Change in Tax Rates

The Finance Bill, 2008
has made significant changes to the tax rates applicable to an individual,
Hindu Undivided Family, association of person and body of individuals whether
incorporated or not and every artificial juridical person. The threshold limit
for these entities has been increased from Rs. 1,10,000 To Rs. 1,50,000. The
tax rate applicable for income exceeding Rs. 1,50,000 to Rs. 3,00,000 shall be
10 per cent and for income exceeding Rs. 3,00,000 to Rs. 5,00,000 shall be 20

Each partner is allowed to charge interest on the amounts loaned by him to the firm. This interest paid by the firm is deductible expenditure while computing taxable profits.

Beginning 1st April, 2008, Government of India has made it mandatory for corporate Assessee to make e-payment of direct taxes. Besides corporate, assessees subject to Tax Audit would also be required to make e-payment of direct taxes.

These assessees would be required to make electronic payment through internet banking facility offered by any authorized bank. Alternatively, such payment can be made using credit or debit cards for making e-payment. As on date, about 22 banks are authorized to offer e-payment facility through Internet banking accounts.

Did you fail to deduct TDS at source, or deposit the income tax correctly or made a mistake filing the return? Under the provisions of Income Tax Act, while an Assessee is supposed to pay regular income tax due, he is also made to pay penalty for such default.

Under the provisions of section 147 of the Income-tax act, 1961, Income Tax Officer can reopen the case to tax the income that escaped taxation. The essential prerequisite of this re-opening is that Assessee should have omitted to disclose some primary facts.

The financial year 2007-08 is about to end, and if you have not made investments for planning your income tax, time is running out.

I have come across few people, who feel, should they invest in tax savings scheme or rather pay income tax?

To my mind, answer is clear. In Indian context, we do need some savings as we have to take care of old age problems and other contingencies. So some savings are must, and Income Tax savings provide a sort of compulsory way to save and one must save to the extent of savings allowed.

Mostly when you claim a deduction and the same is denied by Assessing Officer, Assessing Officer seeks to levy penalty for concealment. In one such case of Eicon International (P.) Ltd, Assessee filed return claiming deduction u/s 80HHB.

Assessing Office in absence of requisite evidence regarding various conditions to be met for a allowing deduction under section 80HHB, found claim to be not bona fide and accordingly, while making assessment order, also levied a penalty under section 271(1)(c).

To discharge specific responsibilities, often employers allow certain additional allowances as conveyance, entertainment, periodicals etc to help employee discharge duties efficiently. Insurance companies generally allow higher conveyance allowance to help an employee meet additional expenditure incurred for field duties.

You claim a deduction in the return and if the same is not allowed by Income Tax Officer, by default he proceeds to initiate proceedings for concealment of income. However, as recently ruled by High Court of Delhi in the case of Commissioner of Income-tax, Delhi-V vs Regency Express Builders (P.) Ltd, in cases where two views on an issue are possible, no proceedings of concealment need be initiated.