Budget 2010 Update for Salaried Employees

Budget 2010 Update for Salaried Employees

A. Increase in take-home salary

The income tax slabs have been expanded in Budget 2010. Income above Rs. 5 lakh will be

taxed at 10 per cent, income between Rs. 5-8 lakh will be taxed at 20 per cent, and income

above Rs. 8 lakh will be taxed at 30 per cent.

The impact of expanded tax slabs will be an increased take-home salary. See the table

below for the increase in your take-home salary based on your taxable income:

Taxable Income Increase in monthly take-home salary

Up to Rs. 3 lakh Nil

Rs. 4 lakh Rs. 687 (men), Rs. 858 (women)

Rs. 5 lakh Rs. 1,717

Rs. 6 lakh Rs. 2,575

Rs. 7 lakh Rs. 3,433

Rs. 8 lakh and above Rs. 4,292

B. Additional savings of Rs. 6,180

After Budget 2010, you can make an additional investment of up to Rs. 20,000 in long-term

infrastructure bonds to get additional tax savings of Rs. 6,180.

These tax savings are over and above the Rs. 1 lakh investment for PPF, NSC, tuition fees

etc., under section 80C.

C. Housing Loan

If you wish to take a home loan and the cost of the house does not exceed Rs. 20 lakh, then

the home loans of Rs. 10 lakh will cost less till 31st March 2011.

Forgot to present investment receipts during proof verification?

You can make the investment/payment for income tax deductions till March 31, 2010. Even

if your receipts are not considered for TDS deduction, you can still claim tax refund in your

income tax return for all the investments that you make during the financial year.

Since the income tax returns are e-filed, you do not need to attach any investment receipts

or any other document with your e-return. You should keep the receipts with your for your

records.

Infosys to revive eastern India plan

Infosys to revive eastern India plan

Tuesday, March 23, 2010

Mumbai: Infosys Technologies, India’s second-largest IT firm by employee strength, is looking at setting up special economic zones (SEZs) in West Bengal and Assam, a senior executive of Infosys told DNA.

The move will throw up more job offers for computer science graduates and engineers in Eastern India.

Infosys already has a development centre in Software Technology Park at Bhubaneshwar, set up in 2000, which now employs about 3,000 software engineers. The firm is now looking to invest Rs 300 crore for its second project in Bhubaneshwar that will have a capacity of 5,000.

In Kolkata, Infosys had planned to invest Rs 500 crore to set up a development centre in 2004, housing 5,000 people. The project got delayed and in June 2009 an IT township project in Salt Lake, Kolkata was scrapped by the West Bengal government following a controversy.

However, in September the state government offered 45 acres each to Infosys and Wipro to set up development centres. But by then Infosys had developed second thoughts on the offer due to uncertainty in business environment.

“We were going slow on the offer due to the market meltdown. Additionally, the political climate in the state was not conducive then. But now we are considering the offer and evaluating it again,” said the Infosys executive who did not wish to be named as the company is in the mandatory silent period before the announcement of quarterly results.

Besides Kolkata, Infosys is also evaluating setting up an SEZ in Assam in the North East. “We are looking at North East to expand as well, but the problem there is of infrastructure and availability of professionals,” said the Infosys executive.

The company is looking to hire more than 20,000 professionals in FY10-11 due to improving business scenario. Infosys, which had 109,882 employees at the end of calendar year 2009, sees about 2,500 employees leave the firm every three months.

The Infosys move comes close on the heels of interest from Union government to attract investment in developing North East.
Earlier this month Sachin Pilot, minister of state for IT and communications spoke about government’s interest in developing Northeastern India. “North East can become a big centre for attracting investments from the private sector in business process outsourcing and knowledge process outsourcing,” Pilot said.

According to the minister, the Union government has helped Sikkim to set up a 50-seater business process unit and launched 3G services through BSNL. Similarly, the government is planning a software park at Itanagar for developing computer software and extending related professional services.

“I have already met the chief minister of Arunachal Pradesh. We are hoping to start this project soon. The state will then have a lot more money from the central government, which it can’t afford now,” the minister had said.

Pay more tax on FD interest from April 2010

As per section 206AA introduced by Finance (No. 2) Act, 2009 effective April 01, 2010, every person who receives income on which TDS is deductible shall furnish his PAN, failing which TDS shall be deducted at the rate of 20% in case of Domestic deposits and 30.90% in case of NRO deposits. Additionally, in the absence of PAN, Form 15G/H and other exemption certificates will be invalid even if submitted & penal TDS will be applicable. 

 If you have FDs that earn more than 10 thousand rupees per annum then you need to pay TDS on interest earned above 10 thousand at the rate of 10%. By submitting form 15G/H you can stop the bank from deducting this TDS.

Gratuity Calculation: The Gratuity Limit Rose From 3.5 Lakh to 10 Lakhs

Gratuity Calculation: The Gratuity Limit Rose From 3.5 Lakh to 10 Lakhs:
In the age of dearness and inflation it is the good news for private sector employees that the private sector will get the Gratuity of Ten Lakhs. As per gratuity act India, Gratuity limit was 3.5 lakhs. Now the limit of Gratuity has been raised from 3, 50000 lakhs to 10, 00000 lakhs. This decision of government will give advantage and relief to private sector employees. Now as per Graduity act there is no tax imposed on the income of 10 Lakhs.

On Thursday, in the lead of PM Manmohan Singh, this decision was taken at a cabinet meeting. This proposal of Labor and Employment Ministry has been given approval. Although many state governments has provided this type of advantage earlier. It is better decision regarding gratuity act to raise the Graduity limit.

CCEA has taken decision to open the 137 General Nursing and midwife school to remove the scarcity of nurses and midwives. These schools will be made in Bihar, Chhattisgarh, Madhya Pradesh, UP, Uttarakhand, Rajasthan, Orissa, Himachal Pradesh and others. The amount of 1370 crores will be spent on this planning.

For the Gratuity calculation the gratuity calculation formula is

1. basic/26 x 15 days x number of years of service

OR

2. BASIC + DA (Last Pay drawn) X 15 /26 X No. OF YEARS WORKS

Gratuity is to be paid to any employee only he provides service for a minimum time of five years at a stretch with his employer in company. The Gratuity calculation is done as per the last average remuneration drawn and time in years served by an employee.

New Tax Slabs for 2010-11

 PERSONAL TAX RATES

For individuals, HUF, Association of Persons (AOP) and Body of individuals (BOI):

Income Tax Rates/Slab for Assesment Year 2011-12 (F Y 2010-11)	Rate (%)
Up to 1,60,000 Up to 1,90,000 (for women) Up to 2,40,000 (for resident individual of 65 years or above)	NIL
1,60,001 – 5,00,000	10
5,00,001 – 8,00,000	20
8,00,001 upwards	30

Income Tax Rates/Slab for Assesment Year 2010-11 (F Y 2009-10)	Rate (%)
Up to 1,60,000 Up to 1,90,000 (for women) Up to 2,40,000 (for resident individual of 65 years or above)	NIL
1,60,001 – 3,00,000	10
3,00,001 – 5,00,000	20
5,00,001 upwards	30*
*A surcharge of 10 per cent of the total tax liability is applicable where the total income exceeds Rs 1,000,000. Note : - Education cess is applicable @ 3 per cent on income tax, inclusive of surcharge if there is any. A marginal relief may be provided to ensure that the additional IT payable, including surcharge, on excess of income over Rs 1,000,000 is limited to an amount by which the income is more than this mentioned amount. Agricultural income is exempt from income-tax.