Under the existing provisions, gifts in cash are taxed but gifts in kind are excluded. Under the proposed provisions, any gift in kind (i.e any property received without consideration or for inadequate consideration) will also be included in the computation of total income of the recepient.
Currently any payment with respect to any expenditure in aggregate made to a single person on a single day exceeding Rs. 20,000/- is not allowed as business expenditure unless the same is paid through an account payee cheque or account payee bank draft :
COMPENSATION ON VOLUNTARY RETIREMENT OR TERMINATION OF SERVICE
Section 89 provided a marginal relief to an assessee where it receives arrears or advance salary. Clause 10(C) of Section 10 provides an exemption of Rs. 5,00,000/- received on voluntary retirement scheme by an employee as the same is in the nature of advance salary. However some tax payers claim both the benefits under Section 10 and Section 89.
Accepting the demands of the corporate sector and industry in general, the Fringe Benefit tax on the value of certain fringe benefits, introduced by the Finance Act, 2005 has been abolished by insertion of Section 115WM.
