Want to save more tax? Invest in IDFC Infrastructure Bonds

In the current financial year a new kind of relief has been announced which has never appealed to equity savvy investor which is Investment in Infrastructure bond under Section 80CCF. According to the proposal, individuals can invest up to Rs 20,000 in these bonds in addition to the Rs 1-lakh limit available under Sections 80C, 80CCC and 80CCD.

Entities like LIC , IDFC, IFCI can also issue these bonds or any other NBFC as classified by the RBI can even do this. Lately in September, IFCI issued these bonds on a private placement basis, and now, IDFC has decided to offer the first tranche of these bonds to the public. It plans to raise Rs 3,400 crore through such infrastructure bonds in one or more tranches during FY11. The government of India is IDFC’s single largest shareholder and it provides a range of financing solutions to the infrastructure segment in India.

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Tax treatment of Investments done before April1, 2012 New Direct tax code into effect

the day I have written about implications of New Direct tax code on Personal Finance, I have recieved numerous mails from readers regarding the maturity proceeds of investments they have already done. Also many of them want to know about benefits on yearly commitment in long term investments for many years to come, eg, Life insurance policies Premium etc. Most of us are really nervous and worried about how  New DTC will effect their investments

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New Direct tax Code effect on Non Resident Indians (NRI's): Do they need to fear?

I have already covered effects of New Direct Tax Code on Individuals in my earlier post. However, I received numerous mails from all over the world seeking clarifications regarding the NRI definition as per New Direct Tax code and its Tax implication on their overseas income.


In the last month I have seen various headlines in Every news website as well as News Channels that new Direct tax Code may hit NRI’s badly as “More NRIs may fall under the tax net if the Direct Taxes Code (DTC) Bill proposal to impose a levy on their global income if they stay in India for more than 60 days in a year is approved by Parliament.” This has been highly misinterpreted as it doesn’t not says exactly what has been mentioned above. You will be surprised to know that even in Income tax act 1961 under Section 6 it said the same thing. Its really surprising that this has been published incorrectly by even most reputed media houses in India, and till date no one has pointed it out.

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New Direct Tax Code effective 2012: How it effects Personal Finance: completely explained

In the year 2009, Government had announced the New Direct Tax Code (DTC) from 01/04/2011. This announcement had created a big hype and also talked about simplifying our Tax structures. Initially it talked about replacing EEE(Exempt Exempt Exempt) regime i.e. Exempt at Contribution, Exempt at accumulation and Exempt at withdrawal with EET (Exempt Exempt Taxed) regime i.e. all savings and investments would be taxed at the time of withdrawal. Income tax Slabs were proposed to be significantly higher from present which would have resulted in much lesser tax outflow.

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New Direct Tax Code Presented in Parliament on 30th August 2010 disappoints

The New Direct Taxes Code Bill introduced in Parliament on 30th August, 2010 is very different then what it was proposed in its initial as well as revised draft. It has many surprises and would disappoint Individual taxpayers who were expecting a lot from the Finmin. Although it is not a complete disappointment as we will be getting more than what we have at present. Please find the summary of Draft presented in the parliament 

• It will become effective from April 1, 2012 instead of April 1 2011. The DTC operationalization has been put on hold for a year to give tax practitioners, taxpayers and tax administrators time to become familiar with the new provisions.
  
  

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Decoding New version / Draft of New Direct tax Code 2011

The first draft of New Direct Tax Code, floated last year, drew flak after it proposed to tax various retirement / pension schemes at the time of withdrawal in the absence of any social security schemes like medical, old age benefit, death and disability benefit, unemployed person benefit as prevailing in developed countries practicing EET regime . Please refer my earlier post which provides detail description of Earlier Proposed Original New Direct tax code which was criticized specially for taxing retirement benefits. The revised draft, put for public discussion till June 30, retained the income tax exemption given to provident funds, pension funds at the time of withdrawal.

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NPS ( New Pension Scheme ) set to become most attractive investment option in India

NPS (New Pension Scheme) launched by govt. of India in May last year which didn’t kicked of as expected is set to get lot of attraction after release of new draft of Direct Tax Code 2011. According to the revised draft of the Direct Tax Code that was released by the finance ministry the government proposes to extend the EEE method of taxation to Government Provident Fund (GPF), Public Provident Fund (PPF), and the New Pension Scheme (NPS). Al annuity schemes of Life insurance companies are brought under the EEE method of tax treatment. NPS will now enjoy level playing field with other retirement schemes available in the country like PPF, GPF and EPF. This will encourage long term savings by citizens of India who would like to spend their later half of life with regular income or lump sum corpus.

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Filing your Income tax return is now very easy with Saral 2

The Central Board of Direct Taxes (CBDT) has introduced a new income tax Form - Saral-II, that aims at making the process of filing tax returns easier for individual taxpayers. The form is to be used to file the income tax returns for the financial year 2009-10(and the assessment year being 2010-11 ).

The Saral-II is a two-page form, mentioned by the Finance Minister in his budget speech for 2010-11. This form will enable individuals to enter relevant details in a simple format in only two pages. The form can also be downloaded from the Income Tax Department's website.

ITR-1 has been renamed Saral - II with E-filing available along the lines of last year ITR-1. New addition to the format of ITR-1 is that an assessee can show 'Income from House Property's. The house property income can be from one property only, and for more than one ITR-2 will be used.

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New Direct Tax Code may retain Few EEE Elements

The proposed Direct Taxes Code (DTC) is likely to retain the exempt-exempt-exempt (EEE) regime for taxation of individual savings. The finance ministry, which is giving final touches to the revised DTC draft, reckons that a shift to the exempt-exempt-tax (EET) regime, as proposed in the original draft of the code, may not pass muster.

In the current EEE regime, savings are exempt from tax in all the three stages: contribution, accretion and withdrawal. The EET method, which is considered to be the best global practice for taxation of savings, allows exemption at the first two stages, but provides for a tax on withdrawals at the personal marginal rate.

Government sources said that the via-media option of exempting withdrawals up to a certain threshold and taxing higher amounts could make things complex and invite charges of discrimination. “We would be left with no option

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New Direct Tax code to be impemented in 2011- Fully Decoded

This article focuses on the impact of the forthcoming budget and the New Direct Tax code with respect to the individuals. The proposed Direct Tax Code is a combination of major tax relief and removal of most tax-exempted benefits. It is expected to usher in a new tax regime of transparency and greater compliance, and is proposed to be implemented from the year 2011. Also the forth coming budget can be expected to bring about some of the changes for a smoother transition.

The Union Finance Minister Pranab Mukherjee conveyed a message to all taxpayers when he introduced the draft Direct Tax Code (Tax Code) that archaic rules have to be replaced  with new ones. The Tax Code, now open to  public debate, will be introduced

as a Bill in Parliament’s winter session. If passed, it will become the new Income Tax Act, replacing the existing four decade old IT Act of 1961. The new IT Act will come into force from April 1, 2011.

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