Snapshot of tax proposals – BUDGET 2009 - PERSONAL TAX - India - Budget 2009

  • Personal income tax slabs increased by Rs.10,000 to Rs.15,000
  • Surcharge abolished for individuals, HUF and partnership firms
  • Receipt of any immovable and specified property without consideration or for inadequate consideration will be considered  as income from other sources to the extent the difference exceeds Rs. 50,000

Rates of taxes


Personal tax 
Personal income-tax slabs are proposed to be revised as under :
  • Minimum exemption for women raised from Rs. 180,000 to Rs. 190,000.
  • Minimum exemption for senior citizen raised from Rs. 225,000 to Rs. 240,000
  • Surcharge of 10% has been abolished for individuals, HUF and partnership firms
  • Education cess and Secondary and Higher Education Cess at 3% to continue


WEALTH TAX -  Wealth Tax exemption limit enhanced to Rs.30 lakh



Other Deductions under chapter VI A


Deduction in respect of contributions to political parties


·        It is proposed that with effect from April 1 2010, donations to Electoral Trust shall be allowed as a 100 percent deduction under Section 80GGB and section 80GGC


Deduction in respect of maintenance of a dependent with a severe disability


·        It is proposed to increase the limit for deduction in respect of maintenance (including medical treatment) of a dependent suffering from severe disability to Rs.100,000 from Rs. 75,000 w.e.f. April 1 2010


Interest on loan taken for higher education


·        Deduction for interest on loans taken for higher education has been extended to cover all fields of studies (including vocational studies) pursued after passing the Senior Secondary Examination or its equivalent from any school, board or university recognised by the Central Government or State Government or local authority. This amendment is effective from 1st day of April, 2010


 Contribution to pension scheme of the Central Government


·        It is proposed to permit contribution to the pension scheme of the government to self-employed individuals with respect to which contributions by such person or his employer (if any) are permitted as a deduction upto 10 per cent of his salary.


·        When such person receives the contribution (including accumulated income), it shall not be taxable in his hands if such amount is used for purchasing an annuity plan in the same previous year.


Income in special cases


Relief from anonymous donations [Section 115BBC]


·        Anonymous donations received by certain specified institutions would not be taxed upto:


o       5% of the total income of such institution, or

o       Rs.100,000 whichever is higher. Earlier, all anonymous donations were taxed in the hands of the institutions.




·        Capital expenditure incurred by certain business like cold chain facility, warehousing facility and laying and operating natural gas or crude or petroleum oil pipeline shall be allowed as deduction


·        Presumptive tax provisions for residents revamped; businesses with turnover less than Rs.40 lacs can be taxed at presumptive rate of 8%


·        Commodity Transaction Tax to be abolished


·        New provisions introduced with respect to taxability of Limited Liability Partnerships.


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