HIKE INCOME TAX EXEMPTION LIMIT UP TO 5 LAKH/ANNUM-TRADE UNIONS DEMANDED IN PRE BUDGET MEETING

Unions pitch for hiking I-T exemption limit to Rs 5 lakh/annum

Trade unions today demanded 12% interest on PF contributions of employees and a hike in income tax exemption limit to Rs 5 lakh in their pre-budget meeting with Finance Minister P Chidambaram.

The unions have also asked the government not to raise FDI cap in financial sectors like insurance and banking.

 The I-T exemption limit for individuals stands at Rs 2 lakh per annum at present.

Several unions, including CITU, AITUC, INTUC and BMS, in a joint memorandum to Chidambaram have expressed their opposition to the banking reforms bill saying it would encourage private banking at the cost of public sector banks.

They also demanded that a progressive taxation system be put into place and concrete steps be taken to recover large accumulated tax arrears, effective measures to unearth huge accumulation of black money, including the unaccounted money in tax heavens abroad.

Chidambaram, while making his opening remark at the meeting with the representatives of 12 trade unions, said that a slowdown in the manufacturing sector is creating unemployment and there is a need to create job opportunities.

"There is a need to revive investment in manufacturing and service sector in order to create higher job opportunities," he said, adding that there was a slowdown in investment in manufacturing sector as a result not enough jobs were created.

"At present, the economy is passing through a difficult phase mainly due to external factors and, therefore, there is immediate need to tide over the current situation and then move to the path of higher growth," he added.

 Finance Minister Shri P. Chidambaram said that higher growth leads to creation of more jobs. "Trade unions can play an important role in reviving the manufacturing sector which in turn can lead to creation of more job opportunities in the sector," he said.

 Other proposals made in the joint memorandum include taking effective measures to arrest the spiraling price rise, ban speculative forward trading in commodities, massive investment in the infrastructure to stimulate the economy.

The trade unions also sought minimum wage be guaranteed to all workers, special allocation for creation of a Welfare Fund for protecting the interest of unorganised workers and raising minimum wages to Rs 10,000 per month.

Times guide to income tax

Saturday, March 17, 2012Times guide to income tax


Proposal: The basic threshold limit for income-tax has been revised upwards marginally for individual taxpayers (except senior citizens) from Rs 1,80,000 to Rs 2,00,000.

Impact: This will result in a tax savings for Rs 2,060 (Rs 1,030 for women) across the board. Those having taxable income up to Rs 2,00,000 are out of income-tax ambit.

Proposal: While the tax slab rates (10% /20%/ 30%) remain the same, the trigger for the top tax slab (30%) has been raised from Rs 8,00,000 to Rs 10,00,000.

Impact: This will result in a tax saving of upto Rs 20,600 (in addition to Rs 1,030/ Rs 2,030) for persons having income above Rs 8,00,000.

Upper limit of Income Tax Exemption towards Interest on Housing Loan likely to be raised to Rs.3 lakh

An individual who is liable to pay income tax is presently granted a deduction of up to Rs. 1.5 lakh from the salary income for the interest paid on Housing Loan taken for self occupied housing property in an assessment year.

As per media reports on expected changes in Income tax regulations in the ensuing budget 2012, the present limit of Rs. 1.5 lakh for housing loan interest may be raised to Rs. 3 lakhs.

The Economic Times reports as follows

In a bid to boost housing sector credit, the government is contemplating to enhance income tax exemption for up to Rs 3 lakh paid as interest on housing loans in a year, from the existing limit of Rs 1.5 lakh.

The government is considering to raise the tax deduction limit for housing loan in the coming Budget, sources said The Budget is scheduled to be tabled on March 16. At present, a deduction of up to Rs 1.5 lakh is available from taxable income towards interest on loan taken for house. Besides, borrowers can enjoy exemption on payment of principal amount. However, it is part of exemption to savings capped at Rs 1 lakh per annum.

With the property prices and interest rates rising with each passing year, there is need to revise the limit, sources said.

In order to arrest the declining growth rate, the industry associations have demanded raising the tax limit ceiling for the housing loan.

According to Ficci Secretary General Rajiv Kumar the exemption should be harmonised with the rising interest rates and increased to at least Rs 2.5 lakh.

“We recommended that the existing tax deduction limit on income tax of an individual should be increased from the current level of Rs 2.5 lakh to at least Rs 5 lakh,” CII Director General Chandrajit Banerjee.

Of this, Rs 3 lakh should be towards interest payment to offset the impact of high interest rates, he said, adding the remaining Rs 2 lakh should be exclusively towards principal loan repayment as the present limit of Rs 1 lakh is already overcrowded with several other items.

Echoing views, Assocham and PHD chamber said that exemption limit need to be raised both for interest and principal.

As per the Direct Taxes Code, which would replace the decades old Income Tax Act, there is income tax exemption for up to Rs 1.5 lakh paid as interest on housing loans in a year.

Source: The Economic Times

Exempt income up to Rs 3 lakh from I-T: Parliamentary panel

Exempt income up to Rs 3 lakh from I-T: Parliamentary panel
The skewed personal income tax collection pattern of the government has prompted the Parliamentary Standing Committee on Finance to suggest moderately higher taxes for those who earn more and greater relief for small taxpayers. In fact, it has suggested that the tax should kick in only at annual income levels of Rs 3 lakh and more.

According to latest data collected by the Income Tax department, of the 300 million taxpayers in the country, just 1,85,000 individuals earn over Rs 20 lakh a year. But this small group pays Rs 53,170 crore in personal income tax. The broad categorisation of tax payers shows that individuals in Rs 0-10 lakh comprise almost 92 per cent of the total taxpayer base, but they contribute only Rs 21,094 crore, less than 40 per cent of the amount collected as taxes from the small group earning over Rs 20 lakh a year. The tax payers within the income slab of Rs 10-20 lakh per annum — 3.35 lakh tax payers — paid Rs 10,185 crore to the government, the data showed.

Income Tax Bonanza for Salaried People FY-2012-13

government is planning to enhance tax slabsof salaried class persons.


According to reports, Union Finance Minister Sh. Pranab Mukherjee may announce the income tax slab rates soon. The basic tax exemption may increase from 1.8 lakh to 2 lakh. Further the income between Rs. 2-5 lakh will be taxed at 10 percent, Rs. 5-10 Lakh be taxed at 20 percent and income above Rs. 10 Lakh will be taxed at 30 percent rate.

The present tax structure is that incomes between Rs 1.8 lakh and Rs 5 lakh are taxed 10 percent, those between Rs 5-8 lakh taxed 20 percent while 30 percent tax is slapped on incomes above Rs 8 lakh.





Source : tkbsen.com

No Tax Return upto 5 lakhs

'People earning up to Rs 5 lakh need not file IT return'

New Delhi, May 31 (PTI) As many as 85 lakh salaried tax payers with an annual income of up to Rs 5 lakh will not have to file income-tax return from now onwards, a finance ministry official said.

"No income-tax returns would be required for salaried persons earning up to Rs 5 lakh per annum. We would notify this in first week of June," outgoing Chairman of Central Board of Direct Taxes Sudhir Chandra told reporters here.

The scheme would be applicable from assessment year 2011-12 onwards.

This means that the salaried persons eligible under the scheme would not have to file returns for the financial year 2010-11 in 2011-12 (assessment year).

However, such tax payers would have to file return if they want to claim refunds, Chandra said.

Source :PTI