Roti, Kapda but No Makaan!

Analyzing Tax Gain & Pain In The New EET Regime

• Tax Incentives for Housing Scrapped: Current deductions in respect of interest & repayment of housing loan abolished under the new Code.

• Higher Deduction For Savings & Children’s Education: Individual & HUF entitled to an aggregate deduction of upto Rs.3 lakhs in respect of permitted savings & children’s tuition fees payment, as compared to current ceiling of Rs.1 lakh.

• Accretions Exempt but Withdrawal Taxable: No tax on accretions to the permitted savings. However, any withdrawal from permitted savings to be taxed.
• Tax Shelter for Old PF/PPF Accumulations: Future withdrawals out of accumulated balance of PF & PPF as on 31^stMarch, 2011 to enjoy special exemption. (more…)

Not the Common Man’s Tax Code!

Small Salaried & Investors To Feel Soar!

Amar Bhatt, a middle class employee earning monthly salary of Rs 40,000 (annual Rs 4,80,000), currently manages to maintain a zero tax status by availing tax-free LTC & medical perks of Rs 70,000, deduction of interest on housing loan of Rs 1,50,000 and repayment of such loan of Rs 1,00,000 eligible for deduction u/s.80C.He is bound to be shocked when he gets to know that with the elimination of the exempt perks and scrapping of housing deductions as proposed under the new Direct Tax Code, his taxable income of Rs 4,80,000 will attract a straight tax of Rs 32,000. (more…)