lakh to Rs. 60lakh and from Rs. the same shall be allowed in the hands of LLP from the year in which business reorganization takes place provided the conditions of Sec 47(xiiib) are satisfied. 194J Amendment to section 43 Hitherto. is taken as Nil if in respect of the same. 194I. 40 lakhs to Rs.60 lakhs for business and Rs. 10lakh to Rs. a person carrying on profession is required to get his accounts audited if the gross receipts in profession exceed Rs. [i. similar rule is extended even with regard to conversion of unlisted public company or private company to an LLP.60lakh with effect from the assessment year 2011-12 . the COA of a 35AD asset to an amalgamated company etc. In the case where unlisted company or private limited company is converted into LLP. the amalgamating company has claimed deduction. Amendment to section 44AB – Limit of turnover increased [New limits are Rs. Also. These monetary limits have been increased (with effect from the assessment year 2011-12) from Rs. 40(a)(ia)] Earlier in respect of certain payments to residents.e March) and deposited by 31st March of the previous year in respect of all other payments. Amendment to section 44AD – Threshold limit of turnover increased [From Rs.e as per the new provisions. expenditure is allowable if the necessary TDS is deposited before the due date of return where TDS is done in the last month (i.40lakh to Rs. 194H. the threshold limit of total turnover or gross receipts will be increased from Rs. 194A. TDS is to be deducted by 31st March of the previous year where as the remittance is to be effected before the due date of the return to claim the related expenditure]. Now relaxation is provided with regard to payments by providing that they can be remitted before the due date of filing the return of income. Likewise.

. mineral oil [Sec 44BB and 44DA] There is a small overlap over Sec 44BB and Sec 44DA when a non-resident having PE provides services etc. etc. Also. it is settled that first we need to check whether it is a case falling U/S 44DA. capital gains will be taxed after taking into account the taxed amount U/S 56(2)(vii) as COA.Income of a non-resident providing services or facilities in connection with prospecting for. Receipt of bullion for nil consideration or for inadequate consideration shall be taxable w. Also.]. Receipt of property in kind is taxable only if it is a capital asset in the hands of the recipient.e received with nil consideration]. certain other sections are amended viz.f 1st June 2010. Amendment to section 49 Cost of asset in the hands a LLP (new entity created now) = Cost in the hands of private company or unlisted company (old entities prior to conversion) Similarly cost (i. the shareholders as well as the company are liable for capital gains tax in the year in which violation takes place.115JB credit shall be allowed only to the company and hence LLP is not allowed the same. the unabsorbed depreciation and losses of the company shall be allowed in the hands of the LLP. in relation to prospecting of mineral oil in India. Once the NR is having PE in India. The cost to the partners and the cost to the LLP of capital assets shall be the same which was in the hands of the old share holders and in the hands of the firm. the period of holding in old entities shall not be considered to determine the nature of capital gains. Further. the shareholders’ stake shall not be diluted for a period of 5 years from conversion and also they cannot withdraw the past profits for a period of 3 years from conversion. Where any gifted property U/S 56(2)(vii) is subsequently sold.e dilution in voting power at anytime in 5 years or withdrawal of profits in a period of 3 years). This provision is now extended to Sec 56(2)(viia) Taxation of certain transactions without consideration or for inadequate consideration [Sec 56(2)] Immovable property received by an individual / HUF will be taxable U/S 56(2)(vii) only if it is received absolutely free of cost. or extraction or production of. always income shall be computed as per the provisions of Sec 44DA. Shareholders of old company shall not receive any other consideration other than the capital. The remaining depreciation loss only shall be allowed in the hands of the LLP. [i. the balance unabsorbed loss shall be carried forward for a fresh period of 8 years. Else. When these conditions are violated (i.e. [All assets and lia of company shall become assets and lia of the LLP. Now. .. Capital gain exemption in the case of conversion of an unlisted company into a LLP [Sec 47(xiiib)] and amendment of Sec 47A Clause 47(iiib) exempts conversion of an unlisted public company or a private company into LLP provided it satisfies the requirements of Sec 56 and 57 of the LLP Act and certain additional conditions under the IT Act. it is covered as per the provisions Sec 44BB.e cost of rights in LLP) in the hands of share holder in the LLP = Cost of shares in private company or unlisted company However.

Amendment to section 80A Once an assessee claims deduction U/S 80HH to 80RRB in respect of a notified business notified U/S 35AD.1 lakh under section 80C. the losses shall be allowable for fresh 8 years.E.20.Receipt of shares by a firm or by a closely held company w.an individual or a Hindu undivided family can claim a deduction of the whole of the amount paid or deposited during the previous year 2010-11 as subscription to a notified long-term infrastructure bonds.e. Deduction in respect of subscription to long-term infrastructure bonds [Sec. This deduction will be over and above the existing overall limit of deduction on saving of upto Rs.Under this section . CCD.This sub-section provides that where a deduction under any provision of section 80HH to 80 RRB is claimed and allowed in respect of profits of any of the specified business referred to in section 35AD(8)(c) for any assessment year. no deduction shall be allowed under the provisions of section 35AD in relation to such specified business for the same or any other assessment year.1 lakh available U/S 80-C. he can contribute and claim this deduction only in respect of premium on his family (other than parents). he can never claim deduction U/S 35AD not only with regard to that year but also in respect of all future years. [i.F AY 2011-12] A new section (7) has been inserted in section 80A with effect from the assessment year 2011-12. Amendment to section 80GGA Now donors who donate sums to research associations recognized U/S 35(1)(iii) for carrying on research in social sciences and statistical research are also eligible for claiming deduction U/S 80GGA. [Available only for the AY 2011-12] Section 80CCF has been introduced for the assessment year 2011-12. depreciation shall be allowable without any time limit and speculation losses shall not be eligible to be carried forwarded. 80CCC and 80CCD.20. Earlier this section is available to donors donating to recognized universities. colleges and institutions U/S 35(1)(iii) .000 in addition to the limit of Rs. And where the conditions of Sec 47(xiiib) are violated at a later year.000. [W.e gift element of nil consideration and gift element in transactions of inadequate consideration are to be considered separately] Amendment to section 72A Where a private ltd company or unlisted public company is converted into LLP by satisfying the conditions laid down in Sec 47(xiiib). CCC. HUF in respect of subscription to long term infrastructure bonds of additional amount of Rs. Deduction under this section will be available only for the assessment year 2011-12 and the quantum of deduction cannot exceed Rs. However.f 1st June 2010 for nil consideration or for inadequate consideration considered separately. Amendment to section 80D Sec 80D deduction is extended in respect of an individual when he contributed to Central Government Health Scheme. 80CCF] Special deduction U/S 80CCF to individuals. then the previously allowed loss shall be treated as income of the LLP in the year in which conditions are violated.

Amendment in the scheme of section 80-IB(10) pertaining to housing projects Deduction U/S 80-IB(10) with respect to housing projects is amended to provide that the construction is to be completed within 5 years from the end of the year in which housing project is approved by the local authority if such approval is granted on or after 1st April 2005. Section 80-ID provides for 100 per cent deduction for 5 years. owning and operating a convention centre located in NCR.1 crore).9305 per cent of book profit (if book profit exceeds Rs. [Applicable w. This rule will be applicable whether or not convention takes place by satisfying the requirement of section 47(xiiib). from the present March 31. of profits derived by an undertaking from the business of a two-star.115JAA] The erstwhile private companies / unlisted public companies which are converted into LLPs are not eligible for the MAT Credit U/S 115JAA which is available to company assessee. 2010. available only if such hotel has started functioning or such convention centre is constructed during the period April 1. Carry forward of MAT credit [Sec. The existing provision contained in section 115JAA provides that where any extra amount of tax is paid because of the MAT provisions under section 115JB. however. 2007 and March 31.e. 2010 to July 31. relaxation is given with regard to built up area for shops and commercial establishments by increasing the limit to 3% of total built up area of the housing project or 5000 sq ft whichever is higher. MAT rate has been increased from 15 per cent to 18 per cent with effect from the assessment year 20011-12. Amendment to section 139 Return U/S 139(4C) is extended to research associations carrying on research in social science or statistical science also. To provide some more time for these facilities to be set up.f 1st April 2010] Amendment in section 80-ID pertaining to profits of a hotel or convention center in NCR Deduction U/S 80-ID is available in respect of hotels and convention centers in specified areas viz. the effective MAT rate will be 18. Gautam Budh Nagar and Ghaziabad]. Deduction is. 2010. Also. .54 per cent of book profit (if book does not exceed Rs. Gurgaon. Rate of minimum alternate tax under section 115JB-Done The base rate for MAT is increased from 15% to 18%. [National Capital Territory of Delhi and districts of Faridabad. three-star or four-star category hotel or from the business of building. The above scheme of section 115JAA has been amended with effect from the assessment year 2011-12 to provide that carry forward under the said section shall not apply to a limited liability partnership which has been converted from a private company or unlisted public company. credit in respect of such extra tax shall be allowed to the company in next 10 years in accordance with the provisions of section 115JAA. The time limit for completion of construction is extended from 31st March 2010 to 31st July 2010. the above provision has been modified to extend the date by which the hotel has to start functioning or the convention center has to be constructed. 1 crore) or 19. For the assessment year 20011-12.

The above provision has been amended with effect from July 1. Centralized processing of returns Time limit for issuing notification to do centralized processing of returns is extended up to 31st March 2011 from the existing time limit of 31st March 2010. 69A. jewellery.194H.000 75. applicable only if the total income in respect of such scientific research association (without giving effect to provisions of section 10) exceeds the maximum amount which is not chargeable to income-tax. This provision is.Under the existing provisions contained in section 139(4C). A similar amendment is made in section 115WE.194-I and 194J have been increased as given in the table below with effect from July 1.000 194C 194C Payment to contractors 20. [Sec 143(1B)] Under the existing provisions of section 143(1B).000 . every scientific research association [referred to in section 10(21)]. 2011. the Central Government may. 69B is now extended to the gifts covered U/S 56(2). Threshold limit for TDS purposes Threshold limits for payments mentioned in sections 194B. etc. such a notification can be issued up to March 31.000 (consideration for single contract) Payment to contractors 50. 2010 to March 31. 194B Winning from lottery or 5. shall furnish a return of income of the previous year. However..000 10. 2010 Rs.000 crossword puzzle 194BB Winning from horse race 2.000 30. Rs.194D. the Assessing Officer may require the Valuation Officer to make an estimate of such value and report the same to him. 2010 June 30. 2010. for the purposes of giving effect to the scheme of centralized processing of returns U/S 143(1A) issue a notification relating to such processing of returns. referred to in sections 69. 69A. Section 139(4C) has been amended from the assessment year 2011-12 in order to require a research association having as its object undertaking research in social science or statistical research to also furnish its return of income. 2010 – Section Nature of payment Existing limit New limit applicable applicable up to from July 1 .69B is required for the purpose making an assessment or re-assessment. Amendment to section 142A relating to estimate by Valuation Officer in certain cases Provisions relating to reference to valuation officer U/S 142A for valuing the property referred in Sec 69. The existing provisions contained in section 142A(1) provide that where an estimate of the value of any investment. The above provisions has been amended to extend the time-limit for issue of such notification under section 143(1B) from March 31.194C. bullion.500 5. however. 2010 so as to also enable the Assessing Officer to make reference to the Valuation Officer for making an estimate of fair market value of any property referred to in section 56(2).194BB.

or technical services Changes in TDS rates – There is no change in TDS rates SURCHARGE EDUCATION CESS.000 services.500 1. Amendment to section 201 Interest leviable for TDS defaults is amended.1 Crore. However. interest shall continue to be @ 1% p.m or part of the month.5 percent From the date on which tax was actually deducted to the date on which tax is actually paid Certificate of TDS and TCS Now TDS / TCS certificates are once again need to be furnished by the deductor / collector to the deductee / collectee The existing provisions of section 203(3) dispense with the requirement of furnishing of TDS certificates by the deductor to the deductee after March .(aggregate consideration for all contracts during the financial year) 194D 194H 194-I 194J Insurance commission Commission / Brokerage Rent 5.000 5. if a persons fails to deduct tax at source or after deduction fails to deposit TDS. Surcharge is applicable on TDS rates only if it is a foreign company and when the payment or credit which is subject to TDS exceeds Rs.000 30.000 Fees for professional 20. For the default in remittance of TDS. Such interest shall be paid before furnishing quarterly return.000 2. these are applicable as follows – Education Cess on TDS is applicable in the case of residents only on salaries. 2010 as follows – Rate of interest (p.m or part of Period for which interest is month) payable 1 percent From the date on which tax was deductible to the date on which tax is actually deducted 1. ETC.80.000 1. interest shall be charged @ 1. the same is applicable on all type of payments to non-residents. IN THE CASE OF TDS –For the financial year 2010-11.5% per month or part of the month. The aforesaid provisions has been amended with effect from July 1. For the default in deduction of TDS.20.000 20. Under the existing provisions of section 201(1a). he is liable to pay simple interest at 1 per cent per month (or part thereof) on the amount of such tax from the date on which such tax was deductible to the date on which such tax is actually paid.

one can go to Settlement Commission in search cases also The additional income tax payable is raised from Rs.Similarly. or Rs. Document Identification Number DIN requirements have been extended from 1st Oct 2010 to 1st July 2011. the above provision have been deleted .3 lacs to Rs. [Earlier the time limit was 12 months] The following amendment have been made – Consequential amendment on similar lines are made in section 22D of the Wealthtax Act Power of the High Court to condone to delay in filing of appeals The High Court can condone the delay in filing of appeals even after 120 days from the date of receipt of the order by the assessee or the Commissioner if it is satisfied that there was sufficient cause for not filing appeal. shall be accepted only after allotting and quoting of a computer general Document Identification Number.50 lacs Now.2010. This provision has been amended so as to provide that DIN will be required to be issued on or after 1st July 2011. it is provided that only realized gains on investments alone shall be taxed.2010. turnover. order.5 lakh with effect from the assessment year 2011-12. the realized as well as unrealized gains on investments used to be taxed by virtue of the amendment brought by the Finance Act.5% of turnover or Rs 1.2010. . whichever is less . It also provides that every document. Settlement commission Now. Section 282B (Allotment of Document Identification Number) was inserted by the Finance (No.2010.1.This monetary limit of Rs. etc.under section 206C(5).5 percent of the total sales. Now. Section 271B The penalty for tax audit U/S 44AB is now 0. letter correspondence received by an income-tax authority or on behalf of such authority.1 lakh. 10 lacs in normal cases and in the case of search the same shall be Rs.F AY 2011-12 Section 271B provides that if any person fails to get his accounts audited or furnish a report of such audit as required under section 44AB.31. the Assessing Officer may impose a penalty equal to 0. a collector of tax at source will also not be required to issues TCS certificate to the person from whom tax has been collected after March 31. 2009.Under this provision. the settlement Commission shall complete the assessment in 18 months from the end of the month in which application is made.5 lacs whichever is less W. letter or any correspondence to any other income-tax authority or assessee or any other person and such number shall be quoted there on. Taxation of income of non-life insurance business In the case of Non-Life Insurance Businesses. Considered the fact that the TDS/TCS certificate constitutes an important document for the deductee /collectee. the deductor /collector will continue to furnish TDS/TCS certificates to the deductee/collectee even after March 31.2)Act 2009 with effect from October 1..1 lakh has been increased to Rs.Consequently. an income-tax authority is required to allot a computer generated Document Identification Number before the issue of every notice.E.

See: Changed Threshold Limit of TDS w. 194-I and 194J . 2011-12 Most of the readers are muddled since of past amendment of TDS like. etc. 194C. Threshold Limit of TDS Changed In order to adjust the inflation and also to reduce the compliance burden of deductors and taxpayers. UTN. 18/02/2010′ makes ‘UTN/24C/’ dead.PreliminarySchedule FIRST SCHEDULE Chapter II .Amendment of section 2 4 . 194H.Direct Taxes3 . But don’t be confused over it. Read the below composition cautiously to know the most recent applicable rules of TDS Procedures. 24C and changes in TDS Returns. forget ‘UTN/24C now’ and download ‘form 16/Form 16A’ in excel and PDF format. The amendment is applicable with effect from July 1. If you have received any notice under this section. 194D.e. In other words if deductee will not provide PAN number on date of TDS deduct. UTN/24C has dead The latest ‘Notification no.Rates of Income-tax2 .Income-tax Chapter III . See “20% TDS if NO PAN” and “NO PAN means More Pain” to know more. 194BB. 2010.f. 2010 (subject to approval of Finance bill). It will all be done under section 201(1) of the income tax act. So don’t be confused over it. Now the Procedure and the forms ‘Form 16/16A’ of TDS will be same as earlier. 20% TDS without PAN: The most significant amendment is “20% TDS without PAN”.Summary of TDS Amendments Applicable for A. it is proposed to raise the threshold limit for payments mentioned in sections 194B. deductor will deduct TDS @ 20% with effect from April 1. you must peruse this article and ask your question here to eliminate your confusion in this regard Chapter I . Notices to deductors u/s 201(1) IT Department will now issue the notice to the deductors who has paid short payment of TDS and interest. 9/2010 dt.Y.Amendment of section 10 . 1/07/2010.

Amendment of section 36 8 .Amendment of section 22D of Act 27 of 1957 .Amendment of section 153B 28 .Amendment of section 80CCF 11 .Amendment of section 131 23 .Amendment of section 80-IA 12 .Amendment of section 245D 31 .Amendment of section 245C 30 .Amendment of section 40A 9 .Insertion of new Chapter XII-BA 20 .Amendment of section 35AD 7 .Insertion of new section 194LB 29 .Amendment of section 133 24 .Amendment of Fourth Schedule 35 .Amendment of section 80CCE 10 .Amendment of section 80-IB 13 .Amendment of section 115JB 19 .Amendment of section 115A 17 .Amendment of section 92CA 15 .Insertion of new section 115BBD 18 .Amendment of section 35 6 .Amendment of section 115R 22 .Amendment of section 139 25 .Amendment of section 296 34 .Amendment of section 143 26 .Omission of section 282B 32 .5 .Insertion of new section 94A 16 .Amendment of section 153 27 .Insertion of new section 285 33 .Amendment of section 115-O 21 .Amendment of section 92C 14 .