FinMin against raising Income Tax exemption limit to Rs 3 lakh

The Finance Ministry has rejected the recommendation of the Parliamentary Standing Committee headed by former Finance Minister Yashwant Sinha on raising the income tax exemption limit to Rs 3 lakh. The recommendation was made as part of the Committee’s report on the Direct Tax Code (DTC). Adjusting the slabs will cause tax revenue losses to the tune of Rs 60,000 crore a year to the exchequer, the Ministry has said.

It has, however, agreed to the recommendation on reducing the age for tax exemption for senior citizens from 65 years to 60 years. The Ministry has also rejected the recommendation on inflation-proofing the tax exemption.

The Finance Ministry released the proposed Direct Taxes Code - 2013 on Tuesday. Of the 190 recommendations made by the Committee, the Finance Ministry has accepted 153 either wholly or with partial modifications. In his Budget speech in February, Union Finance Minister P. Chidambaram had said that the government will seek public opinion on the revised DTC.

Earlier, the UPA Government had introduced the DTC Bill in the Lok Sabha in 2010 and later referred to the Committee. The revised DTC Bill will now be re-introduced in Parliament by the next Finance Minister post-elections.

The Parliamentary Committee had proposed no tax on income of up to Rs 3 lakh per annum; at the rate of 10 percent for Rs 3-10 lakh; 20 percent, for Rs 10-20 lakh and 30 percent on annual income beyond Rs 20 lakh. At percent, there is no tax on income of up to Rs 2 lakh per annum. Income of Rs 2-5 lakh attracts tax at the rate of 10 percent, 20 per cent on Rs 5-10 lakh and 30 per cent on income beyond Rs 10 lakh.

The revised DTC provides for a fourth slab for individuals, HUFs and artificial judicial persons with a view to maintaining overall progressivity in the levy of income tax. If their total income exceeds Rs 10 crore, it is proposed to be taxed at the rate of 35 percent under the revised DTC.

The revised DTC also said the income from a house property, which is not used for business or commercial purposes, will be taxed under the head ‘income from house property’.

The recommendations accepted include those pertaining to simplifying the structure and the content of the DTC for making it more user-friendly and at the same time “ensuring tax buoyancy by tapping high capacity/income and evasion prone segments”.

The recommendations ministry has rejected include the one on retaining the rate of taxation for life insurance companies at 15 percent against the proposed 30 percent and abolishing the Securities Transaction Tax (STT).

The Ministry has said that the revised DTC captures all assets for Wealth Tax, whether physical or financial, thereby removing the discrimination for taxation purposes against “conservative” taxpayers who invest their savings in physical assets.

The rate for the Wealth Tax is proposed (for individuals, HUFs and private discretionary trusts) at 0.25 percent. The threshold for the levy of in the case of individual and HUF is proposed at Rs 50 crores.

The draft Code also does away with the Settlement Commission as it has “not achieved the intended purpose of early settlement of cases and additional revenue realisation”.

The DTC Bill, 2010 had provided for a 50 percent threshold of global assets to be located in India for taxation. “This threshold is too high. There could be a situation that a company has 33.33 per cent assets in three countries but it will not get taxed anywhere.

Accordingly, the revised Code provides for a threshold of 20 per cent of global assets to be located in India for taxation...” it said.

Jayesh Sanghvi, National Leader - International Tax Services, EY says, “The proposed revisions relating to the onus of proof with regard to GAAR, transition provisions with repect to tax losses and MAT credit are welcome but the one on relaxing small shareholdings from the net of indirect transfers and the reduction of the threshold from 50 percent to 20 percent for substantial value may continue to some uncertainties”.

Source:http://www.thehindu.com/business/Economy/finmin-against-raising-it-exemption-limit-to-rs-3-lakh/article5858989.ece

Expected Dearness Allowance for July 2014 : AICPIN for the Month of February 2014.

No. 5/1/2014-CPI

GOVERNMENT OF INDIA

MINISTRY OF LABOUR & EMPLOYMENT

LABOUR BUREAU

‘CLEREMONT’, SHIMLA-171004

DATED: the 31st March, 2014

Press Release

Consumer Price Index for Industrial Workers (CPI-IW) – February, 2014

The All-India CPI-IW for February, 2014 increased by 1 point and pegged at 238 (two hundred and thirty eight). On 1-month percentage change, it increased by 0.42 per cent between January, 2014 and February, 2014 when compared with the rise of 0.90 per cent between the same two months a year ago.

The largest upward pressure to the change in current index came from Miscellaneous group contributing 0.34 percentage points to the total change. At item level, Rice, Wheat, Moong Dal, Fish Fresh, Goat Meat, Milk (Cow & Buffalo), Pure Ghee, Medicine, Barber Charges, Tailoring Charges, etc. are responsible for the increase in index. However, this increase was restricted to some extent by Arhar Dal, Groundnut Oil, Onion, Vegetable & Fruit items, Sugar, etc. putting downward pressure on the index.

The year-on-year inflation measured by monthly CPI-IW stood at 6.73 per cent for February, 2014 as compared to 7.24 per cent for the previous month and 12.06 per cent during the corresponding month of the previous year. Similarly, the Food inflation stood at 7.56 per cent against 8.94 per cent of the previous month and 14.98 per cent during the corresponding month of the previous year.

At centre level, Quilon recorded the highest increase of 9 points followed by Tiruchirapally & Conoor (6 points each) and Lucknow (5 points). Among others, 4 points rise was registered in 3 centres, 3 points in 2 centres, 2 points in 8 centres and 1 point in 10 centres. On the contrary, Chhindwara reported a decline of 5 points followed by Rourkela & Ajmer (4 points each), 3 points decline was observed in 6 centres, 2 points in 10 centres and 1 point in 12 centres. Rest of the 20' centres’ indices remained stationary.

The indices of 36 centres are above All-India Index and other 42 centres’ indices are below national average.

The next index of CPI-IW for the month of March, 2014 will be released on Wednesday, 30 April, 2014. The same will also be available on the office website www.labourbureau,gov. in.

Sd/-

(S.S.NEGI)

DIRECTOR

Source:http://labourbureau.nic.in/Press_IW_FEB2014.pdf

Minutes of the 1st meeting of the 7th Pay Commission Committee (PCC) held on 26.02.2014

Minutes of the 1st meeting of the Pay Commission Committee (PCC) held in the Conference Room with the representatives of the Federations and Associations at 11.00 hours on 26.02.2014.

List of those present in the meeting is annexed.

1. At the outset, Smt. Arti C.Srivastava Member – Secretary extended a warm welcome to all the invites. Member-Secretary further informed that a Pay Commission Cell (PCC) had been constituted under the chairmanship of Shri.Aidtya Mishra Sr.DDG/CP at OFB Hqrs to initiate deliberations and invite suggestions from all the stakeholders. Three preliminary meetings of the PCC have already been held. The meeting with the representatives of the Federations and Associations has been convened, as a part of the series of the meetings proposed to be held with all stakeholders to formulate views on various issues. A portal has also been launched on the OFB COMMENT to seek views of the officers, staff and employees on matters concerning 7th Pay commission and the General Mangers/Head of the Units have also been required vide Letter dated 14.02.2014 from the Chairman, PCC to have wide-ranging consultations in this regard and communicate their views and recommendations in the matter.

2. The Chairman of PCC, Terms of Reference ToR of the 7th Pay Commission are yet to be framed. However, at this stage, it is desirable if we pro-actively initiate all preparatory actions and crystallize our views and recommendations so that the same could be collated and compiled in the form of a comprehensive presentation before the pay commission at the appropriate time. Particularly, views are being sought on the methodology to the followed by the PCC, issues to be projected before the 7th Pay Commission and the areas/material/data to justify special considerations to the OF organisation vis-a-vis other organisations/cadres. In this connection, Chairman, PCC highlighted that issue relating to anomalies arising for the organisation, uniqueness about OFB, best practices in manufacturing sector, structural and policy limitations of the current system and the emerging ethos in line with other organisation could be deliberated. Therefore, Chairman, PCC invited representatives of the Federations and Associations to share their views in the matter.

3. From the views offered by the representatives of the Federations/Associations, it emerged that detailed proposals can be prepared only after the Terms of Reference (ToR) of the 7th CPC are finalised. The representatives of each Federation/Association however briefly raised the issues which would merit detailed consideration/deliberations at a later stage. Also based on the experience of the previous pay commission, it was proposed that :

1. it should be impressed upon the 7th CPC that the Ordnance Factories Organisation as an Industry has a different role to play and that its working is different from other Central Government Deptts. with employees working under hazardous conditions and hard stations.

2. All Cadre review proposals to be finalised immediately.

3. Anomalies arising out of the 6th Pay commission be settled.

4. Categories found to be not adequately taken care of in the 6th Pay commission be given thrust.

5. Recast skills, functions, roles of employees and pay structure to bring parity among various categories. 

6. Outstanding of activities to be discouraged.

7. OFB to take lead in interacting with 7th CPC as done on earlier occasions.

4. After detailed discussions, it emerged that pending finalisation of the Terms of Reference of the 7th pay commission by the Government, certain issues summarised below, were required to be addressed and the views concretised to establish a platform for formulating clear and effective recommendations on various issues :

i. Early finalisation of all cadre review proposals – Action by DDG of the respective Cadre Controlling Authority Division

ii. Settlement of anomalies arising out 6th Pay commission – DDG/Admin, DDG/G&DDG/IR (for ii, iii and iv and v)

iii. Examine issues which have resulted in litigations

iv. Policy issues which require immediate consideration

v. Strengthening of the PPC Cell at OFB Hqrs.

5. The meeting ended with thanks to the Chair.

Sd/- 

(Smt. Arti C.Srivastava) 

Member Secretary

Source:http://indwf.blogspot.in/