Needle Industries (India) Private Limited

I.Recognised Provident Funds:
With effect from 1.4.2009 Income Tax Act recognises only those Provident Funds (other than
Government Provident Funds) which are exempted under section 17 of the Employees Provident Funds
and Miscellaneous Provisions Act 1952. However the Provident Fund Commissioner can give
exemption to an employee or group of employees from joining the government provident fund, subject
to certain terms and conditions, under para 27 and 27A of The Employees' Provident Fund Scheme,
1952.
It is suggested to extend the Income Tax exemption to those provident funds and its members
who are covered under para 27 and 27A of The Employees' Provident Fund Scheme, 1952.
II. Income Tax exemption Limit:
a. Individual income tax exemption limit to be increased to Rs.250,000/-.
b. Exemption limits for conveyance allowance (presently Rs.800.00 per month) and composite hill
compensatory allowance (presently Rs.300.00 per month to all places located at a height of 1,000
meters or more above the sea level except certain notified areas) to be enhanced
c.Exemption for gratuity is to be increased from Rs.350,000.00 to Rs.500,000.00
d.A separate limit under section 80 C to be fixed for repayment of principal amount of housing loan
with a maximum limit of Rs.50,000/- and to retain present exemption limit of Rs.100,000/- for other
payments covered under section 80 C.
e.The exemption limit on medical reimbursement to be enhanced from the present limit of Rs.15000/-
to Rs.25000/-
Increase in the above exemption limits are necessary due to increase in the cost of living.
III. Deposits in foreign currency from EEFC accounts:
Corporates who have EEFC accounts should be allowed to make deposits in foreign currencies which
will earn some interest for them.
This will help the banking system to retian more forex reserves intead of converting into Indian
repees.
IV. Service TAX:
For all exporters exemption to be given from service tax for all services which are related to exports,
instead of applying for refund.
This will elimintae the additional cost of applying for refund, processing refund claims. Further
exporters money will not be locked up with the government.
**
M.Ranganathan,
VPF&CS,
Needle Industries (India) Private Limited,
The Nilgiris.