Thursday, 1 March, 2007

India Budget 2007 - Highlights

Proposals for Personal Taxes

  • TDS exemption limit increased from Rs. 5,000 to Rs. 10,000 on interest from Banks and Post Offices.
  • TDS made applicable on interest on 8% Savings (Taxable) Bonds.
  • Certain personal effects such as paintings, sculptures proposed to be covered within the definition of capital assets and brought within the ambit of capital gains tax.

Tax Rates
  • Introduction of secondary and higher education cess of 1% resulting in increase in education cess from 2% to 3%. The increase in education cess has resulted into marginal increase in overall tax rates.
  • No surcharge to be levied on domestic companies, partnership firms andforeign companies having total income up to Rs. 1,00,00,000, resulting in an effective tax rate of 30.90% for domestic companies and firms and 41.20% for foreign companies.
  • Effective tax rate for domestic companies and firms having taxable income exceeding Rs. 1,00,00,000 increased marginally from 33.66% to 33.99% and for foreign companies from 41.82% to 42.23%.
  • Basic exemption limit for individuals / HUFs increased by Rs. 10,000.
  • Deduction for entire amount of interest paid on a loan taken for higher education of spouse and children.
  • The limit of deduction under section 80D for premium towards mediclaim increased from Rs. 10,000 to Rs. 15,000.

read more at source (Manupathra)

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