Budget 2008 and Taxation

Budget for the year 2007-08 has come up without marking any significant change the tax scenario of the country. No changes are being marked particularly in the direct tax rates. The tax scenario in the General Budget 2007-08 is as follows:

Direct Tax:

No Change is being marked in the direct tax rates. The threshold limits for the income tax payers is increased by a sum of Rs.10,000. The limit for the women community is fixed at 1,45,000 and senior citizens at Rs. 1,95,000. It is good news for the companies is that the companies with a taxable income of Rs 1 Crore or less will be exempted from the surcharge of income tax.

Service Tax:

In the services tax scenario, new services are brought under the services tax net. The services such as outsourcing of minerals, oil and gas, development of content for advertising are brought under the tax nets. Apart from this, there is doubled rising exemption limit to 8 lakhs for the for the small services providers.The finance Minister has also emphasized in levying Service Tax on services involved in executing work contracts.No Services taxes for services provided by Resident Welfare Associations.

Fringe Benefit Tax:

In the general budget 2007-08, the employee stock option plan has brought under the Fringe Benefit Tax FBT.

Minimum Alternate Tax:

The Government has extended the Minimum Alternate Tax.

Tax Concessions:

In the General Budget 2007-08, a tax concession is being given to the two, three or four star hotels and convention centres in National Capital Territory of Delhi or in the districts of Faridabad, Gurgaon, Gaziabad or Gautam Budh Nagar.

This is an initiative in developing infrastructure related challenges keeping in view Commonwealth Games.

Excise Duties: Excise duties on cigarettes to be increased and at the same time the Government plans to reduce excise duty on pan masala.

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