DIRECT TAXES
i. Wealth tax replaced with additional surcharge of 2per cent on super rich with a taxable income of over Rs.1crore annually.
ii. No change in rate of personal income tax.
iii. Transport allowance increased from 800 to 1600 pm.
iv. Proposal to reduce corporate tax from 30% to 25% over the next four years, starting from next financial year.
v. GST to be implemented from next financial year.
vi. Additional investment allowance @15% and additional depreciation @35% to new manufacturing units set up during the period 01-04-2015to31-03-2020 in notified backward areas of Andhra Pradesh and Telangana
vii. Rate of Income tax on royalty and fees for technical services reduced from 25%to10%.
viii. Balance of 50% of additional depreciation @20% for new plant and machinery installed and used for less than six months by a manufacturing unit or a unit engaged in generation and distribution of power is to be allowed immediately in the next year.
ix. Monetary limit for a case to be heard by a single member bench of ITAT increase from Rs.5 lakh to Rs.15 lakh.
x. Domestic transfer pricing threshold limit increased from Rs.5 crore to Rs.20 crore.
xi. Donation made to National Fund for Control of Drug Abuse (NFCDA) to be eligible for 100% deduction u/s 80G of Income-tax Act.
xii. 100% deduction for donations made by any donor to the Swachh Bharat Kosh and to Clean Ganga Fund.
xiii. Evasion of tax in relation to foreign assets to have a punishment of rigorous imprisonment upto 10 years, be non-compoundable, have a penalty rate of 300% and the offender will not be permitted to approach the Settlement Commission.
xiv. Non-filing of return/ filing of return with inadequate disclosures to have a punishment of rigorous imprisonment upto 7 years.
xv. Undisclosed income from any foreign assets to be taxable at the maximum marginal rate.
xvi. Acceptance or re-payment of an advance of Rs. 20,000 or more in cash for purchase of immovable property to be prohibited.
xvii. PAN being made mandatory for any purchase or sale exceeding Rupees 1 lakh
xviii. Exempt-Exempt-Exempt (EEE) tax benefit proposed for assesses having a girl child and investing under the Sukanya Samriddhi Account Scheme. The investments made in the Scheme will be eligible for deduction under section 80C of the Act, the interest accruing on deposits in such account will be exempt from income tax and the withdrawal from the said scheme in accordance with the rules of the said scheme will be exempt from tax.
xix. In view of continuous rise in the cost of medical expenditure, section 80D is proposed to be amended to raise the limit of deduction from Rs. 15,000 to Rs. 25,000. Further, the limit of deduction for senior citizens is also proposed to be increased from Rs. 20,000 to Rs. 30,000.
xx As a welfare measure towards very senior citizens, a deduction under section 80D is proposed for any payment made on account of medical expenditure in respect of a very senior citizen, subject to a limit Rs. 30,000.
xxi. The limit for deduction under section 80DDB is proposed to be increased to Rs. 80,000 in respect of amount paid for medical treatment of very senior citizen.
xxii.. Section 80DD and section 80U is proposed to be amended to increase the limit from Rs. 50,000 to Rs. 75,000 and from Rs. 1 lakh to Rs. 1.25 lakh, as the case may be.
xxiii. In order to promote social security, deduction section 80CCC(1) which provides for deduction of amount paid or deposited to effect or keep in force a contract for any annuity plan of LIC or any other insurer for receiving pension from a fund set up under a pension scheme is proposed to be amended to raise the limit of deduction from Rs. 1 lakh to Rs. 1.5 lakh, within the overall limit provided in section 80CCE.
xxiv. Yoga to be included within the ambit of charitable purpose under Section 2(15) of the Income-tax Act.
xxv.For genuine charitable institutions, modification in ceiling on receipts from activities in the nature of trade, commerce or business to 20% of the total receipts from the existing ceiling of Rs 25lakh.
xxvi. Pradhan Mantri Suraksha Bima Yojna to cover accidental death risk of Rs.2 Lakh for a premium of just Rs.12 per year.
xxvii. Atal Pension Yojana to provide a defined pension, depending on the contribution and the period of contribution. Government to contribute 50% of the beneficiaries’ premium limited to Rs. 1,000 each year, for five years, in the new accounts opened before 31st December 2015.
xxviii. Pradhan Mantri Jeevan Jyoti Bima Yojana to cover both natural and accidental death risk of Rs. 2 lakhs at premium of Rs.330 per year for the age group of 18-50.
INDIRECT TAXES
a. Tariff rate on iron and steel and articles of iron and steel increased from 10% to 15%.
b. Tariff rate on commercial vehicle increased from 10 % to 40%.
c. Basic Custom duty on certain inputs, raw materials, intermediates and components in 22 items, reduced to minimize the impact of duty in version.
d. Excise duty raised to 12.50%. Education cess and the Secondary and Higher education cess to be subsumed in Central Excise Duty.
e. Excise duty exemption for captively consumed intermediate compound coming into existence during the manufacture of agarbathi.
f. Excise duty on chassis for ambulance reduced from 24% to 12.5%.
g. Online central excise and service tax registration to be done in two working days.
h. Excise duty on foot wear with leather upper sand having retail price of more than Rs.1000 per pair reduced to 6%.
i. Time limit for taking CENVAT credit on inputs and input services increased from 6 months to 1year
j. Central excise/Service tax assesses to be allowed to use digitally signed invoices and maintain record electronically.
k. Service-tax plus education cess increased from 12.36% to 14% to facilitate transition to GST.
l. Service-tax to be levied on service provided by way of access to amusement facility, entertainment events or concerts, pageants, non-recoganised sporting events etc.
m. Provision made to exclude all services provided by the Government or local authority to a business entity from the negative list.
n. Service-tax exemption to construction, erection, commissioning or installation of original works pertaining to an airport or port withdrawn.
o. Transportation of agricultural produce to remain exempt from Service-tax.
p. Provision to levy Swachh Bharat cess at a rate of 2% or less on all or certain services, if need arises.
Exempted Services:
a. Service Tax exemption extended to certain pre cold storage services in relation to fruits and vegetables so as to incentivize value addition in crucial sector.
b. Services of pre-conditioning, pre-cooling, ripening etc. of fruits and vegetables.
c. Life insurance service provided by way of Varishtha Pension Bima Yojana.
d. All ambulance services provided to patients.
e. Transport of goods for export by road from factory to land customs station
CA. Kanhaiya Jha
Kanhaiya_ca@yahoo.co.in
CAclubindia
