Direct Taxes Code-dtc Bill 2009-impact On Salaried Class-individuals-vrk100-02092009

The following article from pages 2 to 11 was written on September 2, 2009 after the Direct Taxes Code Bill 2009 was released August 2009. Since then, the Government of India has come out with a Revised Discussion Paper on DTC. In the light of the new development, the author has written two separate documents and published them on http://www.pdfcoke.com/vrk100. The documents are: 1. Date published: June 20, 2010: Revised Direct Taxes Code 2010-Impact on Salaried Class and Individuals-VRK100-20062010: http://www.pdfcoke.com/doc/33282656 2. Date published: June 21, 2010: Revised Direct Taxes Code 2010-A Critique on Revised Discussion Paper-VRK100-21062010 http://www.pdfcoke.com/doc/33286075

In the following pages, please read the old document on DTC dated September 2, 2009:

By: Rama Krishna Vadlamudi, MUMBAI - [email protected] – Sept. 2, 2009

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NEW DIRECT TAXES CODE ITS IMPACT ON SALARIED CLASS AND INDIVIDUALS Rama Krishna Vadlamudi

[email protected]

MUMBAI September 2nd, 2009

India’s Finance Minister on August 12, 2009 released a draft of the proposed new Direct Taxes Code (DTC) with a view to ushering in radical changes in direct tax laws in India. The code is in two parts. The first part is a discussion paper (80 pages-hereinafter referred as DTCDP) containing provisions of the new Code in a simple language and the second part is the proposed draft Direct Taxes Code Bill 2009 (256 pages-hereinafter referred as DTCB). The new Code is expected to replace the existing Income Tax Act, 1961 and will come into force effective April 1, 2011 once the DTCB is approved by Parliament. Before that, the Code is open for public debate and necessary amendments, if any, will be made in the next 19 to 20 months. The DTC seeks to eliminate a plethora of tax exemptions and incentives while reducing the tax rates and increasing tax slabs. The proposed DTC is a single code for all direct taxes, like, Income Tax, Corporation Tax, MAT, DDT, wealth tax, etc. Written in simple language and direct voice, the DTC is more transparent compared to the existing direct tax laws. It seeks to encourage simplification and aims for stable taxes, better tax compliance, expanding the tax base, improving efficiency & equity, eliminating confusion and improving the Tax-GDP ratio.

By: Rama Krishna Vadlamudi, MUMBAI - [email protected] – Sept. 2, 2009

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SALIENT FEATURES OF THE PROPOSED DTC ARE: A. Personal Taxation: For individuals, salaried class, etc: 1. Limit for deductions of savings for individuals and salaried class will go up to Rs three lakh from Rs one lakh (under Sec. 80C of the existing IT Act) 2. Income slabs have been widened for the benefit of individuals, HUF and salaried class 3. The DTC proposes to introduce EET method of taxation of savings compared to existing EEE system 4. However, only new contributions on or after the commencement of the new Code will be subjected to EET. Withdrawal of accumulated balances as on March 30, 2011 in GPF, PPF, RPF and EPF will not be subject to tax (grandfathering clause) 5. Surcharge and cess on education will be removed and the peak income tax rate will be kept at 30 per cent 6. Several tax exemptions under Section 80 C of existing IT Act – like, instalments paid on Housing Loans, contributions to ULIPs and ELSS of mutual funds, Bank notified fixed deposits of 5-years or more, interest accrued on NSC – will be removed 7. Interest on Housing Loan will not be allowed as deduction 8. An individual’s gross salary would include all perquisites such as rent-free accommodation, medical reimbursements, leave travel concession, etc. And all these will be taxed according to their respective tax slabs. 9. Shifting investment by withdrawing money from one eligible saving scheme to another will not be treated as withdrawal and will not be included under taxable income 10. Changes are proposed to be made in calculation of income from house property 11. Withdrawals from Capital Gains Account Scheme will be included in the taxable income and will be taxed as per individual’s marginal tax rate 12. Agricultural income continues to attract tax exemptions B. Taxation of Companies: 1. Peak Corporation tax will be reduced from 34 per cent to 25 per cent while removing surcharge and cess on education 2. DDT remains unchanged at 15 per cent 3. Radical changes will be made in MAT whereby MAT will be imposed at two per cent (0.25 per cent for banking companies) of gross fixed assets replacing the existing system of 15 per cent MAT on book profits 4. MAT will be final tax and it will not be allowed to be carried forward for claiming tax credit in subsequent years 5. All tax exemptions will be phased out over a specified timescale 6. All area-based exemptions will be removed for corporates 7. Foreign companies will also have to pay a branch profit of 15 per cent 8. DTC provisions will override the provisions of tax treaties, for example, Double Taxation Avoidance Agreement with Mauritius

By: Rama Krishna Vadlamudi, MUMBAI - [email protected] – Sept. 2, 2009

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C. General and others: 1. Concept of ‘Financial Year’ will be introduced replacing the existing concept of ‘previous year’ and ‘assessment year’ 2. Radical changes will be made in Capital Gains Tax – eliminating distinction between long-term and short-term capital gains 3. Capital gains will be included under taxable income and tax will have to be paid according to the respective tax slabs 4. Indexation benefits on Capital Gains will continue with the base date being shifted to 1.4.2000 from 1.4.1981 5. STT will be abolished 6. Dividends (after the payment of DDT) will continue to be tax-free in the hands of investors 7. General Anti-Avoidance Rule will be introduced to combat tax avoidance (distinction between tax evasion and tax avoidance will be removed) 8. All trusts and institutions carrying on charitable activities will be brought under a new tax regime 9. Wealth tax is being overhauled completely

NEW TAX SLABS WEF APRIL 1, 2011 Proposed as per DTC

Existing

For resident individuals, HUFs, etc #

For resident individuals, HUFs, etc #

Total Annual Income (Rs.) Up to 1,60,000 1,60,001 to 10,00,000 10,00,001 to 25,00,000 25,00,001 and above

Rate of Income Tax NIL 10% 20% 30%

# For women below the age of 65 years, the exemption limit is Rs 1.90 lakh and for senior citizens of 65 years and above, the exemption limit is Rs 2.40 lakh

Total Annual Income (Rs.) Up to 1,60,000 1,60,001 to 3,00,000 3,00,001 to 5,00,000 5,00,001 and above

Rate of Income Tax NIL 10% 20% 30%

# For women below the age of 65 years, the exemption limit is Rs 1.90 lakh and for senior citizens of 65 years and above, the exemption limit is Rs 2.40 lakh

Note: There will be no surcharge and cess on education as per DTC

ISSUES THAT REQUIRE MORE CLARIFICATIONS: 1. Any withdrawal after 1.4.2011 from PPF account on investments made up 31.03.2011 will enjoy tax benefits. But, what about interest that is accrued on balances as on 31.3.2011 and becomes payable after 1.4.2011? 2. Whether or not sums received after 31.3.2011 in the form of a bonus or maturity proceeds from life insurance policies (that were subscribed prior to 1.4.2011) will enjoy tax benefits even after 1.4.2011? (Provisions under sub-section 2(f) and (g) of section 56 and sub-section 3(a) of section 57 of DTCB seem to have created some confusion as to the taxability of life insurance policies, particularly, ULIPs, money-back and endowment policies) 3. The perquisites, like, LTC, medical reimbursements and rent-free accommodation are proposed to be included under taxable income of salaried class. But, the mode of taxation on perks is not defined in the DTC.

By: Rama Krishna Vadlamudi, MUMBAI - [email protected] – Sept. 2, 2009

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4. Under Section 80C of the existing IT Act, two mutual fund pension schemes, namely Franklin Templeton’s Templeton India Pension Plan and UTI Retirement Benefit Pension Fund, enjoy tax benefits. It is not clear whether these two schemes will enjoy tax benefits once the DTC comes into effect.

TAX CONCESSIONS/INCENTIVES The following tax concessions will continue to be allowed under DTC: A. DEDUCTIONS ALLOWED FOR SALARIED CLASS ON THEIR GROSS SALARY: 1. Professional tax paid 2. Transport allowance as per limits 3. Allowances incurred for official purposes 4. Compensation received under VRS * 5. Gratuity received on retirement or upon death * 6. Amount received on commutation of pension * * subject to depositing these amounts in a Retirement Benefits Account (RBA) as per Government norms (see page 7 below for details on RBA)

B. DEDUCTIONS ALLOWED WHILE COMPUTING TOTAL INCOME: As per the proposed Sections 65 to 67 of DTC, the following deductions will be allowed for individuals/salaried class and HUFs: a) Section 66: A maximum amount of Rs three lakh in a financial year is allowed as deduction under this section. The sums should be deposited in any account maintained with any ‘permitted savings intermediary’ as per Central Government norms. (see page 7 below for definition of permitted savings intermediary) b) Section 67: Tuition fee paid to a college/school in India for full-time education of two children of an individual/HUF is eligible for deduction. Tuition fee does not include donation or development fee. Full-time education includes play schooling or pre-schooling c) Section 65: It states that the aggregate amount of deductions under section 66 and section 67 shall not exceed Rs 3 lakh in any financial year

Limit for deductions of savings for individuals and salaried class will go up to Rs three lakh (under DTC) from Rs one lakh (under Sec. 80C of the existing IT Act)

By: Rama Krishna Vadlamudi, MUMBAI - [email protected] – Sept. 2, 2009

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C. OTHER TAX INCENTIVES AS PER SECTIONS 68 TO 72 OF DTC:
Section 68: An individual shall be allowed a deduction in respect of any amount actually paid by him in the financial year by way of interest on loan taken by him from any financial institution for the purpose of: (a) pursuing his/her higher education; or (b) higher education of his/her relatives.
Section 69: Health insurance premium of up to Rs 15,000 (Rs 20,000 for senior citizens) will be allowed as deduction for an individual/HUF. For health insurance on the health of his/her parents, an additional deduction of Rs 15,000 (Rs 20,000 if the parents are senior citizens) will be allowed .
Section 70: An individual will be allowed a deduction of up to Rs 40,000 (Rs 60,000 for senior citizens) for medical treatment of self or dependents
Section 71: An individual/HUF will be allowed a deduction of up to Rs 50,000 (Rs 1 lakh for severe disability) for medical treatment of a disabled dependant
Section 72: A person shall be allowed a deduction of up to 125% of donations made to laboratories and colleges engaged in scientific/statistical/social sciences research. A person shall be allowed a deduction of up to 100% of the donations made to PM National Relief Fund, CM Relief Fund, etc. And in other cases, 50% deduction is allowed for donations made to certain organisations.

TAX DEDUCTIONS/INCENTIVES TO BE WITHDRAWN: Some important deductions that will not be allowed in future under DTC are: o Interest of Rs 1.50 lakh paid on Housing Loan and allowed as deduction, under existing laws, will not be allowed under DTC o Housing Loan instalments of up to Rs 1.00 lakh in a financial year and allowed as deduction under Section 80C of existing IT Act, will not be allowed as deduction under DTC o Contributions made to Equity Linked Savings Schemes of Mutual Funds o Notified Bank Time Deposits for a term of 5-years or more o Accrued Interest on NSCs o Contributions made under Unit Linked Insurance Policies o Perquisites (like, rent-free accommodation, medical reimbursements, LTC and encashment of earned leave) provided by Central Government or other employers will be monetised and included under taxable income and tax will have to paid accordingly o Under DTC, bonuses or sums received from life insurance policies will not be allowed for deduction in case: (1). Annual premium paid is more than five per cent of the sum assured; and (2). If the policy is surrendered before the maturity date (as per clause (a) of sub-section 3 of section 57 of DTC) SOME NOT-SO-FAIR & UNSAVOURY ASPECTS OF DTC: The most glaring unfair provision seems to be that the peak rate of income tax will be kept at 30 per cent for individuals; whereas the maximum rate to be charged on companies will be reduced to 25 per cent from 34 per cent! It is not clear why such a distortion occurs in tax rates between individuals and corporates. Does it mean that individuals have to suffer higher tax rates as compared to companies?

By: Rama Krishna Vadlamudi, MUMBAI - [email protected] – Sept. 2, 2009

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Even though the tax slabs have been widened, it may not be fair to include perks, like, LTC, medical reimbursements by employer, etc, under taxable income. Even the EET regime may have to be tweaked a bit so that the burden on retired people is not very high. In India, we do not have any social and old age security. As such, governments have to treat our senior citizens in a sympathetic manner for some more years. What is amazing is that the government expects the taxpayers to shift to EET method without giving any cushion. Individuals need some comfort period to make a changeover to the new EET regime. Let us examine a typical case: Till now, we have been advised, time and again, to invest a substantial portion of our savings in life insurance policies (especially, money-back/endowment policies and ULIPs), NSCs, PPF, pension policies, VPF, EPF, ELSS, etc, to exhaust the limit set for tax deductions under the existing Section 80C of IT Act, 1961. In line with their investment objectives, many individuals have invested a major portion of their savings in instruments, like, life insurance policies (especially LIC), PPF, NSC, ULIPs, ELSS, etc. Now, the government expects us to shift our focus overnight to a new system whereby all withdrawals will be included in the taxable income (despite the grandfathering clause) and embrace risky investments in the guise of ‘best international practices.’ TDS PROVISIONS FOR LOW-INCOME EARNERS & SENIOR CITIZENS: Annual interest of a sum above Rs 10,000 from bank time deposits (in other cases, interest above Rs 5,000) received by individuals attracts TDS. To avoid such TDS, individuals submit Form 15-G (Form 15-H for senior citizens) to banks so that banks will not deduct any Tax Deduction at Source on interest received by the depositors. Under the DTC, this facility will be withdrawn. Instead, depositors will have to approach the Income-Tax Department and seek its approval and submit the same to banks. This will prove to be a nightmare for small depositors and senior citizens. WHAT IS EET REGIME? As of now, individuals enjoy several tax benefits – of course, subject to certain quantitative limits – on their investments in a multitude of savings instruments; namely, EPF, VPF, PPF, GPF, NSC, insurance policies, ULIPs, ELSS, bank fixed deposits, post office deposits, housing loan instalments, interest paid on housing loan, etc. The present system is called ‘EEE’ meaning investments enjoy benefits in three stages: 1). Exemption allowed at the time initial contribution, 2). Exemption through out the accumulation period, and 3). Exemption at the time of withdrawal. The EET method will apply for new contributions made after the commencement of the DTC. The DTC proposes to shift to a new system called ‘EET’ whereby exemption will be allowed at the time of initial investment and accumulation period only; but the withdrawals will be included in the taxable income and taxed according to one’s tax slabs (the spin doctors in the Government want us to believe that moving to an ‘EET’ regime is as per the ‘best international practices!’ Wow, what a discovery? Till the other day, the gullible Indian public have been repeatedly (in fact, ad nauseam) informed by the Government authorities that India has withstood the aftershocks of the global economic crisis because of the ‘best Indian practices!’ What a ruse!) Simply put, under the proposed EET regime, tax savers will be postponing their tax liability for future or till the date of retirement. Is retirement the best time to pay our taxes by avoiding payment of taxes during our earning years?

By: Rama Krishna Vadlamudi, MUMBAI - [email protected] – Sept. 2, 2009

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RETIRMENT BENEFITS ACCOUNT (RBA): The proposals contained in DTC state that the following sums have to be invested in a Retirement Benefits Account in order to have tax benefits: 1. Compensation received under VRS, 2. Gratuity received on retirement or upon death and, 3. Amount received on commutation of pension. As per sub-section (2) of section 22 of the DTCB, deductions shall be allowed if the amounts referred to therein are deposited in an RBA maintained with any permitted savings intermediary as per Central Government norms. In this connection, a permitted savings intermediary is defined as a/an: (a) Approved provident fund – as approved by PFRDA; (b) Approved superannuation fund – as approved by PFRDA; (c) Life insurer – life insurance companies under the ambit of IRDA; and (d) New Pension System Trust – administered by PFRDA. The ‘catch’ here is that withdrawals from this RBA will be finally subjected to tax at the time of withdrawal. It is really a startling situation! The proposal of depositing withdrawals into an RBA may not go down very well with retiring people and senior citizens as they may not be able to meet their post-retirement obligations. NEED TO HAVE A LOOK AT EVERYTHING WITH FRESH PAIR OF EYES: We need to look at the new Code with fresh eyes without any old baggage. Theoretically, the concept of EET, removal of all kinds of tax incentives/concessions, and clubbing all sums under taxable income, are sound and beneficial in the long-term. However, India is beset with its own set of peculiarities, contradictions and problems as far as increasing tax base and administering taxes is concerned. We need to change our mindset – not only taxpayers, but also those in the tax administration and implementation. The Central Government has got a challenging but Himalayan task with regard to educating the taxpayers and employees of the Income Tax department about the DTC while shedding the legacies of the past. Everybody needs to evaluate the provisions of DTC from a macro level. MY TAKE ON THE DTC RELATING TO INDIVIDUALS AND SALARIED CLASS: 1. Basically, the new DTC offers a ‘bait’ to individuals and salaried class so that they can enjoy the gains of low taxes and higher deductions while accepting pains from the EET regime; removal of various of tax exemptions and incentives; and inclusion of all types of sums under taxable income 2. Perhaps, the reduced tax slabs are prima facie deceptive 3. I am not too sure whether taxpayers, especially those in the Government sector & low/middle income groups, will accept the bait offered by Central Government 4. It seems to be a kind of a mixed bag for these class of taxpayers 5. It affects different people in different income slabs with diverse types of investment choices in a different manner – some may be benefited while other may suffer due to their differing mix of savings and investments 6. Widening income slabs will help the taxpayers with reduction in income tax 7. The proposal to increase the limit for deductions from Rs one lakh to Rs three lakh is a welcome step

By: Rama Krishna Vadlamudi, MUMBAI - [email protected] – Sept. 2, 2009

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8. The new DTC will have no impact on NPS-New Pension System (of the PFRDA) as it is already under the EET system 9. Retirees and Senior citizens will suffer heavily and withdrawal of several concessions and incentives will cause a lot of heartburn to them 10. Withdrawal of deductions of LTC, medical reimbursement and rent-free accommodation will be particularly harsh on salaried class with low/middle incomes (However, one saving grace could be that Central Government employees will be treated on a par with private sector employees. As of now, perks enjoyed by Central Government employees are out of the tax purview) 11. The new tax regime will be very beneficial to taxpayers with annual incomes of Rs 10 lakh and above 12. One silver lining is that only new contributions on or after the commencement of the new Code will be subjected to EET. Withdrawal of accumulated balances as on March 30, 2011 in GPF, PPF, RPF and EPF will not be subject to tax (grandfathering clause). 13. Another small concession provided to individuals/salaried class is that the rollover of any amount received or withdrawn from one account of the permitted savings to any other account with the same or any other permitted savings scheme will not be treated as withdrawal and thereby will not suffer income tax HOW TO TWEAK OUR INVESTMENTS FOR A SMOOTH TRANSITION TO DTC: As the old cliché goes, we need to live with taxes till our death and there is no escape from either of them. As individuals, there is not much we can do about the tax policies. But, collectively, we can impress upon the Government to make suitable changes in the new tax proposals without jeopardising the overall objectives of the DTC. In the light of the new code, individuals and salaried class shall desist from making too many investments in schemes just for the sake of tax incentives – which may prove counterproductive to them in the long-term. A small dose of moderation is imperative and it is important to keep post-tax returns and one’s cash flows in mind while making new investments. Every investment has to be evaluated thoroughly (before investing) so that it can be beneficial even if tax incentives do not exist or are withdrawn at a later date. A little bit of portfolio rebalancing toward the DTC may help the investors in the run-up to the DTC to be implemented from 1.4.2011. Asset allocation and periodical rebalancing will attain more importance from now onwards. The time has come for us to move away from complex and non-investor friendly ULIPs and money-back life insurance policies. We have to shift to pure term insurance policies. At the same time, we shall ensure that the annual premium paid by us on any life insurance policy is less than 5% of the sum assured (in the light of sub-section 3 (a) of section 57 of the proposed DTCB). It is also necessary to remember that if we surrender our policy before the normal expiry date, we have to include the proceeds in our taxable income and pay tax according to our marginal tax rate. Under the new DTC regime, small savings instruments will be losing some of their sheen; but, common investors with little knowledge of complex/structured financial products have no choice but to depend on these savings instruments. However, it would be better for sophisticated investors, with sound knowledge of financial markets and products, to explore the possibility of higher optimal returns through investments that entail no tax benefits. It is, indeed, a big opportunity for several institutions – like, mutual

By: Rama Krishna Vadlamudi, MUMBAI - [email protected] – Sept. 2, 2009

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funds, insurance companies and others to promote their investment avenues – and attract individuals to their products. But, it is going to be a big challenge for them to wean away investors from traditional savings schemes and bank deposits. Agriculture will continue to enjoy its primacy in India as far as tax concessions are concerned. Agriculture seems to be basking in glory due to high support prices being paid by governments for the last four or five years. Now-a-days, farmers have been enjoying their riches flashing expensive cars, high-end mobile sets and spending heavily on interior decoration. Will agriculture continue as a worthy vocation? SUMMARY: Writing an elaborate analysis is the easy part. The most strenuous thing in writing a detailed analysis is summing up the contents. As the impact of DTC is all-encompassing and affects different sections of society in different ways, it’s difficult to condense things in a lucid and understandable way. However, let me make an attempt: The euphoria generated on the first few days after the release of DTC has died down and now the true intentions behind the new Code are being assimilated slowly by all the stakeholders in the country. Perhaps, it is not a good idea to go for drastic changes in our savings and investment process even though the government seems to be keen to push its savers towards a consumption-driven society. It is quite likely that the Government is ready to sacrifice a slice of the high savings rate India enjoys. Consumption-driven economies have their own positives and negatives. In the last two decades or so, the US has experienced both the extremes with salubrious as well as dreadful consequences for the entire world. It is quite possible that the DTC has come at a challenging time for our economy which is plagued with ballooning fiscal deficit, shrinking exports, drought conditions and lower growth rates. Overall, I am of the opinion that the new DTC (if implemented in the current form without any future amendments) is not favourable to the salaried class and individuals with low/middle incomes. It's particularly harsh on senior citizens. It's very detrimental to taxpayers who have heavily invested in life insurance policies, PPF, EPF, VPF, NSCs, two or more houses and other savings instruments. It's very favourable to those people with high incomes. At this point of time, it’s difficult to gauge whether the positives outweigh the negatives under DTC under all circumstances. DTC is also a big negative for the so-called long-term investors in equity shares and equity mutual funds. The amendments to capital gains tax seem to be encouraging PURE GAMBLING and faster churning rather than steady, long-term investments. What a tectonic shift? (It's like asking a mendicant to move away from his frugal lifestyle to a life of a dream boy surrounded by bikini-clad girls a la Richard Branson or Vijay Mallya!). May be, we need to think afresh and view our future investments from a different angle. The time has come for us to evaluate each investment depending on its own merit rather than blindly investing based on just tax considerations. My feeling is that the new DTC regime will be good for youngsters and freshers who are just converting their savings into investments. These newbies can start with a clean slate and appreciate the nuances of DTC in a better manner.

By: Rama Krishna Vadlamudi, MUMBAI - [email protected] – Sept. 2, 2009

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The three most contentious and infuriating issues for individuals and salaried class will be: 1). Moving to an EET regime, 2). Reintroduction of long-term capital gains tax while abolishing STT, and 3). Doing away with tax concessions accorded to housing loan instalments and interest paid on Housing Loan. The Government may have to martial all its energies in order to convince the general public about these aspects. Can the Government muster its political wisdom and implement the DTC in its true fashion? With so many socio-economic issues involved; only time will provide the right answers. The debate has just started and I appeal to all the stakeholders to make their own contribution to the debate in right earnest.

MY FAVOURITE QUOTES "The hardest thing in the world to understand is income tax." Albert Einstein "The avoidance of taxes is the only pursuit that still carries any reward." John Maynard Keynes "Death and taxes and childbirth! There's never any convenient time for any of them." Margaret Mitchell

Abbreviations Used: DDT

Dividend Distribution Tax

LTC

Leave Travel Concession

DTC DTCB

Direct Taxes Code Direct Taxes Code Bill 2009

NPS MAT

New Pension System of the PFRDA Minimum Alternative Tax

DTCDP

Direct Taxes Code – Discussion Paper

NSC

National Savings Certificates VIII issue

EEE EET

Exempt-exempt-exempt Exempt-exempt-taxation

PFRDA PPF

Pension Fund Regulatory and Development Authority Public Provident Fund

ELSS EPF GPF HUF

Equity Linked Savings Scheme Employees Provident Fund Government Provident Fund Hindu Undivided Family

RBA RPF STT VPF

Retirement Benefits Account Recognised Provident Fund Securities Transaction Tax Voluntary Provident Fund

IRDA IT Act

Insurance Regulatory and Development Authority Income Tax Act, 1961

VRS

Voluntary Retirement Scheme

References: Ministry of Finance, Direct Taxes Code, etc.

Author’s Disclaimer: The author’s views are personal. The above article is written for information purpose only. Every care has been taken to provide authentic information as far as possible; however, the author is not responsible for any inadvertent discrepancies that may have crept in. Readers should consult their own certified tax consultants or experts to correctly interpret the provisions of tax laws or other matters.

By: Rama Krishna Vadlamudi, MUMBAI - [email protected] – Sept. 2, 2009

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