1. New Slab of Income Tax For Assessment Year 2006-07
Particulars    A.Y. 2006-07   

A. Rate of income tax
For Individual/ HUF    Income           
Tax Upto 100000         NIL   
100000-150000       10%   
150000-250000        20%   
Above 250000           30%
above 10,00,000           30%  & Surcharge @ 10% & cess 2%

For Women below age 65 yrs       
Tax Upto 135000         NIL   
135001-150000       10%   
150001-250000        20%   
Above 250000                 30%
above 10,00,000           30%  & Surcharge @ 10% cess 2%    

For Senior Citizen Age 65 Yr        
Tax Upto 185000         NIL   
185001-250000        20%   
Above 250000                30%
above 10,00,000          30%  & Surcharge @ 10% cess 2%   

For Firms     30% & Surcharge @ 10% on Tax   & EC 2% on Tax & Surcharge   

For Companies Indian    30% & Surcharge @ 10% on Tax   & EC 2% on Tax & Surcharge   

For Companies Foreign    30% & Surcharge @ 2.50% on Tax & EC 2% on Tax & Surcharge   

Co-op Society  
income Upto 10000        10% NIL surcharge   
10000-20000               20% NIL surcharge   
above  20000               30% NIL surcharge   
Short Term Capital Gain on listed shares    10%   
Short Term Capital Gain on unlisted shares     Normal Tax   
Long Term Capital Gain on listed Shares     Exempt   
Long Term Capital Gain on other assets including un-listed Shares     20%    20%

Rates of TDS including Surcharge & Cess

Interest :(exceeding 5000/-)   
Payment to Individual, HUF      10.20%   
Payment to Firms           11.22%   
Payment to  Companies   22.44%   

Payment to  Contractor, Transporter,  Service provider etc.

If payment exceeds .20000/-
to  Indl., &  HUF             2.04%                 
Payment to Companies & Firms       2.244%   

ADVERTISEMENT If payment exceeds Rs.20000/-       
to Indl. & HUF             1.02%                 
Payment to Companies & Firms      1.122%   

Rent If the Rent exceeds Rs.120000/-
to Indl.& HUF       16.83%   
Payment to Companies/Firms                 22.44%   

Professional Services  
If payment exceeds Rs.20000/-
for individual                 5.10%   
For firm and companies          5.61%

TDS   on   Commission & Brokerage  If the amount exceeds  Rs.2500/-
for individual                  5.10%   
For firm and companies          5.61%   

Notes :    

1. Tax deducted during the month is to be deposited within 7 days of next month.

2. Tax deducted on 31st March is to be deposited upto 31st May.

3. Return of TDS are to be filed till 30-6-2005 at computer media for companies

4. The assessee must deduct TDS  with surcharge @ 10% for A.Y. 2005-06 & 2004-05  if the payments to one payee  (Individual/HUF)  exceeds Rs. 850000/-

5. If a senior citizen declares that his Tax liability shall be Nil than form 15H shall be accepted from him even  if  the  income or payment exceeds Rs. 50000/-

6. Kindly note w.e.f 2005-06 amendment has been made in section 40 where for a particular expense if TDS  which was  required to be deducted has not been deducted than such expenditure shall not be allowed under    Income Tax while  computing income.

7. Where the total payment to a payee under different contracts is more than Rs.50000/= during a year even   when the value    of each contract is less than Rs. 20000/= TDS at the applicable rates has to be     deducted at    the time of payment.

8.  Cess to be specified separately in the Tax deposit challis in others column.

9.  No tax credit is available for TDS if PAN not mentioned on TDS certificate so you must ensure that you   have  obtained the PAN and furnished the PAN  to payee deducting  tax from your payments.

10. TCS  yearly returns are to be submitted on or before 30-6-05

Other Amendments in Income Tax Act

1.  There will be no rebate for ladies/senior citizen from tax. Rebate under section 88C/88B are being withdrawn w.e.f A.Y. 2006-07. Surcharge of 10% (if taxable income exceeds 10 lacs) will be charged.

2.    Standard deduction from salaries has been being withdrawn.

3. Deduction from Gross Total Income u/s 80C from taxable income will be available to Individuals  & H.U.F. to the extent of Rs. 1 lac based on actual amount invested in following items: -
a)   LIC
b)   NSC
c)   P.P.F.
d)  Recognised Provident Fund
e)  Approved super annuation fund
f)    Subscription to specified govt. securities
g)    ULIP
h)    Contribution in ULIP of LIC mutual fund
i)    Annuity plan of LIC
j)    Units of notified mutual funds under plan formulated with Central Government.
k)    Pension Fund of Mutual Fund
l)    Deposits scheme of N.H.B.
m)  Tuition Fee (without sectoral cap)  of maximum 2 children without any limit on amount of fees paid
n)    Purchase/construction of house (without sectoral cap) Payment/Repayment of Housing Loan limit of Rs. 20000/- has been omitted
o)   Subscription to equity share/debenture of eligible issue (without sectoral cap).
p)  Investment in Infrastructure Bonds without any Mininmum  limit q).Deduction u/s 80C available even if income exceeds 5 Lacs    
r). Investment in Savings need not be from current years income.          
s).  Benefit u/s 80 CCC is being  withdrawn.    t). benefit u/s 80 CCD is being withdrawn.
However This Investments will be taxable at the time of redemption for modalities the manner is yet to be notified

4.Benefit u/s 80L i.e. deduction for interest on FDR etc is being withdrawn.

5.No multiple deduction u/s 80CCC & 80C and 80CCD.

6.Limit of 1 lakh on 80C/80CCC/80CCD

7.w.e.f. 06-07, interest on education loan only shall be deductible u/s 80E.  No monetary limit but repayment of loan will not be allowed.  

8.No deduction u/s 80 C in respect of bonds purchased u/s 54EC & 54ED.

9.Trading in derivatives shall not be treated as speculative transaction.

10.Speculation loss shall be allowed to be carried forward for 4 Assessment Years     only instead of 8 Assessment years w.e.f. A.Y. 06-07.

11.Banking Cash transaction Tax
w.e.f. from 1.06.2005, tax @ 0.10% will be levied on :-
Tax on cash withdrawals only for current account holders threshold limit fixed Rs 25,000 for individuals & HUF  and Rs 1 lakh for Companies. Withdrawls from savings account has been exempted.
Similar threshold limits for term deposits tax on banking cash transactions to be effective from June 1.
i)    withdrawl of cash > 25000 on any single day by a person from any scheduled bank or 100000/- for companies
ii)    receipt of cash > 25000 or 100000/- on encashment of term deposit on any single day.
iii)    Purchase of draft/banker cheque on payment of cash > 25000  or 100000/- on any single day by a business or company

12.Amount of banking transaction tax on the taxable banking transaction shall be allowed u/s 36(1)(xiii).

13.Income tax on fringe benefit
Every employer excluding individual & HUF & Charitable trusts or Institutions  shall have to pay Fringe  Benefit Tax. Firms Companies and AOP are included.
(a)    @ 30% tax be levied on value of such benefit provided to   employees.
(b)   Fringe benefits means
i)    privelege, service, amenity, directly / indirectly
ii)    any reimbursement
iii)    free/concessional ticket for private journeys of employees & their family member.
iv)    Contribution towards super annuation

Purpose       Valuation     effective Tax Rate
Entertainment        20%             6.732%
Gifts                50%            16.83%
Festival celebration   50%          16.83%
Use of club facility   50%        16.83%
Hospitality  
(except food & beverages
provided at place of  
business)         20%          6.732%      
Hospitality for hotels   5%          1.683%

Guest house             20%          6.732%
Conference             20%         6.732%   
Employee Welfare        20%          6.732%
Heath Club/sports/
other facility            50%          16.83%
Sales promotion/
publicity                20%          6.732%

Conveyance/Tour&Travel for
construction,
pharmaceuticals,
software                5%           1.683%    
others    business       20%         6.732%

Hotel/Boarding/Lodging          
construction,
pharmaceuticals,
software         5%           1.683%    
others               20%         6.732%

Repair/running/maint/
Depreciation  of car   20%           6.732%
(for employer
in this  business)      5%          1.683%   
Repair/running/
maintenance of
aircrafts              20%           6.732%

(for employer in this
Air line business)       0%          NIL

Consumption of fuel     20%          6.732%    

(for employer in this Industrial
fuel business)           5%          1.683%  

Telephone               20%          6.732%
Scholarship             50%         16.83%

Procedure  for FBT
A) Due dt. For filing of return
for audit cases         31st October
Others                  31st July
B) Belated/revised return within 1 years from end of Assessment Years.
C) Scrutiny rules same as are for Income Tax return.
D) Best judgement possible

Advance Tax to be paid for Fringe Benefit Taxes  Date are as under

Fringe Benefit Tax on . expenses during  
April - June      15 July   30% of value
July - Sept.         15 Oct.   30% of value    
Oct. - Dec.       15 Jan.   30% of value
Jan. - Mar.       15 Mar.   30% of value

Interest for delay is 1% p.m.
Interest for delay in filing of return 1% p.m.
Delay in return will attract penalty of Rs. 100 per day.
Non responding the notice of ITO will attract penalty of Rs. 10000/-
Concealment of fringe benefits will attract penalty of 100 % to 300% of tax

15. Fringe benefit tax under chapter XII-H will be disallowed u/s 40(a)(ic)

16..  Depreciation Rates Revised
Asset             A.Y. 2006-07    A.Y. 2005-06
General
Plant & Machinery    15%    25%
Car                    15%    20%
Furniture            10%    15%
Cylinders            60%    80%

17. Additional Depreciation @ 20% will be allowed on cost of new  plant & Machinery.      
No need for new or substantial expansion.

18. TDS certificate, if any, has to be attached with return for Assessment Year 2006-07.

19. Upto 2006-07 credit for TDS  will be given on production of certificate only.

20. Deductor shall have to issue TDS certificate in respect of TDS before 1.4.2006.

22.Securities Transaction Tax
for A.Y.  2006-07 w.e.f. 1.06.2005 STT will be

Nature                         2006-07    2005-06
delivery transaction            0.10    0.075
non delivery based transaction    0.02    1.015
Derivative Transaction            0.0133    0.01

23. MAT for A.Y. 06-07 or subsequent year shall be creditable in next years.

SERVICE TAX   w.e.f. 1.04.2005
Service providers upto 4 lakh are being exempted upto 4 lacs With immediate effect

All service tax providers to pay service tax ( Rule 6) latest by 5th of the following month/quarter.  (date preponed from 25th  to 5th )

w.e.f.1.4.2005 Business auxiliary service to include production or processing of goods for or  on behalf of client. Service tax exemption provided to a person who produces/processes goods, from input received from a manufacturing and sends the resultant product to same manufacture for further manufacturing of final product which are cleared on payment of excise duty.

Invoice to be issued within 14 days from
A) Date of completion of providing the service or
B) Receipt of payment.
whichever is earlier [Rule 4A(1)]

w.e.f. 1.4.2005 Centralised registration possible (Rule 4)

w.e.f. 1.4.2005. Scope Extended : -
1)  Commercial or industrial construction service to
i)    include renovation of such building or civil structure
ii)    include post construction completion and finishing services for such building or civil structure.
iii)    include construction, repair, alteration, renovation or restoration of pipeline or conduits.

2.    Erection, commissioning or installation services to include specified installation services

3.    Maintenance or repair services to include :
   

4)    Broadcasting services to include charges recovered by broadcasting agencies from multisystem operator (MSO) and provision of direct to home (DTH) signals to the customers.