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Government may hike tax exemption under Section 80C in this Budget

Seeking to boost household savings, the Finance Ministry is considering doubling the exemption limit for investments by individuals in financial instruments to Rs. 2 lakhs. Presently the limit is Rs. 1 lakh consisting of Principal Amount of Housing Loan, GPF, Children Education  Fees, LIC  and other Life Insurance Policies etc.  Sources said the Revenue Department was assessing the burden on the exchequer in case of increase in the benefit limit. 

The Economic Times

No Merger of DA

 

 

Income Tax 2014-15 (Assessment Year 2015-16) – Salaried Women to get higher Income Tax Exemption Limit

Good news for salaried women!  Government is considering higher income tax exemption limit for women in the budget for 2014-15.

Finance minister Arun Jaitley is restructuring tax slabs and is thus set to approve a proposal to raise the tax exemption limit to  Rs 3 lakh from existing Rs 2 lakh. The government will ease the tax burden on the middle class and impose a higher tax on the super rich in its first Budget to be presented by Union finance minister Arun Jaitley next month.

According to the proposal, under consideration of the new government, there would also be a tax on the super- rich bracket, comprising those earning Rs 10 crore or more of 35 per cent. This category would be above the  Rs 1 crore, class which currently pays an effective tax of 33 per cent inclusive of a surcharge that the earlier government had introduced.

India’s tax regime is being overhauled by Finance minster  

§  Women  will be offered a higher tax relief —the threshold income below which individuals are not liable to pay taxes—for women could be fixed at between Rs. 3,25,000 to Rs. 3,50,000.

§   Rs. 1 lakh annual tax deduction allowed under Section 80C of the Income-tax Act has not kept pace with the rising inflation and needs revision.

§  a separate deduction of at least Rs 1 lakh per year specifically for education  is being considered

§  Exemption on home loans:  To reduce the burden on households for the interest paid on housing loan for a self-occupied house property a deduction of up to Rs 1.5 lakh is allowed. It can be increased to Rs 5 lakh per year.

Moreover, a proposal to reduce the age for tax exemption for senior citizens to 60 years from 65 years is also under consideration.

EXISTING TAX STRUCTURE

Income of less than Rs. 2 lakh a year are exempt from paying taxes.

Earning between Rs. 2 lakh and Rs. 5 lakh annually are taxed at 10%,

Between Rs. 5 lakh and Rs. 10 lakh at 20%

 

Earning more than Rs. 10 lakh pays a tax of 30%.

Grant of Honorarium to Inquiry Officers (IO) / Presenting Officers (PO) for conducting inquiry in departmental proceedings would be outside the purview of the general delegation under FR 46 B – Such Honorarium is not limited to Rs. 5000

No. 142/15/2010-AVD.1

Government of India

Ministry of Personnel, Public Grievances and Pensions

Department of Personnel & Training

North Block, New Delhi

Dated 23rd June, 2014

OFFICE MEMORANDUM

Subject: Grant of Honorarium to Inquiry Officers (IO)/Presenting Officers (PO).

The undersigned is directed to refer to this Department’s OM of even number dated 31.7.2012 laying down the rates of honorarium payable to Inquiry Officer / Presenting Officer for holding departmental proceedings.

2. It has been brought to the notice of this Department that the condition mentioned in para 2.1 of the said OM, was in conflict with the provisions of FR 46 B which limits the maximum amount payable as honorarium to an individual in a financial year to Rs. 5,000/- creating confusion whether the same was within the delegated powers of the Ministry.

3. The matter has been considered and it is clarified that the honorarium payable to IO/Presenting Officer for conducting inquiry in departmental proceedings would be outside the purview of the general delegation under FR 46 B.

4. This issues with the concurrence of Department of Expenditure vide their I.D. No. 141412009-E.II(B) dated 16.5.2014.

sd/-

(G.Srinivasan)

 

Under Secretary to the Government of India

Vizag CC issues ICT order i/r/o of Superintendents transferred to Vizag Zone

Hyderabad CCA IZT Orders,2014 in Superintendent cadre

IZT Orders for AGT,2014 in Superintendent Cadre in Hyderabad CCA today?

It is learnt that IZT orders for AGT,2014 in Superintendent Cadre in Hyderabad CCA are likely to be issued today or at the most by next Monday. It is expected that around 75 officers will be brought from Vizag Zone to Hyderabad Zone.

All the best to all the officers who are due for repatriation in this AGT from Vizag  Zone to Hyderabad Zone. 

LTC by air extended for 2 more years to Jammu and Kashmir and North East

 
The Union Ministry for Tourism  yesterday extended by another two years a proposal to grant Leave Travel Concession (LTC) to Jammu and Kashmir and North East by air   The package was due to expire yesterday.

The extension in package by another two years will allow all categories of Central Government employees to travel to Jammu and Kashmir by air, using either Air India or private airlines by Economy class only, irrespective of their entitlement.
 
The proposal would not only provide the Central Government employees an additional facility as an incentive but also give boost to tourism in Jammu and Kashmir, official sources said.

Abolish Revenue Secretary post; merge CBDT, CBEC, says Tax Administration Reform Commission

 
Recommending far-reaching reforms in tax administration, a government committee has suggested abolition of the post of Revenue Secretary, merger of CBDT and CBEC and broaden the use of Permanent Account Number (PAN). The panel, which has submitted its first report to Arun Jaitley, also pitched for a separate budget allocation to ensure time bound tax refund

The Tax Administration Reform Commission (TARC), headed by Parthasarathi Shome, also said the retrospective amendments to tax laws should be avoided as a principle and Income Tax Return should also include wealth tax details.

The panel, which has submitted its first report to Finance Minister Arun Jaitley, also pitched for a separate budget allocation to ensure time bound tax refund and a passbook scheme for TDS (Tax Deduction at Source).

"The post of revenue secretary should be abolished. The present functions of the Department of Revenue should be allocated to the two Boards (CBDT and CBEC). This would empower the tax departments to carry out their assigned responsibilities efficiently," the report said.

The tax administration, it added, needs to have greater functional and financial autonomy and independence from governmental structures, given their special needs.

It said, the revenue secretary, an IAS, is "likely to have little experience or background in tax administration at the national level and little familiarity with tax."

The 550-page report further said the two Boards must embark on "selective convergences immediately to achieve better tax governance, and, in next five years, move towards a unified management structure with a common Board for both direct and indirect taxes, called the Central Board of Direct and Indirect Taxes".

On PAN, the report said it should be developed as a common business identification number (CBIN), to be used by other government departments also such as customs, central excise, service tax, DGFT and EPFO.

"Both central excise and service tax should be covered under a single registration as both the taxes are administered by the same department and cross utilisation of credit is permitted between central excise and service tax under the CENVAT credit rules," it said.

The panel further said it is also necessary to provide for de-registration, cancellation or surrender of registration numbers and PAN.

It said the approach to retrospective amendments has resulted in protracted disputes, apart from having deeply harmful effects on investment sentiment and the macro economy and recommended "retrospective amendment should be avoided as a principle.

The panel suggested I-T returns should also include wealth tax return so that the taxpayer need not separately file wealth tax returns. These returns should also be processed together in the CPC at Bengaluru.

Besides, it called for a dedicated organisation for delivery of taxpayer services with customer focus and made a strong case for "pre-filled tax returns".

TARC also recommended that in line with international practice, a minimum of 10 per cent of the tax administration's budget must be spent on taxpayer services. At least 10 per cent of the budget should be alllocated and spent for ICT-based taxpayer services.

On tax refunds, the panel suggested it should be issued within a strict time frame.


EPF Interest may be raised to 9 % for the year 2014-15 – EPF Interest for 2013-14 is 8.75%

 Retirement fund body EPFO is likely to provide nine per cent rate of interest on PF deposits for the current fiscal to its over five crore subscribers, slightly higher than 8.75 per cent paid in 2013-14.

“The initial estimates indicate that the Employees’ Provident Fund Organisation (EPFO) can easily provide nine per cent rate of interest on PF deposits for 2014-15,” a source said.

According to him, the improved market conditions, especially after the formation of a new government at Centre last month, have raised expectations of higher yields on various investments by the body.

EPFO manages a corpus of over Rs 5 lakh crore. It has received Rs 71,195 crore as incremental deposits from its subscribers under social security schemes run by it during 2013-14, which is 16 per cent higher than Rs 61,143 crore collected by it in 2012-13.

The source said EPFO also plans to unlock its investment of around Rs 55,000 crore in Special Deposit Scheme (SDS). The government pays a fixed rate of eight per cent on SDS to EPFO which is lower than other investment options available in the present legal frame work.EPFO is also expected to improve yields or returns on its investment under the new norms prescribed under an investment pattern notified by the Labour Ministry last year.

According to the new pattern, EPFO can invest up to 55 per cent of its funds in debt securities issued by banks and financial institution and other body corporate.The new investment pattern also allows EPFO to invest up to five per cent of its corpus into money market instruments, including units of mutual funds, equity linked schemes regulated by Securities and Exchange Board of India.The new investment norms also provide for parking up to 55 per cent of the EPFO funds in a new category comprising government and state bonds.

Source : The Economic Times