Here are certain tax implications after budget 2014.
New Slab Rates
1) For Individuals HUF and Body of Individuals
Up to 2,50,000- Nil
2,50,001 - 5,00,000- 10%
10,00,000 and above- 30%
2) For Senior Citizens
Up to 3,00,00- Nil
3,00,001 - 5,00,000- 10%
5,00,001- 10,00,000- 20%
Above 10,00,000- 30%
3) Senior Citizen age over 80 years
5,00,000 - Nil
5,00,001 - 10,00,000- 20%
10,00,001 and above- 30%
Other Taxation Issues
1) 80 C limit enhanced to 1,50,000 from 1,00,000
2) Deduction from House property enhanced to 2,00,000 from 1,50,000
3) Increase/ Decrease in Custom Duty
a) fatty acids, crude palm stearin, RBD and other palm stearin, specified industrial grade crude oils from 7.5% to Nil
b) steel grade limestone and steel grade dolomite from 5% to 2.5%
c) Battery waste and battery scrap from 10% to 5%
d) Coal tar pitch from 10 percent to 5%
e) Specified inputs for manufacture of spandex from 5% to Nil
f) In order to encourage new investment and capacity additions in the chemicals and petrochemicals sector, reduce the basic custom duty on reformate from10% to 2.5%
i) Ethane, propane, ethylene, propylene, butadine and ortho-xylene from 5% to 2.5%
ii) Methyl alcohol and denatured ethyl alcohol from 7.5 % to 5 %
iii) crude naphthalene from 10 % to 5%
g) Impose BCD on specified telecommunication products that are outside the purview of Information Technology Agreement
h) Exempt all input/components used in the manufacture of personal computers from 4% Special Additional Duty (SAD)
i) Impose education cess on imported electronic products
j) Exempt 4% SAD on PVC sheet and ribbon used for manufacture of smart cards
k) Color picture tubes exempt from custom duty. Cathode Ray TV to be cheaper
l) Nil BCD to encourage production of LCD and LED TV panels below 19 inches and exempt in all inputs in the manufacture of LCD and LED panels.
m) Increase the BCD on imported flat-rolled products of stainless steels from 5% to 7.5%
n) Cheers to solar sector to manufacture Photovoltaic cells and modules
o) Decrease in BCD from 10% to 5% on forged steel rings used in the bearings of operated electricity generators
p) Exempt SAD of 4% on parts and raw materials for the manufacture of wind operated generators
q) Concessional basic duty of 5% on machinery and equipment required for setting up of compressed bio-gas plants
r) Rationalization in duties of coal. All types of coal at 2.5% BCD and 2% on CVD
s) Ship imported for breaking up attracts 5% to 2.5 %
Ornaments and precious stones
t) Rationalized Basic custom duty on semi-processed, half cut or broken diamonds and colored gemstone to 2.5%
u) Export of per-forms of precious and semi-precious stones are fully exempt from custom duty
v) To increase the export of ready-made garments, increase in the duty free entitlements for imports of trimmings, embellishments and other specified items from 3% to 5%
w) Increase the export duty on bauxite from 10% to 20%
Increase or Decrease in Custom Duties
a) Reduce excise duties on specified food packaging machinery from 10% to 6%
b) Reduction in excise duty from 12% to 6% on footwear exceeding 500 but not 1000 on retail price per pair and footwear below the range of 500 continue to remain exempted.
c) Uniform excise duty on smart cards at 12%. Consequently imports will attract higher CVD.
The following will be exempt from excise duty
d) EVA sheets and solar back sheets and specified inputs used in their manufacture
e) Solar tempered glass used in the manufacture of solar photovolic cells and modules.
f) Flat copper wire for the manufacture of PV ribbons
g) Machinery and equipment required for setting upf of a project for solar energy production
h) Forged steel rings used in the manufacture of bearings of wind operated generators
i) Machinery and equipment used for setting up of compressed bio-gas plants
j) Clean energy cess from 50 per tonne to 100 per tonne
PSF and PFY
k) Exemption on plastic bottles manufactured from scrap including PET bottles with effect from 29th june 2010 to 7 May 2012.
l) Levy prospectively a nominal duty of 2% without CENVAT credit and 6% with CENVAT credit.
m) concessional excise duty of 2% without CENVAT and 6% with CENVAT credit
Cigarettes, Pan masala and other Tobacco Products / aerated waters
n) Increase the specific excise duty on cigarettes in the range of 11% to 72%
o) Similar increases are proposed on cigars, cheerots and cigarillos
p) Excise duty is increased in pan masala from 12% to 16%
q) from 50% to 55% on unmanufactured tobacco and from 60% to 70% on gutkha and chewing tobacco
r) Levy an additional excise duty at 5% on aerated waters containing added sugar
Service Tax ( Indirect Tax Target 7,525 crore)
a) Advertising through online media and mobile is now levible to service tax
b) Tax proposed on the service provided by radio-taxis (Date to be notified after the passing of finance bill)
c) Service by air conditioned contract carriage and technical testing of newly developed drugs under service tax regime
d) Service tax exempted on loading, unloading, storage, warehousing and transportation of cotton whether ginned or baled.
e) Exemption available to specified micro insurance is now extended to cover all micro life insurance where the sum assured doesn't exceed 50,000 per life insured
f) To encourage growth in the transport of goods through coastal vessel tax incidence has been reduced
g) Service provided by tour operators to foreign tourist wholly outside India is being taken out of tax net.
h) Service provided by Employee State Insurance Corporation for the period prior to 1st July 2012 is being exempted
i) Service provided by common bio-medical waste treatment facilities are being exempted.
Dipendra Prasad Poudel