Breathe easy, taxes won't pinch more

No change in personal income taxes.

What's even better is that no new taxes are being imposed and no new cess too.

Tax payers can breathe easy. So can the savers and spenders. The good news, as the finance minister said in his Budget speech, is that there is no change in personal income taxes. What's even better is that no new taxes are being imposed on individuals. And no new cesses too. Pay up your taxes and we'll leave you alone seems to be the government's message.

Status Quo
The Budget has left not just the income-tax rate untouched, the 2 per cent education cess has not been hiked and the surcharge payable by those with income of over Rs 10 lakh also stays at 10 per cent. And equally important, all your tax-breaks on savings remain intact, and there are some more products to choose from.

This means that you will be left with more money to spend. Spend is what the finance minister wants people to do, judging by the host of products on which excise duties have been cut "" be it footwear or ready-to-eat food! So go and buy that new car that you've been craving for.

One-by-six gone
Life will become a lot easier for those who were forced to file their tax returns under the One-By-Six Scheme. The scheme, which was introduced in 1998-99, with the aim of widening the tax base, has been abolished with effect from April 1, 2006. Hence, no returns will be required to be furnished under this provision for the assessment year 2006-07 and subsequent years.

Tax breaks stay
There's more to cheer about. The finance minister has been equally generous when it comes to savings. Savings through products such as the Public Provident Fund (PPF) or even the Provident Fund (PF) continue to attract tax-breaks because the finance minister has not introduced the much talked about Exempt Exempt Tax (EET) regime.

The government has extended tax breaks to products like fixed deposits of banks with minimum five-year tenure under the ambit of Section 80C. Tax breaks on home loans too remain unchanged.

Tax at source
From April 1, 2007 failure to collect tax at source will attract a penalty. The penalty would be equal to the amount of tax which the person authorised to collect failed to collect at source.

Don't forget pan
However, the government is determined to track down those who may be trying to evade taxes.

The government proposes to issue a Permanent Account Number (PAN), suo moto, if any authority discovers that it has not been mentioned for specific transaction where it is mandatory to do so. The person will be issued a PAN by the assessing officers. The provision would be effective from June 1, 2006. Already a penalty of Rs 10,000 is required to be paid if the PAN is missing.

Penalty for false tan
The Budget has introduced a penalty of Rs 10,000 for false quoting of Tax Deduction Account Number, Tax collection account number, tax deduction and collection account number in challans, certificates and statements, effective from June 1, 2006

FBT rules eased
The government has eased some of the provisions of the Fringe Benefit Tax (FBT). Contributions by employers to superannuation funds for employees up to Rs 100,000 per annum has been exempt from fringe benefit tax. So, employees stand to gain from this. The government hopes to collect Rs 4,000-5,000 crore by way of FBT during the fiscal 2006-07.

TCS, tds returns
With the introduction of quarterly statements, the requirement of furnishing annual Tax collected at source (TCS) and Tax Deducted at source (TDS) has been done away with.