Direct  taxes

New slab rate

Income upto Rs.1.6 lakh Nil

Income above Rs.1.6 lakh and upto Rs.5 lakh10 per cent

Income above Rs.5 lakh and upto Rs.8 lakh 20 per cent

Income above Rs.8 lakh30 per cent

Enhancement in 80C

Allow a deduction of an additional amount of Rs.20,000 for investment in long-term infrastructure bonds as notified by the Central Government. This would be over and above the existing limit of Rs.1 lakh on tax savings.

Health insurance

Health insurance schemes which is currently allowed as a deduction under the Income-tax Act, Now it is  proposed to allow contributions to the Central Government Health Scheme also as a deduction under the same provision.

Surcharge on company

It is proposed to be reduced the current surcharge of 10 per cent on domestic companies to 7.5 per cent.

MAT

To increase the rate of Minimum Alternate Tax (MAT) from the current rate of 15 per cent to 18 per cent of book profits.

Scintific research

To enhance the weighted deduction on expenditure incurred on in-house R&D from 150 per cent to 200 per cent.

To enhance the weighted deduction on payments made to National Laboratories, research associations, colleges, universities and other institutions, for scientific research from 125 per cent to 175 per cent.

Currently, any payment made to an approved scientific research association is eligible for weighted deduction. The income of the approved scientific research association is exempt from tax.

Now payments made to approved associations engaged in research in social sciences or statistical research would be allowed a weighted deduction of 125 per cent. The income of such approved research associations shall be exempt from tax.

To give a boost to investment in the tourism sector which has high employment potential, now there is proposal to extend the benefit of investment linked deduction under the Act to new hotels of two-star category and above anywhere in India.

To allow pending projects to be completed within a period of five years instead of four years for claiming a deduction on their profits. I also propose to relax the norms for built-up area of shops and other commercial establishments in housing projects to enable basic facilities for their residents.

Tax Audit

The turnover limit is enhanced to Rs.60 lakh in the case of businesses and Rs.15 lakh in the case of professions.

Presumptive tax rate

To facilitate the business operations of small taxpayers, it is porposed to extended the scope of presumptive taxation to all small businesses with a turnover of up to Rs.60 lakh.

Disallowed expenditure

Deduction of expenditure, if tax has been deducted at any time during the financial year and paid before the due date of filing the return shall be allowed.

interest rate is increased from 12% to 18% if tax deducted but not deposited by the specified date.

CApital gain

To facilitate the conversion of small companies into LLPs, capital gains on such conversion is exepted.

GPU Trust

Under the current provisions of the Act, "the advancement of any other object of general public utility" cannot be considered as "charitable purpose" if it involves carrying on of any activity in the nature of trade, commerce or business. this restriction would not be applicable if the receipts from such activities do not exceed Rs.10 lakh in the year.