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Budget 2017: Highlights

Union Budget 2017-2018
*DIRECT TAXES*

#Rate of Tax on Income on Individuals from Rs. 2.50 Lakhs to Rs. 5 Lakhs reduced from ~10%~ to 5%.

#INCOME TAX EXEMPTION LIMIT on Individuals

upto 2.5 lakh NIL
2.5lakh to 5 lakh 5%
5 lakh to 10 lakh 20%
above 10 lakh 30%
REBATE IN TAX OF Rs 2500 UPTO INCOME OF Rs 3.5 Lakh

INCOME TAX SURCHARGE
UPTO 50 LAKH NIL
50 LAKH TO 100 LAKH 10%
ABOVE 100 LAKH 15%

#For Individuals above age of 60 years but less than 80 years

upto 3 Lakh NIL
3lakh to 5 lakh 5%
5 lakh to 10 lakh 20%
above 10 lakh 30%

#For Individuals above age of 80 years upto 3 Lakh NIL
upto 5 lakh NIL

5 lakh to 10 lakh 20%
above 10 lakh 30%

#For Domestic Companies whose total turnover or gross receipts of the P/Y 2015-16 does not exceed Rs. 50 Crores: 25% ; for others 30%. Surcharge remains same as previous year.

#Section 115BBDA: *Income by way of dividend in excess of Rs. 10 lakh* => Tax@10% => ection shall be applicable to all resident assessees except domestic company and certain funds, trusts, institutions, etc

#New Section 194-IB: Individuals or a HUF (other than those covered under 44AB of the Act), responsible for paying to a resident =>any income by way of RENT > Rs. 50k for a month or part of month during the previous year =>TDS @5%.

# *Long Term Capital Assets for Land or Building or Both* => *Period of Holding* reduced from 36 months to *24 months* .

# *Base Year for Computation of Capital Gains shifted from 01.04.1981 to 01.04.2001.*

#Expanding the scope of long term bonds under 54EC: Currently NHAI or RECL bonds were eligible => Now propose to provide that investment in any bond redeemable after three years which has been notified by the Central Government in this behalf shall also be eligible for exemption.

#No notional income for house property held as stock-in-trade: for the period upto one year from the end of the F/y in which the certificate of completion of construction of the property is obtained from the competent authority.

#Section 80-IAC: Extending the period for claiming deduction by start-ups => currently 3/5 years => proposed 3/7 years

#Section 115JAA: MAT / AMT Credit can be carried forward to ~10years~ 15 years.

#Section 80G: Cash donation restricted to Rs. 10,000/-

#Disallowance of depreciation U/s 32 and capital expenditure U/s 35AD on cash payment exceeding Rs. 10,000/-

#Section 40A: Reduction of existing threshold of cash payment to a person from Rs. 20,000/- to Rs. 10,000/-.

#Section 44AD: Measures for promoting digital payments in case of small unorganized businesses: Reduction of Deemed Income from 8% to 6% in case amount is received by an A/c payee cheque or A/c bank draft or use of ECS through a bank account.

#Section 269ST: Restriction on cash transactions of Rs. 3 Lakhs or more

#Section 13A: Transparency in ELECTORAL Funding: Maximum cash donation Rs. 2,000/- and Political Parties to file Income Tax Return U/s 139.

#Section 194D: Insurance Commission: eligible for filing self-declaration in Form.No.15G/15H for non-deduction of tax at source in respect insurance commission.

#Section 44AA: Increasing the threshold limit for maintenance of books of accounts in case of Individuals and HUF carrying on business or profession: Income Rs. 2.50 Lakhs and Total Sales Rs. 20 Lakhs

#Section 194J: Reduce the Rate of TDS from 10% to 2% in case of a person engaged only in the business of operation of call center.

#Section 92BA: person referred to in under section 40A(2)(b) are to be excluded from the scope of section 92BA.

#Section 47: Tax neutral conversion of preference shares to equity shares.

#Sectionn47(vic): Cost of acquisition in Tax neutral demerger of a foreign company: cost of acquisition of the shares of Indian company referred to in section 47(vic) in the hands of the resulting foreign company shall be the same as it was in the hands of demerged foreign company.

#Rationalisation of section 211 and section 234C relating to advance tax: single instalment advance tax benefits to certain assesses.

#Section 244A: Interest on refund due to deductor @1.50% p.m.

#Rationalisation of time limits for completion of assessment, reassessment and re-computation and reducing the time for filing revised return. time for furnishing of revised return shall be available upto the end of the relevant assessment year or before the completion of assessment, whichever is earlier.

#Rationalisation of the provisions in respect of time limits for completion of search assessment.

#ANTI-ABUSE MEASURES: With a view to prevent this abuse, it is proposed to amend section 10(38) to provide that exemption under this section for income arising on transfer of equity share acquired or on after 01.10.2004 shall be available only if the acquisition of share is chargeable to STT.

#New Section 50CA: where consideration for transfer of share of a company (other than quoted share) is less than the Fair Market Value (FMV) of such share determined in accordance with the prescribed manner, the FMV shall be deemed to be the full value of consideration for the purposes of computing income under the head “Capital gains”.

#New Section 94B: interest expenses claimed by an entity to its associated enterprises shall be restricted to 30% of its earnings before interest, taxes, depreciation and amortization (EBITDA) or interest paid or payable to associated enterprise, whichever is less.

#Section 139 (4C): Mandatory furnishing of return by certain exempt entities.

#New Section 234F: Fee for delayed filing of return upto Rs. 10,000/-.

#Section 271J: Penalty on professionals for furnishing incorrect information in statutory report or certificate upto Rs. 10,000/-.

*Service Tax, VAT, Central Excise and Customs*

#Section 96A Clause (d) (Service Tax), 23A Clause (e) (Central Excise) & 28E clause (e) (Customs): “Authority” to mean the Authority for Advance Ruling as constituted under section 28E of the Customs Act, 1962.

#Section 28F (Customs): The Authority for Advance Rulings constituted under section 245-O of the Income-tax Act shall be the Authority for giving advance rulings for the purposes of the Customs Act.

#Section 96C (3) (Service Tax): *Increase the application fee for seeking advance ruling from ₹2500 to ₹10000* on the lines of the Central Excise Act.

#Section 26C (3) (Central Excise): *Increase the application fee for seeking advance ruling from ₹2500 to ₹10000* on the lines of the Income Tax Act.

#Section 32E (5) (Central Excise) & Section 127B (5) (Customs): enable any person to make an application to the Settlement Commission

#Section 32F (5A) (Central Excise) Section 127C (3) (Customs): The Settlement Commission=>*Rectify any error apparent on the face of record* .

#Section 96D (6) (Service Tax) & #Section (Excise): Time Limit Amended=> *Six Months by which Authority shall pronounce its ruling* on the lines of the Central Excise Act.

#Section 26D (6) (Excise): Time Limit Amended=> *Six Months by which Authority shall pronounce its ruling* on the lines of the Income Tax Act.

#Section 28H (3) (Customs): Increase the application fee for seeking advance ruling from ₹2500 to ₹10000 on the lines of the Income Tax Act.

#Section 28I (6) (Customs): Time Limit Amended=>Six Months by which Authority shall pronounce its ruling on the lines of the Income Tax Act.

#Section 30A (Customs): Passenger and crew arrival manifest before arrival in the case of an aircraft or a vessel and upon arrival in the case of a vehicle=>Penalty: ≤₹50000.

#Section 41A (Customs): Passenger and crew departure manifest and passenger name record information of departing passengers before the departure of the conveyance form yet to be prescribed=>Penalty: ≤₹50000.

*NEW* #Section 96HA (Service Tax) & #Section 23-I (Central Excise): Transferring pending application before the Authority for Advance Rulings (Central Excise, Customs and Service Tax) to the Authority constituted under section 245-O of the Income-tax Act

#Section 46 (3) (Customs): Mandatory to file the bill of entry before the end of the next day following the day (excluding holidays)

#Section 7 (Customs): Empowering the board to notify Foreign Post Offices & International Courier Terminals.

#Section 17 (Customs): Rationalization the requirement of the documents for verification of self-assessment.

#Section (49) (Customs): Extending the facility of storage under section 49 to imported goods entered for warehousing before their removal

#Section 27(2): Unjust Enrichment=>The Refund the refund of duty paid in excess by the importer before an order permitting clearance of goods for home consumption is made.

#Section 9 (3) Clause (c): Withdrawal of the exemption to three categories of non-actionable subsidies specified therein from the scope of anti-subsidy investigations.

#Service Tax: Exemption from service tax is being provided in respect of the amount of viability gap funding (VGF) payable to the selected airline operator for the services of transport of passengers.

#Service Tax: Exemption to life insurance to members of the Army, Navy and Air Force under the Group Insurance Schemes of the Central Government, is being made effective from 10th day of September, 2004, the date when services of life insurance became taxable.

#Service Tax: The services of renting of immovable property became taxable => exempts one-time upfront amount payable for grant of long-term lease of industrial plots (30 years or more) by State Government industrial development corporations/undertakings to industrial units from Service Tax.

 

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