The following are the changes proposed in the Budget for FY 2009-10 that have an impact on Payroll:

Tax Slabs:

In Case of General Assesses:

Income Bracket Rate
0 to Rs. 1,60,000 0   %
Rs. 1,60,001 to Rs. 3,00,000 10 %
Rs. 3,00,001 to Rs. 5,00,000 20 %
Above Rs. 5,00,000 30 %

In Case of Women Assesses:

Income Bracket Rate
0 to Rs. 1,90,000 0   %
Rs. 1,90,001 to Rs. 3,00,000 10 %
Rs. 3,00,001 to Rs. 5,00,000 20 %
Above Rs. 5,00,000 30 %

In Case of Senior Citizens:

Income Bracket Rate
0 to Rs. 2,40,000 0   %
Rs. 2,40,001 to Rs. 3,00,000 10 %
Rs. 3,00,001 to Rs. 5,00,000 20 %
Above Rs. 5,00,000 30 %

* On final tax amount, a surcharge of 3 %
**No surcharge above 10 lacs.

Exemptions:

1) 80 C Limit Unchanged

2) 80 D

Mediclaim Premium on the Health of Investment limit
a)     Self Spouse and Children Rs. 15,000
b)    Parent/Parents Rs. 15,000
c)     If Parent/ Parents Senior citizen Rs. 20,000

3) Section 80DD

  1. Exemption was given for Expenditure made for a disabled dependant towards Medical Treatment/Training/Rehabilitation. It also includes the LIC/insurance paid towards maintenance of such dependant.
  2. Such exemption was up to 50,000 in case of normal disability and 75,000, in case of severe disability.
  3. This limit has been kept the same 50,000 in case of normal disability, but increased to Rs. 1 Lakh in case of severe disability.
  4. Applicable for AY 2010-11 (FY 2009-10)

4) Section 24(1)(vi)

Housing loan interest.
Maximum Investment Limit 1,50,000 (for loans taken after 1 April 1999, for loans before that Maximum Investment Limit 30,000).

5) 80DDB

Expenditure incurred on specified disease or ailments such as cancer/aids
Maximum Investment Limit – 40,000
In case of senior citizen; Maximum Investment Limit – 60,000

6) 80U

Permanent disability benefit (Self) – adhoc amount
Maximum Investment Limit – 50,000
In case of disability exceeding 80%, Maximum Investment Limit – 75,000

7) Section 80E

  1. Earlier it was applicable only for Graduate / Post-Graduate, Fulltime studies
  2. Now all studies after Class 12 is allowed, either vocational or Fulltime. But should be from a school/institute/university recognized by the government.
  3. Applicable for AY 2010-11 (FY 2009-10).

8 ) 80CCD:

Contribution to NPS and returns on NPS tax free, but withdrawal still taxable

9) 100% exemption on donation to political parties

10) Fringe Benefit Tax

  1. FBT was introduced in 2005.
  2. FBT is now completely withdrawn.
  3. Consequently, the fringe benefits will be taxed as perquisites in the hands of the employees.
  4. Superannuation – Any contribution made by a company to superannuation fund above Rs. 1,00,000 taxable in the hands of the employee
  5. Applicable for AY 2010-11 (FY 2009-10).