Session is washed out, Bill sails

A voice vote was enough to complete the three-stage Budgetary exercise8212;and clear over Rs 500,000 crore worth of finances. With the NDA ...

A voice vote was enough to complete the three-stage Budgetary exercise8212;and clear over Rs 500,000 crore worth of finances. With the NDA keeping away, Parliament today passed the Finance Bill without debate, clearing all the government8217;s tax proposals and 55 Amendments.

To clear the air for salaried persons, earning between Rs 1 lakh and Rs 1.11 lakh per annum, Finance Minister P Chidambaram amended tax liabilities to ensure that their net income after tax does not fall below the Rs one lakh mark. For instance, someone with an income of Rs 1,01,000 every year would now have to pay a net tax of Rs 1,000 instead of Rs 9,200 as per Budget 2004.

Chidambaram also sought to clear the air about filing of annual information report by income tax assessees for high-value transactions. The Amendments now clarify that individual assessees would not have to furnish details of high-value transactions along with their income tax returns. These would be tracked by the Income Tax Department through third party information systems.

High value property sales or share purchases, even car purchases, above a certain value will now be tracked by the I-T Department.

The Centre has decided to postpone the withholding tax on deposits from NRIs to April 1, 2005, Chidambaram told Parliament. The decision to tax aircraft leasing has also been postponed to the same date.

nbsp;	THE KEY CHANGES

		nbsp;	8226; Relief for those with income between Rs 1,00,000-Rs 1,11,000 8226; Withholding tax on NRI deposits put off till April, 2005 8226; Tax on aircraft leasing postponed to April, 2005 8226; Annual report on high value transactions to be tracked by I-T Dept 8226; Lower turnover tax applicable from September 1	nbsp;

Chidambaram8217;s July Budget had put a tax liability of Rs 9,000 on anybody who earned an annual income more than Rs one lakh while everybody earning up to this level was exempt from tax. This led to an anomaly where people earning slightly more than Rs one lakh would have post-tax net income falling below the Rs one lakh mark. At the same time, those earning below a lakh would have a take home income than the above category.

Now for incomes above Rs one lakh8212;upto Rs 1,11,200 anuually8212;tax liability will be such that any excess would go towards tax but the net income would not fall below the Rs one lakh level. For example:

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8226; For income slab Rs 1,01,000, tax liability would now be Rs 1,000 instead of the earlier Rs 9,200

8226; For an annual income of Rs 1,05,000, tax liability will now be only Rs 5,000 and not Rs 10,000 as per the earlier calculation in the Budget

Speaking to newspersons after the passing of the Finance Bill by the Lok Sabha, Chidambaram expressed his 8216;8216;unhappiness8217;8217; over the Bill being passed without a debate.