Income-tax - Budget-2011

► Basic exemption limit for individuals increased to
INR 180,000 (for resident women below the age of 60
years exemption limit retained at INR 190,000).

► Age limit for qualifying as senior citizen reduced from 65
years to 60 years and basic exemption limit increased to
INR 250,000.

► Basic exemption limit of INR 500,000 applicable for
senior citizens of the age of 80 years or more.

► Surcharge on domestic companies reduced from 7.5% to
5%.

► Surcharge on foreign companies reduced from 2.5% to
2%.

► Basic rates of corporate tax remain unchanged for both
domestic and foreign companies.

► Activities in the nature of trade, commerce or business or
any related activities, pursued for advancement of object
of general public utility is “charitable purpose”, if annual
receipts from such activities do not exceed
INR 2.5 million (previous limit INR 1 million).

► Specified allowances and perquisites of Chairman and
Members of the UPSC are exempted.

► Exemption provided to specified income of a notified
body or authority or trust or board or commission set up
for regulating or administering an activity for the benefit
of general public, provided it is not engaged in any
commercial activity.

► Weighted deduction for contributions made to national
laboratory or a university or IIT or a specified person for
scientific research, increased to 200%.

► Investment linked tax deduction extended to taxpayers
engaged in developing and building affordable housing
projects under a scheme framed by the Central
Government or a State Government or in production of
fertilizers in India.

► Contribution made by an employer towards a notified
pension scheme allowed as a deduction (restricted to 10%
of the salary of employees).

► Tax holiday sunset clause for power sector extended to
31 March 2012.

► Tax holiday for undertakings engaged in commercial
production of mineral oil will not be available for blocks
licensed under a contract awarded after 31 March 2011.

► Deduction in addition to limit of INR 100,000 specified
under section 80CCE available to employees in respect of
contributions (upto 10% of salary) made to notified
pension scheme by the Government or any other
employer.

► MAT rate increased from 18% to 18.5% of book profit
(plus applicable surcharge and education cess).

► Income of SEZ developers and units will be subject to
MAT.

► Dividends declared by SEZ developers will be subject to
DDT.

► Introduction of AMT for LLPs at 18.5% (plus education
cess) of the adjusted total income. AMT credit allowed to
be carried forward and set off against future income-tax
liability for a period of ten years.

► Due date for filing the return of income by a company
which is required to report its international transactions
in Form 3CEB is extended to 30 November.

► Notified class or classes of persons exempted from filing
the return of income.

► Time limit prescribed for completion of assessment and
reassessments (including search assessments) to exclude
time taken for obtaining information from foreign tax
authorities under agreement for exchange of information
or six months, whichever is less.

► For determining ALP of international transactions,
instead of a 5% variation, the allowable variation will now
be such percentage as may be notified by the
Government.

► TPOs granted power of conducting a survey.

► Transactions with persons located in a NJA brought
within the purview of TP provisions.

► Transactions with a person located in a NJA subject to
certain disallowance/ taxability and higher withholding
tax under certain circumstances.

► The limit for making application before Settlement
Commission is reduced from INR 5 million to INR 1 million
in certain cases.

► Settlement Commission empowered to rectify its order
passed pursuant to the application before it, within a
period of six months from the date of the order.

► Non residents having LOs in India required to file a
statement, giving details of the activities carried out by
the LO, within 60 days from the end of the financial year.

► Revenue authorities empowered to make enquiries and
investigate for collection of information on requests
received from the Revenue authorities outside India,
pursuant to a double taxation avoidance agreement
entered into between India and the respective country.

► Income from infrastructure debt funds notified by the
Central Government will be exempt.

► Interest received by non residents from notified
infrastructure debt funds taxable at 5% (plus applicable
surcharge and education cess).

► Rate of tax on income distributed by mutual funds (other
than equity oriented funds) to a person other than
individual or HUF, increased to 30% (plus applicable
surcharge and cess).

► Dividend received by an Indian company from subsidiary
foreign company will be taxed at the rate of 15% (plus
applicable surcharge and cess), on gross basis.

► Deletion of scheme of DIN for correspondence with tax
authorities.