Ramblings-Rave & Rant

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Didn’t the annual tax season just pass by?

The key proposals of the radical tax reform draft code sounds too good to be true. Someone said long ago that the only way to cut down on taxes is to take a pay cut. I agreed only because I knew of no other legal way to pay lesser taxes!

Now that they have made public the new tax proposals, I hope the government does not renege on it, and gets the Bill tabled and passed before tax time 2010.

Key proposals for individuals
(Source: http://business.rediff.com/report/2009/aug/12/new-direct-taxes-code-released.htm)

  • Rates of tax to be uniform
  • Tax deduction limit on savings to be hiked to Rs 3 lakh (Rs 300,000)
  • Income tax slabs proposed to be changed; highest tax rate of 30% for individuals to be applicable for income over Rs 25 lakh (Rs 2.5 million)
  • Security transaction tax to be abolished
  • Effective corporate tax rate at 25 %
  • To scrap long, short-term capital gains distinction
  • Business losses can be carried forward indefinitely
  • No tax deduction on interest payable on any govt security
  • Base year for calculation of cap gains tax moved to April 2000
  • Wealth tax liability to be discharged by payment of pre-paid taxes
  • Income from certain transfers not be treated as capital gains

Meanwhile, I am taking off to la la land on the virtual savings I have made basis these tax reforms.

Filed under: Drama in real life,

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