Old wine in new bottle
Old wine in new bottle- though six by six has gone new proviso wants persons with no taxable income to file return if he exempt by virtue of deduction under chapter VI-A
When one by six Rule have been abolished with much fanfare we were all very delighted and have greeted the decision cheerfully but the new proviso inserted by the Finance Act, 2005, with effect from April 1, 2006, has a different story to tell .It says that an individual or a Hindu Undivided Family (HUF), having a total income before availing the benefit of exemption under Section 10A, 10B or 10BA or deductions under Chapter VI-A exceeding the maximum exempt amount, will have to furnish return on or before the due date in the prescribed form voluntarily. Well 'voluntarily is tricky term . When it is provided in law where is the scope any excising any individual wish or aspirations .
Now let us first get a clear idea about what it means by maximum limits . We all know that exemption limit for senior citizens is Rs. 1.85 lakh , for women it is Rs. 1.35 lakh and for kothers Rs. 1 lakh . These are actually maximum limits one can enjoy if he or she has resources for investment for purpose of claiming exemption under Section 10A, 10B or 10BA or deductions under Chapter VI-A . So target for the new proviso are those cases where the income becomes taxable before taking into account these exemptions. So without these exemption all those whose income is more than Rs 50,000 comes under this provision because upto Rs 50,000/- income tax is nil .
In effect one by six rule has been given a fresh lease of life through back door.
However the consolation is that the penalty of Rs. 5,000 under Sec. 271F for not filing a non-taxable voluntary return is leviable only if it is not so filed before the end of the relevant assessment year, i.e.. March 31, 2007, without attracting penalty.
Tarun Majumder
IndianTaxSolutions.Com
When one by six Rule have been abolished with much fanfare we were all very delighted and have greeted the decision cheerfully but the new proviso inserted by the Finance Act, 2005, with effect from April 1, 2006, has a different story to tell .It says that an individual or a Hindu Undivided Family (HUF), having a total income before availing the benefit of exemption under Section 10A, 10B or 10BA or deductions under Chapter VI-A exceeding the maximum exempt amount, will have to furnish return on or before the due date in the prescribed form voluntarily. Well 'voluntarily is tricky term . When it is provided in law where is the scope any excising any individual wish or aspirations .
Now let us first get a clear idea about what it means by maximum limits . We all know that exemption limit for senior citizens is Rs. 1.85 lakh , for women it is Rs. 1.35 lakh and for kothers Rs. 1 lakh . These are actually maximum limits one can enjoy if he or she has resources for investment for purpose of claiming exemption under Section 10A, 10B or 10BA or deductions under Chapter VI-A . So target for the new proviso are those cases where the income becomes taxable before taking into account these exemptions. So without these exemption all those whose income is more than Rs 50,000 comes under this provision because upto Rs 50,000/- income tax is nil .
In effect one by six rule has been given a fresh lease of life through back door.
However the consolation is that the penalty of Rs. 5,000 under Sec. 271F for not filing a non-taxable voluntary return is leviable only if it is not so filed before the end of the relevant assessment year, i.e.. March 31, 2007, without attracting penalty.
Tarun Majumder
IndianTaxSolutions.Com
posted by TARUN MAJUMDER @ 3:12 PM
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