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Direct Taxes-
Income Tax
● Threshold limit of exemption in the case of all assessees to be
increased by Rs.10,000 thus giving every assessee a relief of Rs.1,000 ;
● in the case of a woman assessee, threshold limit to be increased from Rs.135,000 to Rs.145,000 and
● in case of a senior citizen from Rs.185,000 to Rs.195,000 giving him or her a relief of Rs.2,000 ;
● deduction in respect of medical insurance premium under section 80D to be increased to a maximum of Rs.15,000 and, in case of a senior citizen, a maximum of Rs.20,000.
● Surcharge on income tax on all firms and companies with a taxable income of Rs.1 crore or less to be removed .
● Benefit of Section 36(1)(viii) to be available to cooperative banks;
● to be also allowed deduction in respect of provision for bad and doubtful debts under section 36(1)(viia);
● amalgamation and de-merger of banking companies is tax neutral - benefit to be extended to cooperative banks.
● Concessions under section 80IA for infrastructure facilities to be extended to cross country natural gas distribution network, including gas pipeline and storage facilities integrated to the network; and to navigation channel in the sea.
● To facilitate creation of urban infrastructure, issue of tax-free bonds through State Pooled Finance Entities formed for raising funds for a group of urban local bodies to be allowed.
● A benign assessment procedure to be introduced for assesses engaged in diamond manufacturing and trading who declare profits from such activities at 8% or more of turnover.
● A five year income tax holiday for two, three or four star hotels and for convention centres with a seating capacity of not less than 3,000 ; they should be completed and beginoperations in National Capital Territory of Delhi or in the adjacent districts of Faridabad, Gurgaon, Ghaziabad or Gautam Budh Nagar during April 1, 2007 to March 31, 2010 .
● Concession under section 35(2AB) to be extended for five more years until March 31, 2012 .
● Tax holiday to undertakings in Jammu & Kashmir to be extended for another five years up to March 31, 2012.
● Minimum Alternate Tax (MAT) to be extended to income in respect of which deduction is claimed under sections 10A and 10B; deduction under section 36(1)(viii) to be restricted to 20% of profits each year.
● Pass-through status to be granted to venture capital funds only in
respect of
investments in -
¤ venture capital undertakings in
biotechnology;
¤ Information technology relating to hardware and software development;
¤ nanotechnology;
¤ seed research and development; research and development of new
chemical entities in
the pharmaceutical sector;
¤ dairy industry;
¤ poultry industry;
¤ and production of bio-fuels, and hotel-cum-convention centres of a
certain description
and size .
● Limit of Rs.50 lakh per investor per year with respect to capital
gains bonds issued by NHAI and REC under section 54EC to continue .