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BUDGET HIGHLIGHTS (2003-2004)

GENERAL:

• Long -Term capital gains tax removed for listed securities acquired on or after 01/03/03 but before 01/03/04.

• One page only Income-Tax Return Form being introduced for individual tax payers, having income from salary, housing property & interest etc.

• Interest rate on public PF & small saving scheme reduced by 1% with effect from 1st March 2003. Interest on relief and saving bonds will also be reset accordingly.

• No Tax on dividend for share holders and Income from units of UTI are exempt with effect from 01.04.03.

• Voluntary Retirement Scheme (VRS) upto Rs.5,00,000/- be exempted from Tax even received in installments.

• Leave Travel Allowance (LTA) restored to Government employees only.

• Books of Account impounded during Income Tax raids will not be retained beyond 10days by inspector Under Section 133A (excluding holidays).

 Ø     Patents Income upto Rs. 3,00,000/- to be Tax exempt.

    Ø     Where premium  paid under  LIC  Policy exceeds  20% of the  actual sum  assured in any of during  year then  the whole sum  including bonus  received under the  policy will be taxable except  amount  received  in  the case of  depth of person.
 
    Ø     The simple interest rate at the rate of two  third percent for  each month of part of month be charged on excess amount refunded with effect from  01.06.03 under section  234D for the period of refund  granted  to  the date  of regular  assessment.

INDIVIDUAL/H.U.F.

 Ø     Surcharge - 5% surcharge on personal Income-Tax abolished for Income upto  Rs. 8.5 Lakh and Surcharge 
       on Income exceeding Rs. 8.5 Lakh be doubled  to 10%.

Ø     Rebate Under Section 88 B for senior citizen increased to Rs. 20,000/-.

Ø     ‘Varisht Bima Yojana’for senior citizen above the 55 years to be introduced  and  It will carry 9% rate  of interest.

Ø     Standard deduction upto 40% of the salary or Rs 30,000/-, which ever is lower for income upto Rs. 
      5,00,000/- & for above Rs. 5,00,000/- the deduction will be Rs.20,000/-. Tax break on education expenses 
      upto Rs. 12,000/- for two children Under Section 88.

Ø     Tax payers, Individual & H.U.F get deduction of Rs.12,000/- & Rs. 3,000/- in case of Government 
      securities Under Section 80L.

Ø     No TDS Under Section 193, 194, 194A 194EE&194K is liable to deducted on ‘NIL’ Income
      Self declaration made by Senior Citizen w.e.f. 1.6.03

CORPORATE:

Ø     Surcharge on Corporate Tax cut down to 2.5% from 5%.

Ø     Concession Under Section 10A/B in Income-Tax to be remained.

Ø     Tax holding on R & D extended.

Ø     12.5% dividend distribution fund tax on domestic companies enhanced from 10%.

PARTNERSHIP FIRM:     

Surcharge has cut down to 2.5% from 5%.

SERVICE TAX:

Ø    Service Tax raised to 8% from 5% and the following service are also included as follows:

i).  Commercial vocational institutes, coaching centers and private tutorial.

ii) Technical testing and analysis (excluding health and diagnostic testing), technical inspection and certification

iii). Maintenance and repair services like AMC.

iv).  Commissioning and installation services.

v).   Business promotion and support services including customer care services.

vi).  Internet café.

vii). Franchise services.

CENTRAL SALES TAX:     

Ø     Central Sales Tax ceiling to be cut to 2% from 4% during 2003-04.

VALUE ADDED TAX:     

Ø   VAT to be introduced from 1st April 2003  at state level  to  avoid cascading effect of Taxes  and be charged 
     for value addition at all stages of sale in the production & distribution chain.