Direct Tax Code Updates for 2012

Direct Tax Code (DTC) was much awaited since Government announced it last year in 2009. DTC was supposed to be applicable from the financial year of 2011, but as a major update, it has been postponed for another financial year, i.e. 2012. So, DTC will now be applicable only from year 2012.

Finance Minister, Pranab Mukherjee has tabled the draft of Direct Tax Code on Monday, 30th August 2010 in Parliament.

Major highlights and changes to check in DTC are:

• Postponed DTC to be applicable from April 1, 2012
• Income Tax slabs has been changed and raised giving some relief to tax payers
• Exemption of Rs 100,000/- under 80C is limited to PF,  Pension and Annuity Funds
• Additional deduction of Rs. 50,000/- provided
• No change in long term capital gain tax for listed securities and equity mutual funds
• Change in formula for short term capital gain tax
• STT to remain there
• Corporate Tax is maintained at 30%
• MAT is increased to 20%
• 5% Tax on Maturity of Mutual Funds and equity oriented Life Insurance
• 5% Tax on Dividend Distribution (DDT) for equity mutual funds
• Tax break for SEZs

The above mentioned updates for new tax code may differ in the final draft as it has now been postponed by one year. This is actually the third revised draft after being first proposed by the cabinet.


Revised Tax Slabs:
0 - 2 lacs : No Tax
2 - 5 lacs : 10%
5 - 10 lacs : 20%
Above 10 lacs : 30%

Additional 50,000/- is for health insurance, pure life insurance, education and any medi-claim type of policy.

If there will be some changes or modifications required in the above points, they will be updated. Still there are few points need some clarification. Nothing is clear about LTA whether it will become Taxable or remain Non-Taxable.
As an update, Finance Ministry has cleared that individuals will continue to enjoy the benefits of LTA as before. So, nothing much really changed for individual tax payers except the changes done for Sec 80C.

ELSS (Tax Saving Mutual Funds), ULIPs, Tax Saving FDs will not come under section 80C from April 2012.

Direct Tax Code Updates for 2011

On 26th August, 2010, Union Cabinet of India cleared the new Direct Tax Code (DTC). The new tax code proposes to raise the basic exemption limit from Rs 1.6 lacs to Rs 2 lacs. The new bill is expected to be introduced and discussed in Parliament on Monday, 30th August 2010.


New Expected Tax Slabs:
2 - 5 lacs : 10%
5 - 10 lacs : 20%
Above 10 lacs : 30%

The revised draft that came in June earlier this year, already exempted proposed tax on long-term savings. More picture will be cleared once it will be discussed in the parliament on Monday.
Find out the latest updates of DTC as discussed on 30th August 2010.

Consultancy - A Low Risk Business

If you are looking to start a business which involves low risk, Consultancy Business could be a great option for you to start a business. To start a Consultancy business, you do not require a huge infrastructure and setup cost is quite low. What you basically need is to make as many contacts as possible. Identify the target industry, make contacts and check out the requirements of the industry.

Every corporate and big industries requires consultancy for many of their work to get done on time. If you can properly identify their needs and gives them a perfect solution, you can easily build a good reputation among your clients. Consultancy business will continue to grow with time as more and more industries will expand their businesses. Know more details about how to start a consultancy business and what you all need to grow you business.

http://www.moneymanagementideas.com/consultancy-business.html

How to type Indian Rupee Currency Symbol

Indian Rupee Currency symbol may not be typed directly from your keyboard unless the new symbol is accepted by the Unicode Consortium's Unicode Technical Committee. But it does not mean, you cannot type this symbol. There are ways to type this symbol from your keyboard, one such way is to install a special font and type the new rupee symbol. This font can be used to type the Indian Currency symbol by hitting (`) symbol, which is just above the 'Tab' key on your keyboard.

Learn step by step how you can type the Indian Rupee currency symbol from the below link.

http://hubpages.com/hub/How-to-type-the-new-Indian-currency-symbol-Rupee

Currency symbol finalized for Indian Rupee

India has finally got the unique currency symbol for Indian Rupee, which till now was denoted using 'Rs' or 'Re'. The new symbol is a perfect blend of modernity and Indian culture. It includes both the Devnagiri 'Ra' and the Roman capital 'R' and includes two parallel lines, which denotes "equals to" sign. Now Indian Rupee can be recognized globally by having its unique identity and symbol.

A unique currency symbol shows the robustness of the country's economy and now India too will be recognized as a global economy among other countries. It lend a distictive identity to the currency and further highlight the strength and global face of the Indian economy. The selected symbol has been designed by an Indian Institute of Technology postgraduate 'D Udaya Kumar'. Earlier, a committee headed by a Reserve Bank Of India (RBI) shortlisted five symbols and then redesigned them to give a new design to show robustness and perfect blend of modernity and Indian tradition. On Thursday, July 15th 2010, the Union Cabinet approved this design among the five selected symbols.

"The symbol will be adopted in a span of 6 months in the country, and within 18 to 24 months globally", as told by Information and Broadcasting Minister Ambika Soni. Later, it will feature on computer keyboards and softwares for worldwide use.

Shortlisted Currency Symbols for Indian Rupee

Earlier in 2009, Indian government decided to give the Indian currency a symbol to get it recognized globally and invited designs from all over the country. A committee headed by a Reserve Bank Of India (RBI) has shortlisted five symbols and expected to finalize the symbol on June 24th 2010. The Finance Ministry asked that the selected symbol should represent the historical and cultural ethos of traditional India.

As of now, there is no official symbol to represent Indian Rupee and India is using abbreviations “Re” and “Rs” for its currency. These abbreviations are also used by Pakistan, Sri Lanka and Nepal for their currencies. Now, we have to wait and check which symbol will be finalized and when notes will start bearing the new symbol. You can bookmark this page to stay updated.

On 15th July 2010, the Union Cabinet finally approved the symbol for Indian currency. The new symbol is a redesign of the shortlisted symbol to give a perfect blend of modernity and Indian culture.

Updates on Direct Tax Code for 2011 by Pranab Mukherjee

Earlier in 2009, Indian Government proposed a new tax code for year 2011. In this proposed tax code, government indicated radical tax reforms to simplify taxation. To make it robust and accepted by citizens, this draft was open for public suggestions. Now on June 15th 2010, government released its revised version of proposed Direct Tax Code (DTC).

The major change that came is that tax on provident fund and life insurance products are to be treated on Exempt-Exempt-Exempt (EEE) basis instead of EET (Exempt-Exempt-Tax). Another major decision is for ULIPs. From the year 2011, new ULIPs will not have EEE benefit but existing ULIPs will continue to get EEE benefit. Further, there will be no capital gains on savings schemes.

Tax Saving Mutual Funds

Mutual Funds are considered to be the best investment option with moderate risk. Though, Mutual Funds are linked with market, but they are managed by professional fund managers and fund-houses. You also get the option to invest your money in balanced or pure-equity funds. You can get really good returns from MFs, if you invest for a minimum period of 3-5 years.

As Mutual funds are so popular, special funds were introduced for the investors to save income tax. These funds are called as tax-saving mutual funds and popularly known as ELSS (Equity Linked Savings Scheme). ELSS has a lock-in period of three years, so when you invest in these funds, your money will be locked for three years. But, you can expect better returns after 3-5 years than other traditional savings schemes and you also get the tax rebate under section 80C.

But financial year of 2010 – 2011 may be the last year for you to invest in tax-saving mutual funds in India. As per the upcoming tax-code for the financial year of 2011-2012, Pranab Mukherjee, Finance Minister of India has proposed a new tax code for the financial year 2011. As per the new tax code, there will be no income tax benefits under section 80C for ELSS, Tax-Saving Fixed Deposits, and NSCs.

If the current proposal gets passed in the assembly next year, you will not be able to avail tax-benefits for ELSS from the financial year of 2011 onwards. So, it may be the last year for you to put some decent amount of money in tax-saving mutual funds. The decision of abolishing ELSS from 80C can definitely harm mutual fund industry as a major part of investment goes in tax-saving funds. Best feature of ELSS is its three years lock-in period, so you can easily withdraw your complete amount after three years of time and avail tax-benefits. Only alternative that will be left after new tax-code implementation would be ULIP with moderate risk and to grow your money. Though, as per recent announcement from SEBI, no new ULIP plans will be offered to users. Well, nothing much can be commented as of now as things are not transparent, but it might be a step towards direct tax code implementation and they might be planning to abolish even ULIP from 80C indirectly.

So, if you want liquidity of money along with tax-saving, tax-saving mutual funds can be the best bet for the financial year of 2010-2011.

Update:
As an update, direct tax code has been delayed by one year, i.e. 2012. So now you can invest in Tax Saving Mutual Funds (ELSS) in 2011 also and avail tax benefits under sec 80C. Click on the link to find the updates of new tax code for 2012.

Tax Saving Fixed Deposit

Financial year of 2010 – 2011 may be the last year for you to invest in tax-saving fixed deposits. There is a question in everyone’s mind, what can be the effect of abolishment of tax-saving FDs, NSC for investors and banks? For those who still are not aware of upcoming tax-code for the financial year of 2011-2012, Pranab Mukherjee, Finance Minister of India, has proposed a new tax code for the financial year 2011. As per the new tax code, there will no income tax benefits under section 80C for Tax-Saving Fixed Deposits, NSCs, and ELSS.

If the current proposal gets passed by assembly next year, you will not be able to avail tax-benefits for FDs under sec 80C from the financial year of 2011 onwards. So, it may be the last chance for you to put some money in these tax-saving FDs. As an investor, you must invest some amount of money in this tax-saving instrument. You can check for interest rates offered by major banks (SBI, ICICI, HDFC and other private & government banks), so whenever you find an increase in interest rate, invest some amount to avail tax benefits.

These FDs comes with a 5 year lock-in period, and the investment options that will be available after the new tax-code implementation will not be much flexible. ULIPs could be the only option available for you to invest money with a lock-in of 3 years, but as per the various studies, ULIPs do not give much return before 7-10 years.

So, if you want liquidity of money along with tax-saving, tax-saving fixed deposits can be the good option to look out for in the financial year of 2010-2011. As an investor and tax-payers, we may lose some freedom after the new tax code implementation, so utilize the current year to get the maximum benefit.

Update:
As an update, direct tax code has been delayed by one year, i.e. 2012. So, you have an option to invest in Tax Saving Fixed Deposits for one more year, i.e. 2011. Click on the link to find the updates of new tax code for 2012.

New Income Tax Code for 2010 - 2011 by Pranab Mukherjee

Government on Friday, 26th Feb 2010 has proposed new income tax code for the financial year 2010 - 2011. As per the new tax code, positive modification has been introduced in tax slabs.

There will be no income tax till Rs. 1.6 lakh (1,60,000) same as before.
But there are good changes done for other slabs-

There will be only 10% tax from 1.6 lacs to 5 lacs changed from 1.6 - 3 lacs
20% tax from 5 lacs to 8 lacs changed from 3 - 5 lacs
30% tax on the income above 8 lacs.

To give infra sector a boost, additional Rs. 20,000/- tax break is given for infra bonds. Now one can invest upto Rs. 20,000/- in infrastructure bonds.

This is a positive step taken by Finance Minister Pranab Mukherjee to cheer the tax payers in the country. Share Market also welcome the budget and gained more than 2%.