Indian Budget 2006-07 on Income Tax

Income Tax

• - No changes in the rates of personal income tax or corporate income tax.
• - No new taxes are imposed.
• - Abolishment of one by six scheme for filing of income tax returns.
• - 25% across-the-board increase in securities transaction tax
• - Exemption from taxes to cooperative lending banks and rural development banks under Section 80(B).
• - Fixed deposits in scheduled commercial banks with at least five year maturity will get tax exemption for savings under section 80C of Income Tax Act.
• - The Rs 10,000 exemption limit for investment in pension funds under Section 80CCC has been removed but these investments would be brought under Sec 80C subject to a ceiling of Rs 1,00,000.
• - Donations to only relgious institutions will be exempted from tax.
• - Minimum alternative tax on corporates increased from 7.5 per cent to 10 per cent.
• - Constituency allowances of MLAs to be treated as constituency allowances of MPs for income tax purposes.
• - Fringe Benefit Tax modified. Threshhold limits raised, but FBT will remain as it is justified for ensuring horizontal equity.
• - To check tax evasion more items would come under annual information return reporting.