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Thread: Direct Tax Code

  1. #1
    Senior Member dnaga57
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    Angry Direct Tax Code

    While this is discussed in other forums, I felt that there should be a thread on this in Gconnect too.
    The suggestions elsewhere has been to represnt for
    • No ITax on pension irrespective of quantum - akin to Agriincome
    • At least maintain the present differential of 80000 Rs between Individuals & Sr Citizens viz. Make exemption for Sr Cot to 2.8 L from 2.5L
    • Make exemption for Senior citizens to 3.6 L
    • Allow ELSS schemes - deposits & not only PPF as it has long term lock in & no annual interest- income hence unsuitable for Sr Cit pensioners
    I have listed what I had seen. Others may add to the list
    Also suggest how we go about representing

  2. #2
    Senior Member jaleelethiyil is on a distinguished road
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    Question IT exemption

    Dear seniors,
    Is relaxation for ladies withdran in DTC ?.

  3. #3
    Senior Member Anthony is on a distinguished road
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    Default Dtc

    Dear Friend,
    The x'tra rebate for the Women and Senior citizens has been increased to 2.5 lakhs, for others it is 2 lakhs. The relaxation for ladies is not withdrawn in DTC.

    Anthony

  4. #4
    Senior Member dnaga57
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    Default

    Quote Originally Posted by Anthony View Post
    Dear Friend,
    The x'tra rebate for the Women and Senior citizens has been increased to 2.5 lakhs, for others it is 2 lakhs. The relaxation for ladies is not withdrawn in DTC.

    Anthony
    I think there is no mention of Ladies getting extra levels of exemption.
    It is 2L for men & women below 65 yrs, 2.5L for all above 65 yrs.
    This thread is trying to mobilise opinions- action to raise the 2.5L to
    • No tax on pension
    • limits increased to 3.6L
    • or at least to 3L keeping current diferential pronciple of 80000+
    Any suggestions...

  5. #5
    Senior Member Kanaujiaml is on a distinguished road
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    Default

    Quote Originally Posted by jaleelethiyil View Post
    Dear seniors,

    Is relaxation for ladies withdran in DTC ?.
    Yes, there wouldnot be any exemption in IT for Women in proposed DTC. For the ladies, the limit would remain as for others i.e. Rs. Two Lakhs only. I personally feel, the exemption limit for women should have been kept atleast at 2.25 Lakhs. This would have been a token of good will towards women.

  6. #6
    Senior Member Kanaujiaml is on a distinguished road
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    Arrow Proposed Direct Tax Code.

    My dear D Naga ji. Thanks for starting this new thread. I hope people would contribute freely. DTC is in proposal state although it has already been tabled. As Pensioner and Senior Citizen I strongly feel that Senior Citizen should be allowed 1 % more interest on FDs. Pensioners/Senior Citizens keep theirr life savings safely in FDs so that not only that the amount is safe but also it can be withdrawn without much of problem, very quickly, for use in emergency such as "health care". For the Banks it is the easiest source for maintaining liquidity. Senior Citizen would avoid investing other risky ventures if they are allowed 1% more interest than normal interest rates. This would increase the deposit amount which Banks can utilize and earn and square off any loss. It is off course, very necessary to start a compaign to invite attention of the Govt., particularly that of FM. Let us have more suggestions first and then we can decide about the method of the compaign.
    Last edited by Kanaujiaml; 05-09-2010 at 08:29 AM. Reason: for editing

  7. #7
    Senior Member dnaga57
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    Exclamation

    Quote Originally Posted by Kanaujiaml View Post
    My dear D Naga ji. Thanks for starting this new thread. I hope people would contribute freely. DTC is in proposal state although it has already been tabled. As Pensioner and Senior Citizen I strongly feel that Senior Citizen should be allowed 1 % more interest on FDs. Pensioners/Senior Citizens keep theirr life savings safely in FDs so that not only that the amount is safe but also it can be withdrawn without much of problem, very quickly, for use in emergency such as "health care". For the Banks it is the easiest source for maintaining liquidity. Senior Citizen would avoid investing other risky ventures if they are allowed 1% more interest than normal interest rates. This would increase the deposit amount which Banks can utilize and earn and square off any loss. It is off course, very necessary to start a compaign to invite attention of the Govt., particularly that of FM. Let us have more suggestions first and then we can decide about the method of the compaign.
    Thanks MLK
    I wonder whether FD interest rates ( 1% extra for Sr cit) be part of DTC. I think it needs to be in another thread.
    Maybe TDS for Sr cit on Bank FDs could be a part of DTC. Can pursue there.
    Let us see how much interest we muster

  8. #8
    Senior Member RKPATHAK is an unknown quantity at this point
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    Default Dtc

    DTC has been postponed by one year. All benefits shall now be available w.e.f. 1.4.2012, by the normal increase of exemption shall be rs 2.50 lakh.In fact govt unnecessary indulged themselves in a tamasha to befool the public

  9. #9
    Senior Member vnatarajan is on a distinguished road
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    Default

    I agree with MR RKP that the "election oriented atunt" is being changed in time-frame to suit the "partners" in the junta.

    Senior Citizens including pensioners were being forced to save "uoto one lakh and odd" to get maximised exemptions effectively upto 3.40 lakhs plus.

    I think Shri Bala has already pointed out the difference it may work out in IT when all 80C oriented exemptions are removed for Sr Citizens. Upto 10 lakhs notional estimates, the difference is substantial when the EET mode comes into operation- - say upto 9K orso. It is another matter that an average pensioner may not draw more than 5 lakhs.

    However, it will be appropriate to fight out the issue from all angles.

    vnatarajan
    Last edited by vnatarajan; 05-09-2010 at 12:27 PM.

  10. #10
    Senior Member SASI is on a distinguished road
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    Default

    Dear friends,

    Please give information about the deductions available from the income under the Direct Tax Code Bill.

    regards

    sasi

  11. #11
    Senior Member Kanaujiaml is on a distinguished road
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    Default Ref. Posts above.

    Dear friedns. What is the use of discussing the matter in this thread or amongsts ourselves without doing anything to draw the attention of the Finance Minister ? Therefore, my suggestion is that we should all send an application to the Finance Minister for increasing the exemption limit to say three lakhs in DTC for senior citizens. We can send the appeal in an envelope provided with stamp of Rs. five only. If we can arrange for sending these appeals in large numbers, then, perhaps, we may be able to draw attention of authorities concerned. Numbers in Democracy matter.

  12. #12
    Senior Member vnatarajan is on a distinguished road
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    Suggestion of Shri MLKji is excellent. As many Sr Citizens/ Pensioners as in agreement may respond pl.

    In associations also, the issue must become a standing Agenda Item in every meetingso that ithe DTC is discussed and the adopted resolutions must be conveyed to the Finance Minister/ Govt of India/ Concerned authorities suitably.

    (Yesterday 5th Sept 2010 , the Pensioners' Forum, Chennai - affiliated to AIFPA (Regd), Chennai had its GB Meeting and we (members) have resolved to fight out the issue and seek higher exemption limits etc.)

    Now I reproduce Shri Bala's post on DTC appearing as a separate thread:
    -----------------------------------------------------------------------------------

    Implications of direct taxes code bill, 2010 for senior citizens

    --------------------------------------------------------------------------------
    "A lot of euphoria has been created that nearly 96% of income tax assessees will be greatly benefited by the new tax structure and slabs provided for in the Direct Taxes Code Bill introduced in Parliament and being referred to a Select Committee of Parliament.
    In other words, nearly 4% of assessees are not going to be benefited but rather adversely affected. Senior citizens fall under this catgeory. For instance, suppose a senior citizen has a total income of Rs.3.4 lakhs; if he invests Rs.1 lakh under the instruments specified in section 80C of the present Act, (which will be locked for 3 years), he does not have to pay any tax at present. But with the replacement of section 80C by a new section which provides for tax exemption only for savings in long-term investments such as GPF, PPF, annuity plans, pension plans, and life insurance policies, which are of no avail to senior citizens, a senior citizen will, after the revised exemption limit of Rs.2.5 lakhs, after the direct taxes code comes into effect, have to pay a tax of Rs.9000 at the rate of 10% on the balance of Rs.90000 after Rs.2.5 lakhs, plus Rs.270 as cess at 3% of tax, if that continues.
    Surely, it is not the intention of Government to push senior citizens to a worse position, especially when the whole thrust is to give more benefit to all assessees in general. It is hoped that Government will incorporate the necessary amendments at the Select Committee stage to ensure that senior citizens are not adversely affected.
    Pensioners' associations could think of sending memoranda to the Select Committee of Parliament with further examples of how senior citizens will be adversely affected by the new direct taxes code bill when it becomes law, and with the humble prayer to the Hon. Committee to redress the grievances of senior citizens/pensioners on this score by sugggesting suitable amendments for the purpose. One such amendment could be to fix the exemption limit or no-tax limit for senior citizens at Rs.3.4 lakhs with no further tax exemptions, which at best will ensure the continuation of the [i]status quo.
    S.Balasubramanian. "
    __________________________________________________ _______________________

    vnatarajan

  13. #13
    Senior Member G.Ramdas is on a distinguished road
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    Dear All,
    With inflation hovering over 11%, the savings of senior citizens are eroded year after year, as the interest rates are much less. A concession of 1% additional interest will alone, also not solve the problem. Special concessions for senior citizens have to be worked out.I agree with S.Bala's views as reproduced by VN
    g.Ramdas

  14. #14
    Senior Member vnatarajan is on a distinguished road
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    Dear Interested,

    We must list out the demands periodically:

    Suggestions;

    1.Pensioners in a phased manner must be relieved from I/T net at some point of time.

    LET GOVT START WITH 73 YRS ( coinciding commutation end- a rebirth)

    2.Age for "Sr Citizen" to be brought down to 60 yrs (current retirement age)

    3.Current DTC is very dicouraging for Pensioners/ Sr Citizens needs thorough revision.

    4.Exemption Limit shall have to be raised minimum to 3.4 laks as even the 1 lak 80C/Tax Saving Benefit is being removed

    5.Any Tax Saving Scheme if availed must be out of EET provisions.

    6.Mediclaim/ Medical Expenditures etc must be fully deductible ( may be a major annual limit cd be kept) from income for tax calculations.

    7.House Alteration Loans must be provided with "tax exemption" incentives.

    8.Income from "ONE HOUSE/FLAT" must be totally exempt (whether u live in it or rent it!).

    8. Spouse also must be added from exemption limits ( say for Mediclaim/ Medical Expenses etc)

    9.Notional Conveyance expenses of 10% of Gross Income must be exemoted from Tax

    LET US TRY TO ADD/ MODIFY/ JUSTIFY MORE ITEMS.

    vnatarajan

  15. #15
    Senior Member dnaga57
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    [QUOTE=vnatarajan;9383]Dear Interested,

    We must list out the demands periodically:

    Suggestions;

    1.Pensioners in a phased manner must be relieved from I/T net at some point of time.

    LET GOVT START WITH 73 YRS ( coinciding commutation end- a rebirth)

    2.Age for "Sr Citizen" to be brought down to 60 yrs (current retirement age)

    3.Current DTC is very dicouraging for Pensioners/ Sr Citizens needs thorough revision.

    4.[Exemption Limit shall have to be raised minimum to 3.4 laks as even the 1 lak 80C/Tax Saving Benefit is being removed


    5.Any Tax Saving Scheme if availed must be out of EET provisions.

    6.Mediclaim/ Medical Expenditures etc must be fully deductible ( may be a major annual limit cd be kept) from income for tax calculations.

    7.House Alteration Loans must be provided with "tax exemption" incentives.

    8.Income from "ONE HOUSE/FLAT" must be totally exempt (whether u live in it or rent it!).

    8. Spouse also must be added from exemption limits ( say for Mediclaim/ Medical Expenses etc)

    9.Notional Conveyance expenses of 10% of Gross Income must be exemoted from Tax

    LET US TRY TO ADD/ MODIFY/ JUSTIFY MORE ITEMS.

    vnatarajan[/QUOTE
    Dear VN
    A good list....thanks.
    Suggestions
    1. Exemption Limit shall have to be raised minimum to 3.4 laks as even the 1 lak 80C/Tax Saving Benefit is being removed - your list
    2. This should read as 2,80,000, the current differential between non Sr & Sr citizens in one point
    3. Next point should be 3,80,000 in lieu of 80C exemptions being meddled with in DTC
    4. Thus two levels of exemptions is sought- one to maintain current differential & one to offset the disadvantage of limited availability of 80 C
    Apart from this the rest is fine with me
    Ley us see janatas reactions

  16. #16
    Junior Member Kriku56 is on a distinguished road
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    One point I would like to add here is

    "The provision of clubbing of income of the spouse at least with respect to senior citizen should should be removed from the DTC".

  17. #17
    Senior Member vnatarajan is on a distinguished road
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    Dear Shri Kriku,

    Pl clarify what is the "clubbing of income" of the spouse.

    Many of us do have separate PAN number for spouse and accordingly the "spouse's" income is shown separately in the spouse's IT Return (if it is necessary to file a RETURN).

    Where is the compulsion to club the income of the Spouse?

    EVEN IN ALL JOINT ACCOUNTs YOU ARE FIELDING IN THE "FIXED DEPOSITS" and other "SCHEMES" ETC EARNING INTERESTS, IT IS ALWAYS THE FIRST HOLDER WHO IS RESPONSIBLE FOR ACCOUNTING THE INCOME.

    Each one- husband separately and wife separately- can obtain separate PAN nos. in each one's "INDIVIDUAL" capacity.

    So confusion need be cleared.

    Regards
    vnatarajan

  18. #18
    Junior Member Kriku56 is on a distinguished road
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    Dear VNATARAJAN ji,

    As far as I know from the Income Tax Guidelines, “Do not you give gift to your wife/daughter in-law”, as income arising there from shall be clubbed in your hands.
    There fore one has to think twice before gifting to spouse.

    In true sense the income generated from the gift has to be clubbed with one's income. Having separate PAN for wife may not help. That is why I made a point to be included, for the removal of clubbing of such income in DTC, at least for the senior citizen. By which one can gift some amount to the spouse and reduce the tax liability.

    Hope I am right with the point.

    with regards
    kriku56

  19. #19
    Senior Member vnatarajan is on a distinguished road
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    Dear Shri Kriku,

    Yes. You are correct on the specific aspect.

    WE may try to understand it thru a case which had happened- rather because of "bulk" investment at a time.

    Once a taxable person gifts a "sizeable" amount to his spouse, it is also the ONUS for the "spouse" to account for it.

    IF THE SPOUSE INVESTS IN THE FIXED DEPOSITS AND EARNS INTEREST AND THEN ACCOUNTS THE SOURCE AS THAT FROM THE GIFTING HUSBAND, MAY BE THE EVENTUALITY WHAT YOU ARE SUGGESTING WILL COME UP.

    IN FACT, I HAVE COME ACROSS A CASE AS ABOVE EARLIER WHEN A "SIZEABLE" AMOUNT OF "GRATUITY" ON RETIREMENT WAS "SUDDENLY" INVESTED BY ONE OF MY COLLEAGUES IN HIS WIFE'S NAME AND SOMEHOW, THE IT SLEUTHS (MAY BE ACTING ON INFO FROM BANK SOURCES) SENT HER A NOTICE EVEN-THOUGH SHE WAS NOT AN ASSESSEEE,ASKING HER TO DISCLOSE THE SOURCE OF THE "SIZEABLE AMOUNT" AND FOR PAYMENT OF ITAX WITH PENALTY.

    (HOWEVER AFTER THE SOURCE WAS EXPLAINED AND A COUPLE OF RUNDS OF MEETING, PERHAPS THE ISSUE WAS SORTED OUT-BY PAYMENT OF TAX FOR THE INCOME ACCRUED OUT OF INTEREST and perhaps the matter was settled).

    vnatarajan

  20. #20
    Junior Member Kriku56 is on a distinguished road
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    Dear VN sir,

    Thanks for the explanation. This is what I exactly meant for.

    Presently if One gift:

    The income (interest) arising from the gift to One's daughter or son will not be clubbed as income of one's taxable income. And will be only taxed in the hands of the receiver( daughter or son).

    Where as, the income (interest) arising from the gift to One's daughter-in-law or wife will be clubbed as income of one's taxable income.

    What a logic.?!.. I don't know, how it arrived.

    The time has come to rethink the clause.

    with regards

    Kriku56

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