If you need any clarification on Union Budget 2003 - 2004 (Proposed)
You can mail your Queries
Our experts will reply your queries on this Portal.
Advisors:
- Mr. Y. P. Trivedi - Advocate
Supreme Court
- Mr. Narayan Varma - Chartered
Accountant
- Mr. Pinakin D. Desai - Chartered
Accountant
- Mr. K. K. Ramani - Advocate, High
Court
- Mr. N. C. Jain - Former Chairman,
Income Tax Settlement Commission
- Mr. Gautam Doshi - Chartered
Accountant
- Mr. Z. B. Nagarkar - Former
Commissioner of Central Excise & Customs
- Mr. K. R. Lakshminarayanan - Advocate,
High Court
- Mr. Rajan Vora - Chartered
Accountant
- Mr. Pritesh Mehta - Chartered
Accountant
- Mr. Sunil K. Ramani - Advocate,
High Court
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Replies to Your Queries
Q : Pl clarify whether 100 % exemption is restored instead
of 90% u/s 10 A for eligible. Units allowed for the cuurent yr 10 A ,as all speak about
the benefit extended to Business reorganistion acquistation etc. Your line of
clarification with the budget provision reference would go long way In understanding the
amendment on the above subject.
Mr. S. Chandramouli.
Reply:-
The proposed amendment is regarding continued availability of the
benefit u/s 10-A to the resulting company in cases of transfer of an undertaking of Indian
Company entitled to the deduction before expiry of specified period to another Indian
Company. In a scheme of amalgamation percentage of deduction is not affected with budget.
Q : FM has announced continuation of tax benefits on
housing loans. As per the previous finance bill, the exemption on interest on housing loan
was available only if the property was acquired / constructed before Apr 1, 2003.
Seemingly, this finance bill does not make any change to this date. Does this mean that if
I want the tax benefit (at least in next year), I will have to acquire the property before
March 31, 2003? Or am I missing something here?
Mr. Sandeep Asthana
Reply : -
There is no change in the Budget in respect of 2nd proviso
to sec. 24 which allows for deduction of interest on housing loans borrowed on or after
1-4-99 upto 1.5lakh regarding property where acquisition / construction is completed
within 3 years from the end of the financial years in which capital was borrowed.
Q :
If a person has already invested in LIC Bima Nivesh,
what shall be the treatment of receipts in his hands. If it is taxable dont you think it
is harsh on investors.
As passed in the last budget, investments u/s 88 can be
made out of last years savings / tax free incomes and not necessarily out of taxable
income from the current year. Does this till hold good.
As propsed for exemption of Long term Capital Gains, is
the purchase period of equities between 1.3.2003 to 31.3.2003 or 1.3.2003 to 1.3.2004.
Mr. Sitaram Bajaj
Reply :-
Budget proposes that any sum received under an insurance policy in
respect of which premium paid in any of the years during the term of the policy exceeds
20% of the actual capital sum assured. This will come in to effect from 1-4-04. We may
audit further clarification.
There is no change in Sec. 88 on this point.
The concerned equity should have been purchased any time after 1-3-03
and before 1-3-04
Q : From which date the increase in the service tax from
5% to 8% will be effective? Shall we charge increased rate of service tax from now?
Mr. Vinod Goswami
Reply :-
The increase in the rate of service tax will be effective from the date
of enactment of finance bill. You may not charge the increased rate in any case before
31-3-03
Q : The amendment to sec 10A speaks about extension of
benefit under this section for business re organisation, mearger & aequistation etc. I
would like to know whether 100 % exemption is restored on profits instead of 90% exemption
hiterto allowed . Though media reports suggest the restoration of 100% benefits and
NASSCOM resident went on record saying that 100% restoration of benefits is a welcome
step. Could you please clarify with reference to the Finace Bill ,2003.
Mr. S. Chandramoulieswaran
Reply :-
Exemption was reduced to 90% of the profits and gains only for the
assessment year begining on 1st day of April 2003 i.e. for the assessment year 2003-04
only. For all earlier and subsequent years it is 100%.
Q : My husband is staying in abroad. I would
like to know the recent rules of income tax for an NRI after he return to his native
country
Mrs. Amrata Nayak
Reply : -
As per the provision proposed in Finance Bill 2003, in case your
husband was Non-Resident in nine out of proceding ten financial years or was in Inida for
729 or lesser number of days, his status will be resident but not oridinary (NOR).
In the year in which he is in India for 182 days or more.
As a NOR he will not be subjected to tax in respect of income arising
out of India. He will be taxable only in respect of income earned in india
On return to India in case he does not get status of NOR he can
continue to be governed by the special provisions contained in chapter XII-A which means
that his investment income from foregin exchange assets (i.e assets acquired in foreign
exchange) will be assessed at concessional rate of 20% only.
Q : Kindly send me the full details reg. Standard
deductions from salary for the financial year 2003-04 as i hv to project salary income tax
within few days.
Mr. Joseph Patrao
Reply :-
Salary |
Standard Deduction
u/s 16(1) |
Up to Rs.5,00,000 |
40% of Salary
or
Rs.30,000 which ever is less |
Above Rs.500000 |
Rs.20,000 |
Q : I have read the Analysis of Budget 2003-04 by
you. However I wanted to know the exact date from which the increased rate of
Service tax (5% to 8%) will be applicable. Your analysis says the following:
"Rate of service tax is proposed to be raised from 5%
to 8% (from the date of enactment of the Finance Bill)."
What would be the date of enactment of the bill? Will it
be April 2003 or, the date when it will get the consent of President? Please clarify.
Mr. Amit Gupta
Reply :-
Existing services will be liable to service tax at the rate of 8% from
the date of the enactment of the finance Bill, 2003, i.e. the date on which the president
gives assent to the finance bill, 2003. Newly introduced services will be libale to
service tax at the rate of 8% from a date to be notified. Normally presidence gives
assent to the finance bill in the third week of May every year.
Q: I have a confusion over the applicability of surcharge
for the period 01.04.2003 to 31.05.2003. As observed from the history the new rate
of surcharge is applicable from 1st of June of the financial year. In the current year we
have a list of different combinations of surcharges. My query is Whether we have to add up
the surcharge ( 5% ) for the purpose of TDS during the period of two months April &
May 2003? If yes, then, should such amount be considered while calculating the limit of
Rs. 8.5 lakhs in some cases as required by the new provisions for the purpose of TDS.
Mr. Amit Gupta
Reply :-
Since budget is not yet passed, as a measure of abundant caution,
surcharge at 5% may be charged. Which applying surchage at 10% in the case of payees
with income above rs. 8.5laks, suitable adjustment may be made in the net amount of TDs
for the year.
Q : I agree that it will be effective from the date of
enactment of finance bill.
Just for my knowledge, which date is the date of enactment
of finance bill and which date is the date of enactment of finance Act.
Mr. Amit Gupta
Reply :-
Finance Bill is enacted in to Finance Act on the date the bill receives assent of the
president of india.
Q : I would like to know u/s 80 (g)(g) what is the
percentage of rebate please give an example to understand
Mr. Haji Ali I.D.
Reply:-
Total Income |
120000 |
Less : Deduction u/s 80L Bank Interest |
9000 |
|
Mediclaim u/s 80D |
7000 |
16000 |
|
|
104000 |
Rent paid Rs. 4000 PM X 12 |
48000 |
|
Less : 1/10 of 10400 |
10400 |
|
Rent paid in excess |
37600 |
|
25% of total income |
30000 |
|
Ceiling amount @2000 p.m |
24000 |
|
being the least, Rs.24000 is allowable
deduction u/s 80GG |
Q : Explain the rebate for lip u/s-88 and exemption u/s 10
at the time of maturity of the life insurance policy.
Minaxi Rachchh
Reply :-
Rebate u/s 88 us admissible @20% on LIC premium paid in the year.
Where the policy matures, maturity amount is not taxable 10
(10D)
Q : (1) one of my client got arrears of salary from 1998
to 2000 in mar-2003. out of his arrears gpf is deducted but from actual salary for
the above years the gpf was deducted as he was temporary. the gpf is started deducting
from the year 2001. my question is wether the gpf is to be deducted from the arrears of
salaty as he was not having the p.f. a/c in those years?
(2) for calculating the relief u/s 89(1) , should i deduct
the rebate u/s 88 for the above deduction of gpf while calculating the tax on individual
years for form no. 10E. e.g.
Minaxi Rachchh
1999-2000 gross total
income |
Actual tax liability |
|
25000 |
Deductions : 88 gpf |
nil |
|
ppf |
40000 |
8000 |
Tax paid |
|
17000 |
With arrears |
|
35000 |
Deductions:88 gpf |
10000 |
|
ppf |
40000 |
|
|
|
10000 |
Reply :-
Salary includes arrears of salary paid during the year and therefore
deduction of GPF is proper
Since GPF has been paid in A. Y. 2003 - 04, deduction u/s 88 is not
to be made for A. Y. 1999-2000
Q : What is the provision under section
80U under the Income Tax Act 2003 Amendments.
Mr. Paras
Reply :-
An individual who is certified by medical authority
to be a person with disability is entitled to deduction of Rs.50000 and
Rs.75000 in the case of server disability. A copy of prescribed
medical certificate should be furnished.
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