Amendments Applicable for Assessment Year 2016-17 ( Financial Year 2015-16) and all the previous budgets

Budget 2015Assessment Year 2016-17 ( Financial Year 2015-16)

Direct Taxes
2.         Rates of tax
2.1       It is proposed that there will be no change in the rate of personal income-tax and the rate of tax for companies in respect of income earned in the financial year 2015-16, assessable in the assessment year 2016-17.
2.2       It is further proposed to levy a surcharge @12% on individuals, HUFs, AOPs, BOIs, artificial juridical persons, firms, cooperative societies and local authorities having income exceeding ` 1 crore.  Surcharge in the case of domestic companies having income exceeding ` 1 crore and upto ` 10 crore is proposed to be levied @ 7% and surcharge @ 12% is proposed to be levied on domestic companies having income exceeding ` 10 crore.
2.3       It is further proposed that in the case of foreign companies the surcharge will continue to be levied @2% if the income exceeds ` 1 crore and is upto ` 10 crore, and @5% if the income exceeds ` 10 crore.
2.4       It is also proposed to levy a surcharge @12% as against current rate of 10% on additional income-tax payable by companies on distribution of dividends and buyback of shares, or by mutual funds and securitisation trusts on distribution of income.
2.5       The education cess on income-tax @ 2% for fulfilment of the commitment of the Government to provide and finance universalised quality based education and 1% of additional surcharge called ‘Secondary and  Higher Education Cess’ on tax and surcharge is proposed to be continued for the financial year 2015-16 for all taxpayers.
3.         A. Measures to curb black money
3.1       With a view to curbing the generation of black money in real estate, it is proposed to amend the provisions of section 269SS and 269T of the Income-tax Act so as to prohibit acceptance or re-payment of advance in cash of ` 20,000 or more for any transaction in immovable property.  It is also proposed to provide a penalty of an equal amount in case of contravention of such provisions.
3.2       Offence of making false declaration/documents in the transaction of any business relating to Customs (section 132 of the Customs Act) to be predicate offence under PMLA to curb trade based money laundering.
4.         B.  Job creation through revival of growth and investment and promotion of domestic ‘manufacturing’ and ‘Make in India’.
4.1       Taking into account the representations received from various stakeholders and international developments in this regard, it is proposed to defer applicability of General Anti Avoidance Rule (GAAR) by 2 years.  Accordingly, it is proposed to be applicable for income of the financial year 2017-18 (A.Y. 2018-19) and subsequent years.  It is also proposed that the investments made upto 31.03.2017 shall not be subjected to GAAR.
4.2       With a view to streamline the taxation regime of Alternative Investment Funds (AIFs), it is proposed to provide pass through status to all the sub-categories of category-I and also to category-II AIFs governed by the regulations of Securities and Exchange Board of India (SEBI).
4.3       With a view to facilitate relocation of fund managers of offshore funds in India, it is proposed to modify the permanent establishment (PE) norms.
4.4       With a view to give effect to the provisions of section 94 of the Andhra Pradesh Reorganisation Act, 2014, it is proposed to provide an additional investment allowance (@15%) and additional depreciation (@15%) to new manufacturing units set-up during the period 01.04.2015 to 31.03.2020 in notified areas of Andhra Pradesh and Telangana.
4.5       In respect of Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (INViTs), it is proposed to provide that the sponsor will be given the same treatment on offloading of units at the time of listing as would have been available to him if he had offloaded his shareholding of special purpose vehicle (SPV) at the stage of direct listing.  Further, the rental income arising from real estate assets directly held by the REIT is also proposed to be allowed to pass through and to be taxed in the hands of the unit holders of the REIT.
4.6       It is proposed to amend the provisions of section 194LD of the Income-tax Act so as to extend the period of applicability of reduced rate of tax at 5% in respect of income of foreign investors (FIIs and QFIs) from corporate bonds and government securities, from 31.5.2015 to 30.06.2017.
4.7       With a view to obviate the problems faced by small companies and to facilitate the inflow of technology, it is proposed to amend the provisions of section 115A of the Income-tax Act so as to reduce the rate of tax on royalty and fees for technical services from 25% to 10%.
4.8       With a view to facilitating generation of employment, it is proposed to amend the provisions of section 80JJAA of the Income-tax Act so as to provide that tax benefit under the said section shall be available to a ‘person’ deriving profits from manufacture of goods in a factory and paying wages to new regular workmen. The eligibility threshold of minimum 100 workmen is proposed is to reduced to fifty.
4.9       Additional depreciation @ 20% is allowed on new plant and machinery installed by a manufacturing unit or a unit engaged in generation and distribution of power.  However, if the asset is installed after 30th September of the previous year only 10% of the additional depreciation is allowed.  It is proposed to allow the remaining 10% of the additional depreciation in the subsequent previous year.
5.         C.  Minimum government and maximum goverance to improve the ease of doing business
5.1       Section 9 of the Income-tax Act was amended by Finance Act, 2012 to clarify that if an asset, being a share of, or interest, in a company or an entity derives its value, directly or indirectly, substantially from an asset situated in India, the gain arising from transfer of such share or interest shall be taxable in India.   After the clarificatory amendment, a large number of representations were received from various quarters seeking clarification on certain terms used in the amended provisions.  An Expert Committee was also constituted to look into the concerns. Taking into account the recommendations made by the Expert Committee and the concerns raised by the various stakeholders, it is proposed to amend the provisions of the Income-tax Act so as to provide that:-
•     the share or interest shall be deemed to derive its value substantially from the assets located in India, if on the specified date, the value of such assets represents at least fifty per cent of the fair market value of all the assets owned by the company or entity.  However, the indirect transfer provisions would not apply if the value of Indian assets does not exceed ` 10 crore.  Further, the principle of proportionality will apply to the taxation of gains arising from indirect transfer of Indian assets.
•     the Indian entity shall be obligated to furnish information relating to the offshore transactions having the effect of directly or indirectly modifying the ownership structure or control of the Indian company or entity.  In case of non-compliance, a penalty is also proposed.
•     the indirect transfer provisions shall not apply in a case where the transferor of share or interest in a foreign entity, along with his associated enterprises, neither holds the right of control or management nor holds voting power or share capital or interest exceeding five percent. of the total voting power or total share capital in the foreign company or entity, directly or indirectly, holding the Indian assets.
•     the capital gains shall be exempt in respect of transfer of share of a foreign company deriving its value, directly or indirectly, substantially from the shares of an Indian company, under a scheme of amalgamation or demerger.
5.2       It is proposed to amend the provisions of section 92BA of the Income-tax Act so as to increase the threshold limit for applicability of transfer pricing regulations to specified domestic transactions from `5 crore to `20 crore.
5.3       It is proposed to amend the provisions of section 2(15) of the Income-tax Act so as to include ‘yoga’ as a specific category of activity in the definition of ‘charitable purpose’ and also to provide relief for activities in the nature of business undertaken by genuine charitable organizations subject to the condition that aggregate receipts from such activity is less than 20% of the total receipts.
5.4       It is proposed to exempt the income of Core Settlement Guarantee Fund established by Clearing Corporations as per mandate of SEBI.
5.5       It is proposed to amend the provisions of section 255 of the Income-tax Act so as to increase the monetary limit from ` 5 lakh to ` 15 lakh, for a case to be heard by a Single Member Bench of the ITAT.
5.6       It is proposed to amend the provisions of the Income-tax Act so as to provide tax neutrality on transfer of units of a scheme of a Mutual Fund under the process of consolidation of schemes of Mutual Funds as per SEBI Regulations, 1996.
5.7       It is proposed to amend the provisions of the Income-tax Act so as to provide a mechanism to pre-empt the repetitive appeals by the revenue in the same assessee’s case on the same question of law year after year.
5.8       It is proposed to empower the Board to prescribe rules for grant of relief in respect of taxes paid in foreign jurisdictions.
5.9       It is proposed to abolish the levy of Wealth-tax with effect from 2016-17 (Assessment Year) for reducing the compliance burden on the tax payers. The revenue loss on account of such abolition is proposed to be compensated by increase in the existing surcharge by 2% in case of domestic companies and all non corporate taxpayers.
5.10     With a view to rationalise the dispute resolution mechanism available to taxpayer in the form of Settlement Commission, it is proposed to provide that while making an application to the Settlement Commission for an assessment year which has been re-opened by the Assessing Officer, the assessee can make an application for other assessment years in which the proceedings could be re-opened provided the return of income for such assessment years has been furnished by the assessee.
6.         D.  Improving the quality of life and public health through Swachh Bharat Initiatives
6.1       It is proposed to provide that the donations (other than the CSR contributions made in accordance with section 135 of the Companies Act, 2013) made to Swachch Bharat Kosh (by both resident and non-resident) and Clean Ganga Fund (by resident) shall be eligible for 100% deduction under section 80G of the Income-tax Act.
7.         E.  Benefits to middle class taxpayers
With a view to encourage savings and to promote health care among individual taxpayers, a number of measures are proposed to be taken by way of incentives under the Income-tax Act.  The same are enumerated below:-
7.1       It is proposed to provide that investment in Sukanya Samriddhi Scheme will be eligible for deduction u/s 80C and any payment from the scheme shall not be liable to tax.
7.2       It is proposed to increase the limit of deduction u/s 80D of the Income-tax Act from ` 15,000 to ` 25,000 on health insurance premium (in case of senior citizen from ` 20,000 to ` 30,000). It is also proposed to allow deduction of expenditure of similar amount in case of a very senior citizen not eligible to take health insurance.
7.3       It is proposed to increase the limit of deduction in case of very senior citizens u/s 80DDB of the Income-tax Act on expenditure on account of specified diseases from ` 60,000 to ` 80,000.
7.4       It is proposed to increase the limit of deduction u/s 80DD of the Income-tax Act in respect of maintenance, including medical treatment of a dependant who is a person with disability, from ` 50,000 to `75,000.  It is also proposed to increase the limit of deduction from ` 1 lakh to `1.25 lakh in case of severe disability.
7.5       It is proposed to increase the limit of deduction u/s 80U of the Income-tax Act in case of a person with disability, from ` 50,000 to ` 75,000.  It is also proposed to increase the limit of deduction from ` 1 lakh to `1.25 lakh in case of severe disability.
7.6       It is proposed to increase the limit of deduction u/s 80CCC of the Income-tax Act on account of contribution to a pension fund of LIC or IRDA approved insurer from ` 1 lakh to ` 1.5 lakh.
7.7       It is proposed to increase the limit of deduction u/s 80CCD of the Income-tax Act on account of contribution by the employee to National Pension Scheme (NPS) from ` 1 lakh to ` 1.50 lakh.  It is also proposed to provide a deduction of  upto ` 50,000 over and above the limit of ` 1.50 lakh in respect of contributions made to NPS.
7.8       It is proposed to amend the provisions of section 197A of the Income-tax Act so as to provide the facility of filing self-declaration of non-deduction of tax by the recipients of taxable maturity proceeds of life insurance policy.
7.9       Under the existing provisions of the Income-tax Act, an individual buying an immovable property from a resident is required to deduct tax but is not required to obtain TAN for depositing the tax so deducted.  With a view to extend the same facility to an individual or HUF purchasing an immovable property from a non-resident, it is proposed to relax the requirement of obtaining TAN by the individual or HUF who is required to deduct tax on acquisition of immovable property from a non-resident.
7.10     It is proposed to provide that donation made to National Fund for Control of Drug Abuse (NFCDA) shall be eligible for 100% deduction under section 80G of the Income-tax Act.
7.11     Details of tax deductions referred to in para 99.
            ·       Deduction u/s 80C                                           `1,50,000
            ·       Deduction u/s 80CCD                                        `50,000
            ·       Deduction on account of interest
                    on house property loan
                    (Self occupied property)                                  `2,00,000
            ·       Deduction u/s 80D on health  insurance premium        `25,000
            ·       Exemption of transport allowance                      `19,200
                    Total                                                                `4,44,200
8.         F.   Stand alone proposals to maximise benefits to the economy
8.1       It is proposed to provide for chargeability of interest paid by a permanent establishment (PE) or a branch of foreign bank to its Head Office (HO) and other overseas branches under the source rule of taxation and for treating the PE or branch as a taxable entity for computation of income and for purpose of levy of TDS.
8.2       With a view to providing a uniform method of computation of period of stay in Indian for the purposes of determination of ‘resident’ status in the case of a India seafarer, whether working on a Indian-ship or foreign-ship, it is proposed to provide an enabling power to CBDT to prescribe the same in the rules.
8.3       In search cases, it is proposed to allow seized cash to be adjusted towards the assessee’s tax liability under his settlement application.
8.4       With a view to ensuring proper deduction of tax on payments made to non-residents, it is proposed to amend the provisions of section 195 of the Income-tax Act so as to provide for enabling power to the CBDT for capturing information about prescribed foreign remittances which are claimed to be not chargeable to tax

Budget 2014

Increase in Presumptive Income of the taxpayers in the business of Transportation: the taxpayers engaged in the business of transportation having less than 10 vehicles may show their income on presumptive basis. Earlier they have to consider income of Rs. 5,000/- per heavy goods vehicle and Rs. 4,500/- for other vehicles per month. Now Rs. 7,500/- per vehicle per month limit is proposed. The taxpayers disclosing income under this method are not required to maintain the books of accounts and also are not required to get books of accounts audited. But due to increase in the limt, higher amount of tax will have to be paid. This provision is applicable from 1st April 2015 i.e. from assessment year 2015-16.

If TDS is not paid then expenses of 30% will be disallowed instead of 100%: if TDS on expenses like, commission, interest, rent etc. is not deposited with the government in a F.Y. then it was allowed in year of payments. Previously deduction of 100% expenses was not allowed but now onwards expenses of 30% will be disallowed. This provision is applicable from 1st April 2015 i.e. from assessment year 2015-16.   

Now salary and all other expenses are included in disallowance of Expenses due to non-deduction of TDS: Further if TDS on salary, director fees is not deposited with the government as mentioned above, then previously expenditure was allowed but now 30% of expenditure will be disallowed. These TDS proposals will have impact on many business assesses. It means TDS on salary will have to be paid on time and accurately. 

Powers of TDS officer enlarged: TDS officers can visit the office and other premises of the taxpayers for survey and can verify that TDS is deducted at appropriate rates or not. Therefore the proposal of increase in powers of TDS officers is there.

Only One residential house is now allowed under Capital gains: When land, plot, capital assets, etc. is sold, then taxpayer may require paying capital gain tax. But if taxpayer invests in residential house as per the provisions of section 54 and 54F then exemption of tax can be availed. Previously taxpayer can buy more than one residential house and avail exemption but now onwards only one residential house can be purchased to avail the exemption.   It seems that loophole is closed by above proposal.

Forfeited advance in now taxed: If in capital assets transaction advance is taken and transaction is cancelled and advance taken is forfeited then the said income will be treated as Income from Other sources. Earlier they were to reduce the cost of assets.

CSR amount is non-deductible under Income tax Act: The companies having net profit of more than Rs. 5 crore or have turnover of more than Rs. 1000 crore then the companies will have to use 2% of net profits on Corporate Social Responsibility. The deduction of the said expenditure will not be allowed to the companies as the said expenditure is application of income and not expenditure for the purpose of business.

Stringent Proposal for Trusts: If excess income of the trust remained after being used as per provisions of section 11 and 12 then the exemptions were taken under the other provisions of the act. However now exemptions from other sections cannot be availed. For e.g. if hospital is registered under section 11 or 12 then it should not avail the exemptions of section 10. Further the provisions for cancellation of the trust were made stricter. Now running of trust must be according to the provisions otherwise its registration can be cancelled.

Now powers of levying penalty are also given to Transfer Pricing Officer in line with assessing officer.

Rs. 25 Crs or more, new reduced limit for manufacturing sector to claim benefit: If corporate taxpayer purchases new asset i.e, Plant and Machinery, etc. and installed it and its cost is more than Rs. 25 crores then it can claim additional deduction of 15% of the cost of asset in Income Tax with compliance of certain conditions. Earlier limit was Rs. 100 Crs.

In this budget two new concepts of Real Estate Investment Trust and Infrastructure Investment Trust were mentioned. These trusts will work like mutual fund companies. More details awaited

In this budget exchanging of information has been increased between Tax department and others. Now the information asked by the income tax department will have to be given. If the information is not given then penalty may be levied. Due to this the department will now receive more information. Same provisions were also inserted in the Customs and Excise also.



Amendments Applicable for Assessment Year 2015-16 ( Financial Year 2014-15 )




I.        Individual resident aged below 60 years (i.e. born on or after 1st April 1955) or any NRI/ HUF/ AOP/ BOI/ AJP*

Income Slabs
Tax Rates
i.
Where the taxable income does not exceed Rs. 2,50,000/-.
NIL
ii.
Where the taxable income exceeds Rs. 2,50,000/- but does not exceed Rs. 5,00,000/-.
10% of amount by which the taxable income exceeds Rs. 2,50,000/-.
Less ( in case of Resident Individuals only ) : Tax Credit u/s 87A - 10% of taxable income upto a maximum of Rs. 2000/-.
iii.
Where the taxable income exceeds Rs. 5,00,000/- but does not exceed Rs. 10,00,000/-.
Rs. 25,000/- + 20% of the amount by which the taxable income exceeds Rs. 5,00,000/-.
iv.
Where the taxable income exceeds Rs. 10,00,000/-.
Rs. 125,000/- + 30% of the amount by which the taxable income exceeds Rs. 10,00,000/-.
Surcharge : 10% of the Income Tax, where taxable income is more than Rs. 1 crore. (Marginal Relief in Surcharge, if applicable)
Education Cess : 3% of the total of Income Tax and Surcharge.
Abbreviations used :
   
NRI - Non Resident Individual; HUF - Hindu Undivided Family; AOP - Association of Persons; BOI - Body of Individuals; AJP - Artificial Judicial Person


II.        Senior Citizen (Individual resident who is of the age of 60 years or more but below the age of 80 years at any time during the previous year i.e. born on or after 1st April 1934 but before 1st April 1954)

Income Slabs
Tax Rates
i.
Where the taxable income does not exceed Rs. 3,00,000/-.
NIL
ii.
Where the taxable income exceeds Rs. 3,00,000/- but does not exceed Rs. 5,00,000/-
10% of the amount by which the taxable income exceeds Rs. 3,00,000/-.
Less : Tax Credit u/s 87A - 10% of taxable income upto a maximum of Rs. 2000/-.
iii.
Where the taxable income exceeds Rs. 5,00,000/- but does not exceed Rs. 10,00,000/-
Rs. 20,000/- + 20% of the amount by which the taxable income exceeds Rs. 5,00,000/-.
iv.
Where the taxable income exceeds Rs. 10,00,000/-
Rs. 120,000/- + 30% of the amount by which the taxable income exceeds Rs. 10,00,000/-.
Surcharge : 10% of the Income Tax, where taxable income is more than Rs. 1 crore. (Marginal Relief in Surcharge, if applicable)
Education Cess : 3% of the total of Income Tax and Surcharge.


III.        Super Senior Citizen (Individual resident who is of the age of 80 years or more at any time during the previous year i.e. born before 1st April 1934)

Income Slabs
Tax Rates
i.
Where the taxable income does not exceed Rs. 5,00,000/-.
NIL
ii.
Where the taxable income exceeds Rs. 5,00,000/- but does not exceed Rs. 10,00,000/-
20% of the amount by which the taxable income exceeds Rs. 5,00,000/-.
iii.
Where the taxable income exceeds Rs. 10,00,000/-
Rs. 100,000/- + 30% of the amount by which the taxable income exceeds Rs. 10,00,000/-.
Surcharge : 10% of the Income Tax, where taxable income is more than Rs. 1 crore. (Marginal Relief in Surcharge, if applicable)
Education Cess : 3% of the total of Income Tax and Surcharge.


IV.        Co-operative Society

Income Slabs
Tax Rates
i.
Where the taxable income does not exceed Rs. 10,000/-.
10% of the income.
ii.
Where the taxable income exceeds Rs. 10,000/- but does not exceed Rs. 20,000/-.
Rs. 1,000/- + 20% of income in excess of Rs. 10,000/-.
iii.
Where the taxable income exceeds Rs. 20,000/-
Rs. 3.000/- + 30% of the amount by which the taxable income exceeds Rs. 20,000/-.
Surcharge : 10% of the Income Tax, where taxable income is more than Rs. 1 crore. (Marginal Relief in Surcharge, if applicable)
Education Cess : 3% of the total of Income Tax and Surcharge.


V.        Firm
Income Tax : 30% of taxable income.
Surcharge : 10% of the Income Tax, where taxable income is more than Rs. 1 crore. (Marginal Relief in Surcharge, if applicable)
Education Cess : 3% of the total of Income Tax and Surcharge.


VI.        Local Authority
Income Tax : 30% of taxable income.
Surcharge : 10% of the Income Tax, where taxable income is more than Rs. 1 crore. (Marginal Relief in Surcharge, if applicable)
Education Cess : 3% of the total of Income Tax and Surcharge.


VII.        Domestic Company
Income Tax : 30% of taxable income.
Surcharge : The amount of income tax as computed in accordance with above rates, and after being reduced by the amount of tax rebate shall be increased by a surcharge
·            At the rate of 5% of such income tax, provided that the taxable income exceeds Rs. 1 crore. (Marginal Relief in Surcharge, if applicable)
·            At the rate of 10% of such income tax, provided that the taxable income exceeds Rs. 10 crores.
Education Cess : 3% of the total of Income Tax and Surcharge.


VIII.        Company other than a Domestic Company
·            @ 50% of on so much of the taxable income as consist of (a) royalties received from Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 31st day of March, 1961 but before the 1st day of April, 1976; or (b) fees for rendering technical services received from Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 29th day of February, 1964 but before the 1st day of April, 1976, and where such agreement has, in either case, been approved by the Central Government.
·            @ 40% of the balance
Surcharge :
The amount of income tax as computed in accordance with above rates, and after being reduced by the amount of tax rebate shall be increased by a surcharge as under
·            At the rate of 2% of such income tax, provided that the taxable income exceeds Rs. 1 crore. (Marginal Relief in Surcharge, if applicable)
·            At the rate of 5% of such income tax, provided that the taxable income exceeds Rs. 10 crores.

Education Cess : 3% of the total of Income Tax and Surcharge.
Marginal Relief in Surcharge
When an assessee's taxable income exceeds Rs. 1 crore, he is liable to pay Surcharge at prescribed rates mentioned above on Income Tax payable by him. However, the amount of Income Tax and Surcharge shall not increase the amount of income tax payable on a taxable income of Rs. 1 crore by more than the amount of increase in taxable income.
Example :
In case of an individual assesseee (< 60 years) having taxable income of Rs. 1,00,01,000/-
1.
Income Tax
Rs. 28,30,300
2.
Surcharge @10% of Income Tax
Rs. 2,83,030
3.
Income Tax on income of Rs. 1 crore
Rs. 28,30,000
4.
Maximum Surcharge payable
(Income over Rs. 1 crore less income tax on income over Rs. 1 crore)
Rs. 700/- (1000 - 300)
5.
Income Tax + Surcharge payable
Rs. 28,31,000
6.
Marginal Relief in Surcharge
Rs. 2,82,330/- (2,83,030 - 700)

Interim Budget 2014

Finance Minister P Chidambaram presented the Interim Budget for 2014 on 17.2.2014.Here are the key 10 takeaways from Interim Budget 2014
1) Fiscal deficit for FY14 to be contained at 4.6% of GDP; FY15 target at 4.1% 
2) FY14 Current Account Deficit seen at $45 bn
3) FY14 Q3 & Q4 GDP growth to be at least 5.2%
4) Excise cut on capital goods cut from 12% to 10% 
5) Excise duty cut on small cars and two wheelers reduced from 12% to 8% 
6) Excise duty for SUVs cut from 30% to 24% 
7) Excise duty for large and mid-segment cars cut to 20%
8) Excise duty on consumer durables cut from 12% to 10%
9) Rs 11,200 crore capital infusion in PSU banks
10) Rs 2,600 crore for education loan moratorium, to benefit 9 lakh borrowers for loans taken before March 31, 2009.
 He claiming that he has managed to fulfill his promise of keeping both the fiscal deficit and the current account deficit for FY14 under control.


Budget 2013 :Amendments Applicable for Assessment Year 2014-15 ( Financial Year 2013-14 )


Corporate Income Tax Rates for Financial Year 2013-14  :-


Particulars

IT


SC

EC

SHEC

Total

If Net Income does not exceed Rs. 1 Cr.


30%

NIL

2%

1%

30.90%


If Net Income in the range of Rs. 1 Cr. – Rs. 10 Cr.


30%

5%


2%

1%

32.445%

If Net Income exceeds Rs. 10 Cr.


30%

10%


2%

1%

33.99%



Section 115JB :- Minimum Alternate Tax (MAT) Rate :-

In the Case of domestic company:


Particulars

IT


SC

EC

SHEC

Total

If Net Income does not exceed Rs. 1 Cr.


18.5%

NIL

2%

1%

19.055%


If Net Income in the range of Rs. 1 Cr. – Rs. 10 Cr.


18.5%

5%


2%

1%

20.00775%

If Net Income exceeds Rs. 10 Cr.


18.5%

10%


2%

1%

20.9605%




Section 115-O :- Dividend Distribution Tax (DDT) :



IT


SC

EC

SHEC

Total

15%

10%


2%

1%

16.995%

Income Tax Rates applicable for Individual assessee:


Particulars


Exemption Limit

Tax Rate @10%

Tax Rate @20%

Tax Rate @30%


Resident Women & Any other Resident Individual


Upto Rs.2,00,000

Rs.2,00,001 to Rs.5,00,000

Rs.5,00,001 to Rs.10,00,000

Rs. 10,00,001 and above

Senior Citizen aged above 60 years and below 80 years
(i.e.born during 01.04.1934 to 31.03.1954)


Upto Rs.2,50,000

Rs.2,50,001 to Rs.5,00,000

Rs.5,00,001 to Rs.10,00,000

Rs. 10,00,001 and above


Senior Citizen aged above 80 years (i.e. born before 01.04.1934)


Upto Rs.5,00,000


NIL

Rs.5,00,001 to Rs.10,00,000

Rs. 10,00,001 and above


  • Surcharge @ 10% is applicable if net income exceeds Rs. 1 Crore.
  • Individual whose net income does not exceed Rs. 5,00,000/-is entitled for rebate u/s 87A for 100% Income tax or Rs. 2,000/- whichever is less.




Section 10(34A) :- Income of a shareholder on account of buy back of shares of unlisted company :-

Income arising to the shareholder in respect of buy back of unlisted shares by the company will be exempt from tax under section 10(34A) from the A.Y.2014-15.

Tax on distributed income of domestic company u/s 115QA for buy back of unlisted shares is applicable from June 1, 2013 @ 22.66%. This tax is to be paid by the company and therefore shareholder not to offer income on buy back of unlisted shares.


Section 32AC : Investment allowance for acquisition and installation of new plant and machinery :-

Section 32AC has been inserted to provide for investment allowance in order to encourage substantial investment in new plant and machinery. Investment allowance will be in addition to depreciation. Conditions to avail Investment allowance:-
  1. The assessee is a company.
  2. It is engaged in the business of manufacture or production of any article or thing.
  3. It has acquired and installed a “ new assets”. New assets does not include plant and machinery used earlier within or outside India. It does not include plant and machinery installed in any office premises or any residential accommodation including accommodation in the nature of guest house, any office appliances including computers or computer software, any vehicle, ship or aircraft. The new assets should be acquired and installed after March 31, 2013 but before April 1, 2015.
  4. The aggregate amount of actual cost of such new asset should be more than Rs. 100 Cr.

Investment allowance is 15% of Actual cost of new assets. It is available in the first year of addition of the new assets.


Section 43(5)(e) :- Trading in commodity derivatives – not to be treated as speculative transaction

Section 43(5) has been amended w.e.f. from A.Y.2014-15 to provide that an eligible transaction in respect of trading in commodity derivatives carried out in a recognized association, shall not be treated as a speculative transaction.

Section 80EE : - Deduction in respect of interest on loan taken for residential house property  :-

The deduction under this section is available to the assessee where the housing loan has been availed during April 1, 2013 and March 31, 2014. In this case, the amount of loan sanctioned should not exceed Rs. 25 lacs and the value of residential house property should not exceed Rs. 40 Lacs, Deduction is available in respect of interest payable on the above loan or Rs. 1 Lacs whichever is less.


Section 139 : - Return without self assessment tax to be treated as defective return :-

Section 139 has been amended w.e.f. June 1 , 2013 to provide that the return of income  to be called defective if the taxes due has not been paid along with interest before filing of income tax return.

Section 194 IA :- TDS on purchase of immovable property :-

This section is inserted w.e.f. June 1, 2013. Any person responsible for paying to a resident transferor any sum by way of consideration for transfer of any immovable property ( other than agriculture land in rural area) is liable to deduct TDS @ 1 percent if the consideration is more than Rs. 50 Lacs.

Budget 2009
Highlights of  Direct Tax Proposals 2009-10
(To be effective from Assessment year 2010-11 unless otherwise specified)
1.       BASIC EXEMPTION
The basic exemption limit has been increased as under:
(a)     For Individuals, HUFs & AOP                             Rs. 1,60,000/-
(b)     For Women                                                                   Rs. 1,90,000/-
(c)     For Senior Citizen                                                        Rs. 2,40,000/-
2.       TAX RATES
(i)                   INDIVIDUAL / HUF / AOP
(a)     There is no change in the Tax Rate for both Corporate and Non-Corporate Assessees. However, there is a change in the income-slab and tax rates for individuals, HUFs & AOP as under:-
For Individuals, HUFs,AOPs
For Women
For Senior Citizen
Income Slab

Tax Rate
Income Slab
Tax Rate
Income Slab
Tax Rate
Upto Rs. 1,60,000/-

NIL
Upto Rs. 1,90,000/-
NIL
Upto Rs. 2,40,000/-
NIL
From Rs. 1,60,001/- to Rs. 3,00,000/-
10%
From Rs. 1,90,001/- to Rs. 3,00,000/-
10%
From Rs. 2,40,001/- to Rs. 3,00,000/-
10%
From Rs. 3,00,001/- to Rs. 5,00,000/-
20%
Above Rs. 5,00,000/-
30%
(b)     No Surcharge will be payable on income tax.
(c)     Education Cess @ 3% will continue to be levied as per last year.
(ii)                 FIRMS
(a)     The Surcharge @ 10% on income tax has been abolished. However, education cess @ 3% will continue to be levied as per last year.
(b)     The limits for payment of remuneration to working partners by a partnership firm under section 40(b)(v) have been increased substantially. It is also proposed to prescribe uniform limits for both professional and non-professional firms. The revised limits are:
Book-Profit
Limits for Remmuneration
(i)                   On the First Rs. 3,00,000/- of the Book Profit or in case of loss.
(ii)                 On the balance of the Book Profit
Rs. 1,50,000/- or at the rate of 90% of the Book Profit, whichever is more.
At the rate of 60%

(iii)                COMPANIES
(a)     There is no change in the Corporate tax rates.
(b)     The rate of Minimum Alternate Tax (MAT) on book profit of a company has been increased from 10% to 15%. However, the period of tax credit has been extended from 7 years to 10 years.
(c)     In computation of book profit for calculation of MAT, the provision for diminution in the value of any asset (e.g. provision for bad & doubtful debts, etc.) will be added with retrospective effect from Asst. Year 1998-99 to the Book Profit, if already debited to Profit & Loss Account.
3.       ADVANCE TAX
The threshold limit for payment of advance tax has been raised from Rs. 5,000/- to              Rs. 10,000/- with effect from Asst. Year 2009-10
4.       WEALTH TAX
The basic exemption limit of wealth tax has been increased from Rs. 15 lacs to Rs. 30 lacs.
5.       FRINGE BENEFIT TAX (FBT)
(a)     Fringe Benefit Tax has been abolished with effect from Asst. Year 2010-11.
(b)     However, new rules for valuation of perquisites will be notified for taxability in the hands of employees.
6.       TAX DEDUCTED AT SOURCE
(a)     The provisions relating to tax deducted at source has been rationalized from 1st October, 2009. The rate of tax deducted at source on payments to Residents other than salary will not include surcharge and education cess. However, TDS on salary payments will continue to attract education cess.
(b)     The difference between payments to contractor & sub-contractors has been dispensed with. The different rates applicable to advertising contracts have also been streamlined.
(c)     In case of payments to Contractors being individuals & HUF, the single rate of TDS @ 1% will be applicable.
(d)     In case of payments to contractors other than Individual & HUF, the single rate of TDS @ 2% will be applicable.
(e)      The new rates of TDS are:
(i)                   RENT PAYMENTS (Sec. 194-I)
NEW RATES
OLD RATES
(a)     For Plant, Machinery or Equipments
(b)     For Land, Building, Furniture to an Individual and HUF
(c)     For Land, Building, Furniture to a person other than an Individual or HUF
2%
10%

10%
10%
15%

20%
(ii)                 CONTRACT PAYMENTS (Sec 194C)


(a)     To Individual / HUF Contractor
(b)     To person other than Individual / HUF Contractor
(c)     To  Individual / HUF Sub-Contractor
(d)     To person other than Individual / HUF Sub-Contractor
(e)     To Individual / HUF Contractor / Sub-Contractor for advertising
(f)      To person other than Individual / HUF Contractor / Sub-Contractor for advertising
(g)     To Contractor in transport business
(h)     To Sub-Contractor in transport business
1%
2%

1%
2%

1%

2%

NIL *
NIL *
2%
2%

1%
1%

1%

1%

2%
1%
·         This nil rate will be applicable only if the transporter furnishes his PAN.
·         If PAN is not quoted the rate will be 1% for an individual / HUF transporter and 2% for other transporters upto 31.03.2010.
·         If however, PAN is not quoted by the deductee, the rate of TDS will be 20% in all cases, with effect from 1st April, 2010.
(f)      WORKS CONTRACT
“Work” shall not include manufacturing or supplying of an article or product according to    the requirement or specification of a customer by using raw material purchased from a person other than such customer as if such a contract is a contract for “Sale”.
In case of other works contract, TDS shall be deducted on the invoice value excluding the value of material purchased from such customer if such value of materials is mentioned separately in the invoice. Where the material component has not been separately mentioned in the invoice, TDS shall be deducted on the whole of the invoice value.
(g)     Assessment
Now the TDS assessment will also be done on computerized processing system, determining the sum payable or refund due as the case may be.
(h)      A time limit has been prescribed for issuing intimation for all TDS statements within one year from the end of the financial year in which the statement is filed.
(i)       Filing of TDS returns
The present system of Quarterly filing of TDS / TCS return has been amended w.e.f. 01/10/2009. The Govt. will prescribe periodicity of TDS / TCS returns, form & manner thereof.
7.       CHARITABLE TRUST
(a)     Charitable purpose now includes preservation of environment (including water shed forests and wildlife) and preservation of monuments or places or objects of artistic or historic interest.
(b)     Anonymous donation to wholly religious trusts will continue to be exempt from Tax. For partly religious and partly charitable trusts and in case of wholly charitable trust, now anonymous donation in excess of 5% of total income of such institution or Rs. 1,00,000/- , whichever is higher shall be taxable.
(c)     The maximum year of eligibility of approval u/s. 80G (hitherto five years) has been dispensed with.
(d)     Donors to Charitable Trusts carrying on commercial activity as defined u/s. 2(15) will continue to be eligible for 80G deduction for Asst. Year 2009-10 provided the trust is approved u/s. 80G (5) for the Asst. Year 2008-09.
(e)     Trusts/ Institutions u/s. 10(23C) i.e. schools, hospitals with gross receipts of rupees one crore or above can now make application for notification upto 30th September of the Asst. Year. Earlier the time limit was upto 31st March of the previous year.

8.       EXEMPTIONS & DEDUCTIONS
(I)                   Industrial Undertakings in Free Trade Zones (Sec.10A) and 100% Export oriented undertaking (Sec. 10B) will continue to enjoy exemption upto Asst. Year 2011-12 (i.e. one more year).
(II)                 Power Generation / Transmission Units will enjoy tax holiday u/s. 80-IA upto Asst. Year 2011-12
(III)                The limit of deduction u/s. 80DD of Rs. 75,000/- for medical expenses for disabled dependents per person has been increased to Rs. 1,00,000/-.
(IV)               The deduction for interest on loan u/s. 80E for higher education has been extended to any course of study pursued after Class XII.
(V)                 The weighted deduction @ 150% on in-house research and development expenditure will be allowed to a company engaged in the manufacture or production of any article except those items specified in the Eleventh schedule. However, the research and development facilities shall have to be approved by the Dept. of Scientific and Industrial Research, Govt. of India (Sec. 35).
(VI)               CASH PAYMENTS TO TRANSPORTERS
Section 40A (3) relating to payments in cash have been amended. Now payments in cash upto Rs. 35,000/- in place of present limit of Rs. 20,000/- can be made to transporters

(VII)              DEPRECIATION
In case of assesssees earning composite income i.e. both taxable and exempt income (e.g. tea garden) while calculating the WDV, the depreciation allowed for determining the composite income shall be deemed to have been actually allowed for calculating WDV.
  
9.       INVESTMENT LINKED DEDUCTION
(a)     A new section 35AD has been introduced to allow 100% deduction on Capital expenditure  (other than land, Goodwill etc.) incurred for the following business:
(I)       Cold Chain Facilities for agricultural, forest, dairy products, etc.
(II)     Warehousing Facilities for agricultural produce.
(III)    Cross Country natural gas or oil pipeline network for storage and distribution. 

(b)     Loss of such units will not be allowed to be set off against other business.

10.    PRESUMPTIVE TAXATION
(A)    BUSINESS OTHER THAN GOODS CARRIAGE
The concept of “Presumptive Taxation” for retail business has been extended to all businesses carried on by an Individual, HUF and Partnership Firm other than LLP with effect from Asst. Year 2011-12 subject to following conditions:
(a)     The turnover / gross receipts should not exceed Rs. 40 lakhs.
(b)     The assessee claiming the income based deduction under chapter VI A and Chapter III are not eligible. Aaccordingly deduction u/s. 80C (LIP, NSC, PPF, etc) will be allowed, though falling under chapter VI A.
(c)     Goods transport business will not be eligible for the scheme.
(d)     The presumptive rate of income will be 8% of the gross turnover / receipts.
(e)     The assessee opting for the scheme will not be required to maintain the books of account for this business.
(f)      Assessee claiming profit less than 8% of the gross turnover / receipts will be required to maintain books of accounts and will be subject to Tax Audit also.
(g)     Not required to pay advance tax.
(B)     GOODS CARRIAGE BUSINESS
The existing rates of presumptive income for goods carriage (transporters) upto 10 (ten) trucks has been revised as under:
       Vehicle
Existing Rates
Proposed Rates (w.e.f. Asst. Year 2011-12)
(a)    Heavy goods

(b)    Other than heavy goods

Rs. 3,500/-

Rs. 3,150/-
Rs. 5,000/-

Rs. 4,500/-
                                                                  (per truck per month)




11.   
PURPORTED GIFTS
(a)     Under the existing provisions relating to Individual and HUFs, cash gifts upto Rs. 50,000/- in a year from any person other than relative are exempt u/s. 56(2)(vi). Now the above provisions are proposed to be extended to gifts in kind (e.g. immovable property, shares, drawings, paintings, jewelleries, etc.) with effect from 1st October, 2009. Further, the transfer of immovable properties and aforesaid movable properties for inadequate consideration beyond Rs. 50,000/- will also be deemed to be purported gifts in the hands of the recipient.
(b)     For immovable properties the value adopted by the stamp valuation authority will be considered. For other properties, the valuation method will be prescribed by the Govt.

12.    LIMITED LIABILITY PARTNERSHIP (LLP)
(a)     The taxability of LLP has been prescribed. The term “Firm”, “Partnership” and “Partner” will now include LLP as defined under the LLP Act, 2008. Consequently the taxation of LLP will be at par with the Partnership Firm.
(b)     The I.T return of LLP is to be signed by the designated partner. In other cases, it may be signed by any partner.
(c)     Where the tax liability of LLP cannot be recovered, every partner in default will be jointly and severally  liable (Sec. 167C)

13.    ASSESSMENT PROCEEDINGS
The Assessing officer may now assess / reassess any income in respect of any issue which come to his notice during the course of re-assessment proceedings u/s. 147 even if no reason was recorded for such issue. The amendment is retrospective from Asst. Year 1989-90.

14.    PENALTY PROCEEDINGS IN SEARCH & SEIZURE
A vital change in the perception of penalty proceedings in case of search operations has been brought in with retrospective effect from 1st June, 2007. The penalty for concealment will be attracted in the following cases:
(a)     Where the return has been filed, but the income though recorded in the books of accounts are not incorporated in such returns.
(b)     Where the income is duly recorded in the books of accounts, but no return has been filed till the date of search and the due date as specified u/s.139 (1) for filing of return for such previous year has expired.

15.    ELECTORAL TRUST
With a view of reforming the system of funding of political parties, Electoral Trust can now be set up. The Electoral Trust shall function in accordance with the rules to be framed by the Central Govt. In order to get exemption from tax for voluntary donations received, such trust will be required to distribute 95% of the aggregate donations received by it to any Political Party.  The contribution made to such trust shall be eligible for 100% deduction u/s. 80GGB and u/s. 80GGC by companies and any other person respectively.
SERVICE TAX
              Following services have been brought under Service Tax net:
1.       Service provided in relation to transport of goods by rail
2.       Service provided in relation to transport of coastal cargo: and goods through inland water including National Waterways
3.       Advice, consultancy or technical assistance provided in the field of law (this tax would not be applicable in case the service provider or service receiver is an individual).
4.       Cosmetic and plastic surgery service
Exemptions provided:
1.       Exemptions from service tax being provided to inter-State or intra –State transportation of passengers in a vehicle bearing ‘Contract Carriage Permit’ with specified conditions.
2.       Exemption from service tax (leviable under Banking and other financial services or under Foreign exchange broking service) being provided to inter-bank purchase and sale of foreign currency between scheduled banks.
3.       Two taxable services, namely,’ Transport of goods through road’ and ‘Commission paid to foreign agents’ to be exempted from the levy of service tax, if the exporter is liable to pay service tax on reverse charge basis. However, present cap of 10% on commission agency charges is retained. Thus there would be no need for the exporter to first pay the tax and later claim refund in respect of these services.
4.       For other services by exporters, services tax exemption to be operated through the existing refund mechanism based on self-certification of the documents where such refund is below 0.25 per cent of FOB value, and certification of the documents by a Chartered Accountants for value of refund exceeding the above limit.
5.       Export Promotion Council and the Federation of Indian Export Organizations (FIEO) to be exempt from service tax on the membership and other fees collected by them till 31st March 2010.


Budget 2007  


Points to note are Sectoral sops , ESOPS and some future promises .

Sectoral soaps are related to excise duty on cement,import duty on gems,export duty on iron ore.

FBT on ESOPs will now be levied on the date of vesting of options.

The promises for future are review of Banking Cash Transaction tax,GST by 2010,further pruning and eventual phasing out of exemptions.