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Dear All,

I Was Reading Budget Synopsis, Budget Summary, Budget Views.

But Didn't Found Some Proposal (We Can Say Them Hidden), That Were No Where Discussed.

Just Want to Highlights Points Which are really Hidden.

Hidden proposal I --in Income Tax Act 1961 by Finance Bill 2013

Under the existing provisions of section 56, the transfer of immoveable properties (stamp value of which exceeds Rs.50,000) without consideration is treated as income in the hands of recipient but transfer of such property for inadequate consideration is outside the ambit of such provisions.

It is now proposed that if the consideration for transfer of such property is less than the stamp duty value of the property by an amount exceeding Rs.50,000/-then the difference between the stamp duty value and the stated consideration shall be treated as income of the recipient. 

For example, the stamp duty value of the property is one lakh while the consideration for transfer is Rs.30,000/-. The difference of Rs.70,000/- shall be deemed income of the recipient.

However, it is also proposed that where the date of agreement and date of registering the document is different then, stamp duty value would be taken as on the date of agreement provided such consideration or part thereof had been paid by any mode other than cash on or before the date of agreement.

Necessary amendment is being proposed in section 56.

Hidden proposal II --in Income Tax Act 1961 by Finance Bill 2013

Agricultural income & capital gain on agricultural land:

Under the existing provisions, the distance from the limits of the municipality is to be measured by road. It is now proposed that distance is to be measured aerially. How the aerial distance will be calculated is not prescribed.

Further, under the proposed amendment, the distance from the municipality shall now be 2 KM from the local limits of municipality having population of more than 10000 but not exceeding one lakh; 6 KM from the local limits of municipality having population of more than one lakh but not exceeding ten lakhs; and 8 KM from the local limits of municipality having population of more than 10 lakhs. (The necessary amendments have been made in sections 2(1A) & 2(14))

Hidden proposal III --in Income Tax Act 1961 by Finance Bill 2013

Under the existing provisions, the provisions of section 50C are applicable only to the transfer of capital assets. Such provisions are not applicable to sale or transfer of immoveable properties by a person engaged in the business of real estate. It is now proposed to insert section 43CA, similar to section 50C, so as to apply such deeming provisions to the transactions of transfer of immoveable properties by a person engaged in the business of real estate. For example, if the builder transfers a flat to the buyer at a consideration of Rs.30 lakhs but value for the purpose of stamp duty is taken at Rs.35 lakhs then, the profit of the builder shall be computed as if the sale consideration is Rs.35 lakhs. It is also proposed that the existing provisions of section 50C(2) will apply to such transactions also. However, it is also proposed that where the date of agreement and date of registering the document is different then, stamp duty value would be taken as on the date of agreement provided such consideration or part thereof had been paid by any mode other than cash on or before the date of agreement.

Hidden proposal IV --in Income Tax Act 1961 by Finance Bill 2013

Proposed amendment relating to donations. Under the existing provisions of section 80G, donations to the National Children Fund are allowed to the extent of 50%. It is now proposed to allow the entire amount as deduction. It is further proposed that the deductions on account of donations to political parties or an electoral trust allowable u/s 80GGB or 80GGC shall not be allowed henceforth if paid in cash.

Hidden proposal V --in Income Tax Act 1961 by Finance Bill 2013

Under the existing provisions of section 80JJA, deduction is allowed where the profits are derived from manufacture or production of article or thing in an industrial undertaking.  It is now proposed that such deduction would be allowed only if profits are derived from manufacture of goods in a factory as defined in section 2(m) of Factories Act 1948.  Further, Under the existing provisions, the above deduction is not allowable if the industrial undertaking is formed by splitting up or reconstruction of existing industrial undertaking or amalgamation with another industrial undertaking. It is now proposed that the above deduction shall not be allowable if the factory is hived off or transferred from another existing entity or acquired by the assessee co as a result of amalgamation with another co.

Hidden proposal VI --in Income Tax Act 1961 by Finance Bill 2013

The existing provisions of sections 167C & 179 of the Act provide that the tax due from the LLP and private Ltd. co can also be recovered from the partners/directors under certain circumstances mentioned therein. Now it is proposed that for the purpose of these sections, the words “tax due” shall include interest, penalty and any other sum payable under the Act.

Thanks & Regards

CA Ayush Agrawal

http://ayushagrawal.wordpress.com

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