TDS threshold limit Changed after budget 2010

Every person is responsible for deduct tax at source on the payment of any specified amount to any person at the specified rates, if it is above the prescribed limit by income tax act. Each section has its own prescribed limit to deduct tax at source (TDS). However, no need to deduct tax at source (TDS) if the amount paid don't be exceed to prescribed threshold limit by that particular section. So as per finance bill 2010 the prescribed threshold limit has increased and changed. The applicability date of changed threshold limit is July 1, 2010.

As per Finance Minister's speech in budget 2010

In order to adjust for inflation and also to reduce the compliance burden of deductors and taxpayers, it is proposed to raise the threshold limit for payments mentioned in sections 194B, 194BB, 194C, 194D, 194H, 194-I and 194J as under:

Sl. No.	Section	Nature of payment	Existing threshold limit of payment (Rupees)	Proposed threshold limit of payment (Rupees)
1.	194B	Winnings from lottery or crossword puzzle	5,000	10,000
2.	194BB	Winnings from horse race	2,500	5,000
3.	194C	Payment to contractors	20,000 (for a single transaction)	30,000 (for a single transaction)
			50,000 (for aggregate of transactions during financial year)	75,000 (for aggregate of transactions during financial year)
4.	194D	Insurance commission	5,000	20,000
5.	194H	Commission or Brokerage	2,500	5,000
6.	194-I	Rent	1,20,000	1,80,000
7.	194J	Fees for professional or technical services	20,000	30,000

These amendments are proposed to take effect from 1st July, 2010. http://www.etaxindia.org/2010/03/changed-threshold-limit-of-tds-after-budget-2010.html

Service Tax Quantum for e-filing of Return from 50 Lacs to 10 lacs

CBEC Reduces Quantum of Service Tax for e-filing of Return from 50 Lacs to 10 lacs as per notification given below.

NOTIFICATION NO 01/2010–ST. Dated: February 19, 2010

In exercise of the powers conferred by sub-sections (1) and (2) of section 94 of the Finance Act, 1994 (32 of 1994), the Central Government hereby makes the following rules further to amend the Service Tax Rules, 1994, namely :-

1. Short title and commencement.- (1) These rules may be called the Service Tax(Amendment) Rules, 2010.

(2) They shall come into force on the 1st day of April, 2010.

2. In the Service Tax Rules 1994 (hereinafter referred to as the said rules), in rule 6, in sub-rule (2), for the proviso, the following proviso, shall be substituted, namely:-

"Provided that where an assessee has paid a total service tax of rupees ten lakh or more including the amount paid by utilisation of CENVAT credit, in the preceding financial year, he shall deposit the service tax liable to be paid by him electronically, through internet banking."

3. In the said rules, in rule 7, after sub-rule (2), the following proviso shall be inserted, namely:-

"Provided that where an assessee has paid a total service tax of rupees ten lakh or more including the amount paid by utilisation of CENVAT credit, in the preceding financial year, he shall file the return electronically".

F. No. 137/13/2010 – CX.4

(Madan Mohan)

Under Secretary to Government of India

SC asked Samsung to reply why it is not liable to deduct tax in respect of goods outsourced for manufacturing

 

The Supreme Court has sought a reply from Samsung India  Electronics on the I-T department plea that the firm is liable to deduct tax in respect of goods outsourced for manufacturing. The issue has been raised by the income-tax department saying that consumer electronics and home appliances manufacturer Samsung India Electronics Ltd is liable to deduct tax in respect of goods outsourced for manufacturing to other manufacturers or original equipment manufacturers.

A Bench headed by Justice S H Kapadia has sought reply from Samsung on this.

Challenging the Delhi high court judgment that dismissed its plea, the I-T department said that the contracts for manufacturing products bearing the company's trademark are not sale deals but agreements for carrying out work.

It further said that under Section 194-C of the Income-Tax Act, 1961, tax should be deducted on such contracts.

Relying on the apex court's decisions in various cases, additional solicitor general Gourab Bannerjee said that in a works or service contract, the person performing or rendering the service has no property in what has been produced, notwithstanding the fact that part or even the whole of the material used by him might be his property.

The I-T department said that goods produced must have an individual existence as the property of the manufacturer who produced it.

After studying Samsung's transactions and the agreements, it was clear that those were not contracts for selling goods, the petition said, adding that as the goods carried the brand name Samsung, they could not have been legally sold by the manufacturers and, therefore, they were not commercial commodities.

"The manufacturers were not at liberty to dispose the products in the manner they found most beneficial or apt. Thus, the transactions were contracts for carrying out work and the respondent (Samsung) was liable to deduct tax on the same," the petition said.

"The entire production was being undertaken at the behest of the respondent (in accordance with) its technical specifications, which in turn were governed through strict quality controls audits, personal supervisions and other measures," it stated.

The department rejected Samsung's contention that the arrangement with the manufacturers was in the nature of 'purchase and sale' and on a principal-to-principal basis.

The authorities had also dismissed the company's argument that sales tax and excise duty were being paid by the manufacturers and the goods remained their property till they were delivered to Samsung.

However, the commissioner of Income-Tax (Appeals), on Samsung'plea, while holding that the transactions were sales, had set aside the department's order asking the company to pay tax of more than Rs 1.67 crore (Rs 16.7 million) for 2003-04.

Both the Income Tax Appellate Tribunal and the high court had held that the transactions were in the nature of the contracts for sale and not in nature of work contracts.

 

http://www.taxguru.in/income-tax/sc-asked-samsung-to-reply-why-it-is-not-liable-to-deduct-tax-in-respect-of-goods-outsourced-for-manufacturing.html

RBI allowed Paypal to pay for export of services and goods but not for personal payments

 

Mar 4, 2010 General InfoThere is good news for the companies using Pay Pal services as Reserve Bank of India has given the green signal for restarting the bank withdrawals in the country, the news was confirmed last week by PayPal. The RBI has approved in order to settle payments and withdrawals for exports of gods and services.

Fahad Irani, the company's Asia Pacific boss said that the personal payments still remain switched off. The bank withdrawal service is expected to resume by March 3 and the site is currently making changes to comply with and follow the Indian norms for settlement for exports of goods and services.

Online payment services were suspended last month in India. The shutdown was because of the doubts that were raised that whether the personal payments at Pay Pal were remittances payment from expat Indian workers. The companies will have a sigh of relief after the announcement while Pay Pal officials said that they were trying their best to obtain approval for the personal payment services as well.

: http://www.taxguru.in/general-info/rbi-allowed-paypal-to-pay-for-export-of-services-and-goods-but-not-for-personal-payments.html#ixzz0hHOzxigD