Impact of Budget'10 on Salaried people

Dear All,

I have compiled some FAQ's on impact of Budget'2010 on salaried people.

Question: Has Gratuity exemption limit raised in the Budget from Rs 3.50 lakh as was widely predicted ?
Answer: No.

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Question: The budget speaks about audit for Professional income beyond 15lakhs. Is this something existing already or newly introduced? Who fall into this Professional category?
Answers, Actually, earlier one needed to audit one's income if it crossed Rs 10 lakh. Now it is required only if it crosses Rs 15 lakh.

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Question : My CTC is 60 Lacs so now what will be my tax
Answer: You are likely to save in excess of Rs 50K pa. One would need to try and understand components and see if there is any further tax saving opportunities, but because of the budget, you are likely to save about Rs 50 k in taxes for the year.

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Question :My salary is 6 lakh including Rs. 9000 as HRA, I am paying Rs. 9000 as rent and getting Rent Receipt, and also investing Rs. 100000 u/s 80, now what will be my benifits in new budget
Answer: On account of the lower tax slabs , you are likely to save around 20K in taxes.

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Question: Hi, My Annual Income is 8.5 and taxable income say 6.5, how it will affect me
Answer you will save in excess of 30K of taxes.

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Question: What are your views on the current tax policies. Don't you feel that govt. has ignored the lower class and middle class ppl who earn about 3-5 lac p.a. Because govt could have easily exempted taxes for the 0-3 lac Rs. and 10% for 3-5 lac Rs. and so on. This is because the standard of living has increased drastically and 3lac is not what 3 lacs used to be 5 years ago.
Answer: Yes.. there is no benefit for those below Rs 3 lakh.. however keep in mind that one is already at the lowest tax bracket of 10%. Yes, increase in tax slabs could have helped especially considering the inflation rates.

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Question : My sal is 8L P.A, how much tax will I have to pay considering I invest up to the ceiling of all the sections
Answer: There could be some difference between your salary stack and your taxable income due to exemptions of some components. If your taxable income is Rs 8 lakh, then you will pay 96K of tax instead of 1.48 lakh for the year subsequent to this change. The budget will be very beneficial for you.

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Question : I m having a home loan on flat under construction & will be completed in Jun-2010. Will i get Income-Tax rebate on Interest Part.
Answer: Tax benefit starts only after occupation of the property. So you can get a benefit from financial year 2010 -2011.

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Question ... do u think gov will remove the tax benefit to Home Loan EMI ?
Answer: As per the new tax code this could happen, though I believe that the govt will hesitate to remove a deduction as this could impact growth in the economy. Spending in housing and infrastructure benefits several other sectors and employment as well. We will have to wait and watch.

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Question : How can this budget help a salaried person but not working in IT sector or in Government sector, whose income is only 1.8lac?
Answer : For a person in this income range, the tax payable will be the same as last year. Those with income above Rs 3 lakhs will benefit from the increase in the 10% tax slab

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Question : I want to know about the addition of 10 K investment in Infrastructure Bonds.
Answer : Additional deduction is 20K. This is for infrastructure bonds. It is likely to be like a fixed deposit for fixed tenure. We will have to await launch of these bonds to assess the interest rates that one would get.

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Question : is there a way of claiming tac deduction under section 80GG? How can I avail of this tax benefit?
Answer: This section is for a non-salaried person or a salaried person who is not getting house rent allowance. One can claim the deduction for the rent one pays to the extent of the least of the following: (i)Rent paid in excess of 10% of total income. (ii) 25 per cent of total income. (iii) Rs 2,000 per month. The total income of the individual is computed after reducing the amount deductible under other sections, receipts exempt from tax, and long-term & short-term capital gains taxable at concessional rates. Deduction is even not allowned, if the assessee owns a house in any other place, and the concession of self-occupied house is claimed by him.

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Question: I am getting Rs 22000.00 per month as HRA what kind of rebate is expected as this is being acconted as perks and included in my income
Answer: HRA exemption will be to the extent of the minimum of 3 conditions - (i)the HRA component (ii) 40% of basic (50% of basic in 4 metros) (iii) Rent paid - 10% of basic. The rest will come in as taxable income.

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Question : right now my package is 5.85 LACS PA, if i invest and utilize all 80CC then what will be my income? How much i can get more compared to prev year? Thanks in advance!
Answer: It would depend on the salary components. It is likely that your taxable income comes to about Rs 5 lakh. I am assuming you will claim exemptions like HRA, conveyance, food coupons, etc to the extent of Rs 85K. In that case, your tax as per the new slab is likely 35K for the year after the budget Vs 55.6K before the change. This results in a decent saving of about 20K because of the budget change.

Question: does the new tax slabs will be applicabal from this year? Answer: Next financial year. Question : MY CTC is 6.5. I am taking full benefit of 80 C and House loan exemtion. other than this i have medical allowance of 15000 so what will be my tax after and before budget. Thanks in advacne. Answer : You are likely to save around 20K in taxes for the year. Question : Hi my gross salary is 9.2 lakhs and taxable income is 6.75 lakhs. can you tell me aproximately how tax can i save? Answer: closer to 40K will be the savings

Question :There has been an announcement by FM about 80 C Exemptions available for additional 20 K in addition to current 100k, Is there any restriction on where this investment can be Answer: Only in infrastructure bonds. Question : does the new tax slabs will be applicabal from this year? Answer: Next financial year. Question.. MY CTC is 6.5. I am taking full benefit of 80 C and House loan exemtion. other than this i have medical allowance of 15000 so what will be my tax after and before budget. Thanks in advacne. Answer" You are likely to save around 20K in taxes for the year.

Question: I left the previous Employer in Aug-09 & joined new one. How should i evaluate my Income-Tax at the time of filing Saral-Form (when i will have two Form-16), if any part of Income Tax not paid, then what is the time limit to pay extra Income Tax. both Form-16s will be recieved after mar-10. Answer: Each company will give a separate form 16 and when you club this together there will be a double count of deductions and exemptions and hence tax is likely to go up. You will need to make an estimate before march end and pay advance tax on the same. Interest will be charged right from the current financial year. Question : dont you think we should get tax rebate in personal loans also? one more thing for equity related mutual fund if we keep more than year we should get tax benifit of the same Answer: Only home loans have a benefit since the govt is trying to encourage spending on the sector as it has a positive impact on the economy. Tax benefits are only available on ELSS funds and not any other equity MFs. Question: CAN I GET 80 G DEDUCTION 4 PURPOSE OF MY TDS FROM MY EMPOLYER Answer: No. One needs to separately claim Question: There has been an announcement by FM about 80 C Exemptions available for additional 20 K in addition to current 100k, Is there any restriction on where this investment can be Answer: Only in infrastructure bonds. Question: does the new tax slabs will be applicabal from this year? Answer: Next financial year.

Question: , please could you provide the details about Service Tax rule for under construction property, How it will work?
Answer: There have been a lot of questions on service tax. The same is payable by the contractor and not by you. However, the contractor is likely to recover the same from the builder. The tax is not on the full property, but only to the extent of the contract. Costs are likely to be higher by about 3-5% on an average and depends on how much of the building is contracted. I hope this clarifies to queries of all persons in this regard.

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Question : I left the previous Employer in Aug-09 & joined new one. How should i evaluate my Income-Tax at the time of filing Saral-Form (when i will have two Form-16), if any part of Income Tax not paid, then what is the time limit to pay extra Income Tax. both Form-16s will be recieved after mar-10.
Answer: Each company will give a separate form 16 and when you club this together there will be a double count of deductions and exemptions and hence tax is likely to go up. You will need to make an estimate before march end and pay advance tax on the same. Interest will be charged right from the current financial year.

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Question :dont you think we should get tax rebate in personal loans also? one more thing for equity related mutual fund if we keep more than year we should get tax benifit of the same
Answer: Only home loans have a benefit since the govt is trying to encourage spending on the sector as it has a positive impact on the economy. Tax benefits are only available on ELSS funds and not any other equity MFs.

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BHARTI asked, CAN I GET 80 G DEDUCTION 4 PURPOSE OF MY TDS FROM MY EMPOLYER
Answers, No. One needs to separately claim