Direct Tax Code : second draft

So here comes the another draft of Direct tax code as mentioned in the Budget-2010 by Pranav dada. Its applicable on every tax payer but here I am just putting highlights how it'll affect a service man.

- As of now, 80c includes pension funds, ULIPS, FD, ELSS and other means. But in Direct tax code, FDs and ELSS wouldn't help in reducing tax burdon.

- The first bracket is proposed to be upto 10Lakhs and is subject to a flat applicable tax of 10%(or 20%, to be decided in monsoon session later).

- Another important thing, now tax exemption would be raised upto 3Lakhs and that includes everything from your 80C investments to your home loan interest of 1.5Lakhs.

will keep posting about any updation/addition as it comes.

While switching job..

So, you are looking for a job change or recently switched?? Then read on..

Negotiating your Cost to Company (CTC): Even if the actual CTC is the same as your previous job, structure your CTC so that your cash in hand can be higher than what it might have been at the previous job. This might be particularly important given the new rules announced in the Budget in July 2009 under which fringe benefits offered to you are now going to be taxable in your hands as perquisites. Understand how you can maximize your take home pay, because that is what matters at the end of the day. :)


Form 16 and tax issues: At the end of the financial year take your Form 16 from your previous employer and share that with your new employer, so that the right amount of tax is being deducted and that you are not getting more deductions than you are entitled to. Remember to also take a no dues certificate, relieving letter, salary slips for the duration you have stayed.

Shifting your PF balance and Superannuation: This can be a big administrative issue for you if you have not moved over your retiral accounts to your new firm. Take care of the necessary paperwork to facilitate a smooth transition of your account to your new employer. Form 16 is being used for transfer of PF account. Withdrwal may be another option but remember, its taxable if it has not being maintaioned at least for 5 years.

ESOPs: Don't leave a lot of value on the table if you have worked hard to earn incentives. If your current employer gave you ESOPs, understand if you are eligible to encash these at all. If you are giving up a lot of value because not all your shares have vested, you might want to ask your new employer to offer you similar upside as an incentive to move to the new job.

Insurance: If your current employer was offering you and your family life and health insurance coveragerecognize that you might need this from your new employer as well. Do not remain uninsured during the transition period from one job to another. Accidents and emergencies come unannounced and don't put yourself or your family at risk by not having appropriate insurance coverage. Additionally, understand what are the insurance benefits you will be eligible for at your new job and whether you will have to serve for a minimum few months before your coverage kicks in.