Surana Maloo & Co.
E x e c u t i v e
S u m m a r y
Modi government’s first two budgets - one in 2014, just months after he took office, followed by a full budget in 2015 have failed to excite economic commentators hoping for a bold new wave of reforms.
India has sustained over 7 per cent growth in 2015-16, earning the economy the tag of being one of the world’s fastest growing large economies. However, predictions of weak global growth, the slowdown of the Chinese economy and the continued uncertainty in global crude oil prices, have put an additional burden on the Indian economy. Amidst this backdrop, Mr. Jaitely presented Finance Bill, 2016, as part of the Union Budget 2016-17, to Parliament on 29 February, 2016 and it was not a disappointment for the nation. Hon’ble finance minister substantiated on last year’s announcement of phased reductions in the corporate tax rate over the next few years and a structured plan to phase-out the exemptions. Further various measures to move towards a litigation free environment will build the tax payers’ confidence to a great level. The proposals were complimented by important incremental steps towards ensuring the success of the ‘Make in India’ and other flagship campaigns such as ‘Startup India’ by introducing specific benefits for such entities. The Budget Analysis summarizes the significant Direct Tax amendments proposed by Hon’ble Finance Minister.
Table of Contents
New Initiatives
New tax incidence
House property
Profits & Gains from business and profession
Capital Gain & IFOS
Deductions and Exemptions
TDS & TCS
Penalties
Procedural Amendments
Others
2 0 1 6
House property
Business &
Profession
Capital Gain &
IFOS
Deductions &
Exemptions TDS & TCS
Penalties
Procedural Amendments
New Initiatives
New tax incidence
Corporate Tax rate proposals:
New manufacturing companies incorporated on or after 1.3.2016 to be given an option to be taxed at 25% + surcharge and cess provided they do not claim profit linked or investment linked deductions and do not avail of investment allowance and accelerated depreciation.
Lower the corporate tax rate for the next financial year for relatively small enterprises i.e companies with turnover not exceeding ` 5 crore (in the financial year ending March 2015), to 29% plus surcharge and cess.
Tax incentives for start-ups
Section 80IAC inserted
100 % profit linked deduction
Any 3 consecutive years of 5 years from incorporation
Should fall under the definition of ‘eligible business’
Fulfills condition as prescribed in the section
Startup incorporated after 01/04/2016 before 01/04/2019
Total turnover does not exceed ` 25 crores in any PY from 01/04/2016 to 31/03/2021
Non-applicability of Minimum Alternate Tax (MAT) to foreign companies
MAT not applicable to foreign companies not having permanent establishment in India
Retrospective amendment from AY 2001-02 and onwards
The Income Declaration Scheme, 2016
Voluntary income disclosure gateway to be opened from 01/06/2016 to 30/09/2016
Applicable in respect of undisclosed income of any FY up to 2015-16
Tax to be paid:
i). Basic tax @ 30% on declared income
ii). Surcharge @ 25% on tax payable (in name of Krishi Kalyan cess)
iii). Penalty @ 25% on tax payable
Exempt from wealth-tax in respect of assets specified in declaration
No scrutiny or enquiry under Income Tax and Wealth tax
Immunity from:
i) Prosecution
ii) Benami Transactions (Prohibition) Act, 1988
Misrepresentation or suppression of facts – Declaration to be considered void
House property
Business &
Profession
Capital Gain &
IFOS
Deductions &
Exemptions TDS & TCS
Penalties
Procedural Amendments
New Initiatives
New tax incidence
Non-eligibility of following cases:
Notices issued u/s 142(1) or 143(2) or 148 or 153A or 153C
Search or survey cases
Information is received under an agreement with foreign countries regarding such income
Cases covered under the Black Money Act, 2015,
Persons notified under Special Court Act, 1992,
Cases covered under Indian Penal Code, the Narcotic Drugs and Psychotropic Substances Act, 1985, the Unlawful Activities (Prevention) Act, 1967, the Prevention of Corruption Act, 1988
Moving to litigation free environment – Introduction of The Direct Tax Dispute Resolution Scheme, 2016
Applicable to "tax arrears" i.e. amount of tax, interest or penalty determined under the Income-tax Act or the Wealth-tax Act
Appeal is pending before the CIT(Appeals) or the Commissioner of Wealth-tax (Appeals) as on 29/02/2016
Appeal pending under against an assessment order or a penalty order
Pay tax + interest (upto date of assessment)
If disputed tax > ` 25 lacs - 25% of minimum penalty leviable to be paid
Appeal against a penalty order - 25% of minimum penalty leviable to be paid
Appeal deemed to be withdrawn
Withdraw any writ petition or any appeal filed against such specified tax
Violation of any condition under scheme – declaration to be considered void
Immunity from prosecution proceedings
Non-eligibility of following cases:
Cases where prosecution has been initiated before 29.02.2016.
Search or survey cases
Cases relating to undisclosed foreign income and assets.
Cases based on information received under Double Taxation Avoidance Agreement under section 90 or 90A of the IT Act where the declaration is in respect of tax arrears.
Person notified under Special Courts Act, 1992.
Cases covered under Narcotic Drugs and Psychotropic Substances Act, Indian Penal Code, Prevention of Corruption Act or Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974
Designated authority to pass order for declaration within 60 days
Payment to be made within 30days of passing order
Mattered covered above shall not be subject to reopening proceedings
House property
Business &
Profession
Capital Gain &
IFOS
Deductions &
Exemptions TDS & TCS
Penalties
Procedural Amendments
New Initiatives
New tax incidence
Tax proposals of other concerns:
Surcharge to be raised from 12% to 15% on persons, other than companies, firms and cooperative societies having income above ` 1 crore.
Taxation on dividend income
Applicability: Individual, HUF & Firm (resident)
Dividend income > ` 10 lacs only
Taxability – only on the incremental amount in excess of ` 10,00,000/-
Example – total dividend ` 15,00,000 – then taxable only ` 5,00,000/-
Rate of tax: 10 % on dividend income exceeding ` 10 lacs only
Cessation or conversion of charitable trust to non- charitable trust – ‘Exit tax’
New chapter XII-EB inserted
Tax @ MMR on accreted income
Accreted income = total assets – total liabilities (as on specified date)
To be paid within 14 days from prescribed date
Non-payment: simple interest @ 1% per month or part thereof
w.e.f. 01/06/2016
Income from patents
New section 115BBF inserted
Applicable to gross royalty in respect of a patent developed and registered in India
Taxable @ 10% + surcharge + cess
Eligible Assessee:
Person resident in India
True and first inventor of the invention
House property
Business &
Profession
Capital Gain &
IFOS
Deductions &
Exemptions TDS & TCS
Penalties
Procedural Amendments
New Initiatives
New tax incidence
Additional deduction – interest on home loan (Section 80EE)
Applicable on to ‘first-home buyers’
Additional deduction upto ` 50,000
Value of house property < ` 50 lacs
Amount of loans not more than ` 35 lacs
Loan sanctioned during 01/04/2016 to 31/03/2017
Benefit extended till the repayment of loan continues
Over and above the limit of ` 2,00,000 for a self-
occupied property u/s 24 of the act Amendment to provisions related to ‘Income from House property’
Time period for acquisition or construction of self- occupied house property for claiming deduction of interest increased from 3 years to 5 years (Section 24 (b))
Amount of rent received in arrears or the amount of unrealized rent realized – taxable in the financial year of receipt or realization irrespective of ownership
Deduction of 30% allowable on arrears or unrealized rent received
Existing provisions u/s 25A, 25AA & 25B submerged as section 25A
House property
Business &
Profession
Capital Gain &
IFOS
Deductions &
Exemptions TDS & TCS
Penalties
Procedural Amendments
New Initiatives
New tax incidence
Presumptive taxation for professionals
New section 44ADA inserted
Total gross receipts does not exceed ` 50 lacs
Presumptive income – 50% of gross receipts
Applicability: Individual, HUF, Firm but not LLP
Threshold limit for audit of professionals
Threshold limit increased from ` 25 lacs to ` 50 lacs (section 44AB)
Presumptive taxation for business (section 44AD)
Threshold limit increased from ` 1crore to ` 2 crores
Advance tax to be paid by 15th March of the PY
If eligible Assessee declares profit for any previous year in accordance with section 44AD and he declared profit under normal provisions in any of the subsequent 5 years, he shall not be eligible to claim the benefit u/s 44AD for next 5 years.
Illustration:
Allowability of provision for doubtful debts extended to NBFCs
Limited to amount not exceeding 5% of the gross total income computed before aforesaid deduction (Section 36)
Rationalizations of scope u/s 32AC(1A)
Existing condition: acquisition and installation has to be done in the same previous year
Proposed: Acquisition or installation can be in different years; installation to be done before 31/03/2017
w.r.e.f. 01/04/2016
Extension of scope of section 43B
Payments made to Indian Railways for use of Railway assets brought within ambit of section 43B
Taxation of Non-compete fees and exclusivity rights in case of Profession
Non-compete fee received/receivable in relation to any profession brought under the definition of income u/s 28(va)
NO Capital gain from receipts for transfer of right to carry on any profession
Provide the 'cost of acquisition' and 'cost of improvement' on capital receipts arising out of transfer of right to carry on any profession shall also
AY 17-18 Section 44AD
AY 18-19 Section 44AD
AY 19-20 Section 44AD
AY 20-21 Normal return
AY 21-22 to
AY 25-26 Section 44AD benefit cannot be availed
House property
Business &
Profession
Capital Gain &
IFOS
Deductions &
Exemptions TDS & TCS
Penalties
Procedural Amendments
New Initiatives
New tax incidence
Phasing out of deduction in business & Profession
Applicable from AY 18-19 – Table 2
* AY – Assessment year | PY – Previous year
Additional depreciation @ 20% under section 32(1)(iia)
Existing benefit limited to assessees engaged in the business of generation and distribution of power
Extended to assessee engaged in the business of transmission of power also be taken as 'nil' for computing Capital Gain.
Sr. No. Section Existing Proposed
1 32 r.w. Rule 5 Accelerated depreciation on speci- fied assets
Highest rate of depreciation restricted to Applicable to all assets 40%
(w.e.f. PY 2017-18) 2 35(1)(i) Weighted deduction @ 175% 150% (PY 2017-18 to 2019-20)
100 % (PY 2020-21 onwards) 3 35(1)(iia) Weighted deduction @ 125% 100% (PY 2017-18 onwards) 4 35(1)(iii) Weighted deduction @ 125% 100% (PY 2017-18 onwards) 5 35(2AA) Weighted deduction @ 200% 150% (PY 2017-18 to 2019-20)
100 % (PY 2020-21 onwards) 6 35(2AB) Weighted deduction @ 200% 150% (PY 2017-18 to 2019-20)
100 % (PY 2020-21 onwards)
7 35AD Weighted deduction @ 150%
(specified business) 100% (PY 2017-18 onwards)
8 35CCC Weighted deduction @ 150%
(notified agriculture extension pro-
vision) 100% (PY 2017-18 onwards)
House property
Business &
Profession
Capital Gain &
IFOS
Deductions &
Exemptions TDS & TCS
Penalties
Procedural Amendments
New Initiatives
New tax incidence
Capital Gains exemption - Fund related to Startup India
Section 54EE inserted
LTCG to be invested in units of specified funds as may be notified by CG
Lock-in period: 3 years
Investment shall not exceed ` 50 lacs Section 54GB amended
Applicability: Individual and HUF
Sale of residential property
Investment in shares of eligible startup
Shareholding should be more than 50%
Company (start-up) shall utilize the proceeds for purchase of new assets on or before due date of filing of return by the investor
Expression "new asset" to also include computers or computer software in case of certified technology driven start-ups
Rupee Denominated Bond
Relief benefit to non-resident investors from risk of currency fluctuation
Capital gains arising on redemption of Rupee Denominated Bond to be exempt (Section 48)
Sovereign Gold Bond Scheme, 2015
Redemption of Sovereign Gold Bond – not to be regarded as transfer (only for individuals)
Indexation benefit extended to Long term Capital gains arising on transfer of Sovereign Gold Bonds – applicable to all Assessees
Gold Monetization Scheme, 2015
Excluded from definition of capital asset u/s 2(14) – no capital gains
Interest on deposit certificates issued under the scheme – exempt u/s 10(15)
w.r.e.f. 01/04/2016
House property
Business &
Profession
Capital Gain &
IFOS
Deductions &
Exemptions TDS & TCS
Penalties
Procedural Amendments
New Initiatives
New tax incidence
Definition of the term ‘unlisted securities’
Section 112(1)(c) LTCG from transfer of a capital asset being shares of a company not being a company in which the public are substantially interested –Taxable at 10% (Without Indexation)
Private company shares also covered. (Unlisted Securities)
Applicable to Non-Resident (Not being a company) or foreign company
Rationalization of Section 50C
Date of the agreement fixing the amount of consideration for the transfer of immovable property and the date of registration are not the same
The stamp duty value on date of the agreement to be considered for computation.
Payment ought to be made before the date of agreement via banking channels.
Conversion of a Company into LLP
Additional condition- the total assets of the company in any of the three previous years preceding the PY in which the conversion takes place- not to exceed 5 Crores.
In reference to section 47 that is transactions not regarded as transfer for computing capital gain.
Rationalization of section 56 (IFOS)
Shares received by an individual or HUF as a consequence of demerger or amalgamation of a company shall not attract the provisions of section 56 (2)(vii)
House property
Business &
Profession
Capital Gain &
IFOS
Deductions &
Exemptions TDS & TCS
Penalties
Procedural Amendments
New Initiatives
New tax incidence
Phasing out of deductions and exemptions
Applicable from AY 17-18 – Table 1
* AY – Assessment year | PY – Previous year
Income of Foreign company from storage and sale of crude oil stored as part of strategic reserves
Amendment to section 10(48A)
Income exempt: storage of crude oil in a facility in India and sale of crude oil therefrom to any person resident in India subject to conditions prescribed
w.r.e.f. 01/04/2016
Activity related to diamond trading in "Special Notified Zone"
Amendment to section 9
Applicable to Foreign Mining Companies
No income deemed to accrue or arise in India from the activities confined to display of uncut and unassorted dia- monds in a Special Zone notified by the CG
w.r.e.f. 01/04/2016
Sr. No. Section Existing Proposed
1 10AA (SEZ) No sunset clause Sunset w.e.f. 01/04/2020
2 35AC No deduction from PY 2017-18
3 35CCD Weighted deduction 150% Deduction @ 100% from PY 2020-21 4 80IA, 80IAB, 80IB
(9) 100 % profit linked deduction No deduction on activity commenced from PY 2017-18
House property
Business &
Profession
Capital Gain &
IFOS
Deductions &
Exemptions TDS & TCS
Penalties
Procedural Amendments
New Initiatives
New tax incidence
Promoting Affordable housing – tax benefits
New section 80IBA inserted
100% profit linked deduction
Project to be approved after 01/06/2016, but on or before 31/03/2019
Project to be completed within 3 years of first approval
Specified conditions:
Tax incentive for employment generation – Section 80JJAA
30% deduction additional wages paid to new regular workmen in a such business for 3 years
Extended to all sectors
Minimum working days reduced from 300 to 240 days
Condition of 10% increase in number of employees every year is proposed to be done away
1st year of business – 30 % of emoluments of
Relief to small taxpayers - Deduction u/s 80GG
Rent paid for residential accommodation
No HRA received from employer
Earlier - ` 24,000 per annum
Proposed - ` 60,000 per annum
Relief to small taxpayers - Rebate u/s 87A
Applicability: Resident Individual (Income not exceeding ` 5 lacs)
Amount of rebate increased from ` 2,000 to ` 5,000
Tax incentives to International Financial Services Centre (IFSCs)
Section 10(38) - exemption from tax on capital gains to the income arising from transaction undertaken in foreign currency on a recognised stock exchange located in IFSC (No STT to be paid)
Section 115JB - unit located in IFSC and deriving its income solely in convertible foreign exchange, MAT shall be chargeable @ 9%
Section 115-O – No DDT on dividend declared, distributed by a company being a unit located in IFSC, deriving income solely in convertible foreign exchange
Section 113A – No STT / CTT on transaction undertaken in foreign currency on a recognised stock exchange / recognized association located in IFSC
Metro cities Other cities
Plot of land not less than 1000 sq mts.
Size of the residential unit not more than 30 sq mts.
Located within 25 km from the municipal limits
Plot of land not less than 2000 sq mts.
Size of the residential unit not more than 60 sq mts.
House property
Business &
Profession
Capital Gain &
IFOS
Deductions &
Exemptions TDS & TCS
Penalties
Procedural Amendments
New Initiatives
New tax incidence
Amendment pertaining to TDS (w.e.f. 01/06/2016)
Increase in threshold limit of deduction of tax at source on various payments mentioned in the relevant sections of the Act
Revision in rates of deduction of tax at source on various payments mentioned in the relevant sections of the Act
Section Head Existing Proposed
192A Payment of accumulated balance due to an em-
ployee 30,000 50,000
194BB Winnings from Horse Race 5,000 10,000
194C Payments to Contractors Aggregate annual limit
of 75,000 Aggregate annual limit of 1,00,000
194LA Payment of Compensation on acquisition of cer-
tain Immovable Property 2,00,000 2,50,000
194D Insurance commission 20,000 15,000
194G Commission on sale of lottery tickets 1,000 15,000
194H Commission or brokerage 5,000 15,000
Section Heads Existing Rate Proposed Rate
194DA
Payment in respect of Life Insurance Policy
2%
1%
194EE
Payments in respect of NSS Deposits
20%
10%
194D
Insurance commission
Rate in force (10%)
5%
194G
Commission on sale of lottery tickets
10%
5%
194H
Commission or brokerage
10%
5%
House property
Business &
Profession
Capital Gain &
IFOS
Deductions &
Exemptions TDS & TCS
Penalties
Procedural Amendments
New Initiatives
New tax incidence
Certain non-operational provisions to be omitted
Form 15G/15H for rental payments
Self Declaration under Form 15G and 15H for rental payments
W.e.f. 01/06/2016 Widened base of TCS
Sale of motor vehicle > ` 10 lacs - TCS @ 1%
Sale in cash of goods (other than gold / bullion) or services provided > ` 2 lacs – TCS @ 1%
No TCS if TDS is deducted by payer on purchase of goods or receipt of services
w.e.f. from 01/06/2016
Exemption from furnishing of PAN u/s 206AA to certain NR
Furnishing of PAN not mandatory to a non-resident, not being a company, or to a foreign company, in respect of any other payment, other than interest on bonds, subject to prescribed conditions
w.e.f. 01/06/2016
Section Heads Proposal
194K
Income in respect of Units To be omitted w.e.f 01.06.2016 194L
Payment of Compensation on acquisition of Capital Asset To be omitted w.e.f 01.06.2016
House property
Business &
Profession
Capital Gain &
IFOS
Deductions &
Exemptions TDS & TCS
Penalties
Procedural Amendments
New Initiatives
New tax incidence
Rationalisation of penalty provisions
Sectiojn 271(1)(c)- scrapped and deleted w.e.f. 1/04/2017
Insertion of new section 270A - seeks to provide that the Assessing Officer, Commissioner (Appeals) or the Principal Commissioner or Commissioner may levy penalty if a person has under reported or misreported income.
Quantum –
In case of under reporting income – 50% of the tax effect
In case of misreporting of income – 200% of the tax effect
Incidence of under reporting of income Incidence misreporting of income (a) the income assessed is greater than the income determined
in the return processed under clause (a) of sub-section (1) of section 143;
(b) the income assessed is greater than the maximum amount not chargeable to tax, where no return of income has been fur- nished;
(c) the income reassessed is greater than the income assessed or reassessed immediately before such re-assessment;
(d) the amount of deemed total income assessed or reassessed as per the provisions of section 115JB or 115JC, as the case may be, is greater than the deemed total income determined in the return processed under clause (a) of sub-section (1) of section 143;
(e) the amount of deemed total income assessed as per the pro- visions of section 115JB or 115JC is greater than the maximum amount not chargeable to tax, where no return of income has been filed;
(f) the income assessed or reassessed has the effect of reducing the loss or converting such loss into income.
(i) misrepresentation or suppression of facts;
(ii) non-recording of investments in books of account;
(iii) claiming of expenditure not substantiated by evidence;
(iv) recording of false entry in books of account;
(v) failure to record any receipt in books of account having a bearing on total income;
(vi) failure to report any international transaction or deemed international transaction under Chapter X.
House property
Business &
Profession
Capital Gain &
IFOS
Deductions &
Exemptions TDS & TCS
Penalties
Procedural Amendments
New Initiatives
New tax incidence
Exceptions to section 270A
where the assessee offers an explanation and the income-tax authority is satisfied that the explanation is bona fide and all the material facts have been disclosed;
where such under-reported income is determined on the basis of an estimate, if the accounts are correct and complete but the method employed is such that the income cannot properly be deducted therefrom;
where the assessee has, on his own, estimated a lower amount of addition or disallowance on the issue and has included such amount in the computation of his income and disclosed all the facts material to the addition or disallowance;
where the assessee had maintained information and documents as prescribed under section 92D, declared the international transaction under Chapter X and disclosed all the material facts relating to the transaction;
where the undisclosed income is on account of a search operation and penalty is leviable under section 271AAB.
Amendment in section 271AAB
In section 271AAB(1)(c) – instead of range of 30% to 90% - flat 60% penalty proposed.
Amendment in section 272A
One new situation covered – to include levy of penalty of 10000 rupees for each default or failure to comply with a notice issued under sub-section (1) of section 142 or sub-section (2) of section 143 or failure to comply with a direction issued under sub-section (2A) of section 142.
Immunity from penalty and prosecution in certain cases by inserting new section 270AA
Proposed to provide that an assessee may make an application to the Assessing Officer for grant of immunity from imposition of penalty under section 270A and initiation of proceedings under section 276C, provided
he pays the tax and interest payable as per the order of assessment or reassessment within the period specified in such notice of demand and
does not prefer an appeal against such assessment order
The assessee can make such application within one month from the end of the month in which the order of assessment or reassessment is received in the form and manner, as may be prescribed.
The AO may grant immunity on fulfillment of certain conditions
House property
Business &
Profession
Capital Gain &
IFOS
Deductions &
Exemptions TDS & TCS
Penalties
Procedural Amendments
New Initiatives
New tax incidence
Stay of demand
Mandatory for the assessing officer to grant stay of demand once the assesse pays 15% of the disputed demand, while the appeal is pending before Commissioner of Income-tax (Appeals).
CBDT has revised Instruction No.1914 dated 21/03/1996 on 29/02/2016 for stay of demand at the first appeal stage.
Time limit for disposing applications u/s 273A, 273AA or 220(2A)
Order of acceptance or rejection to be passed within a period of 12 months from the end of the month in which application is received
No order rejecting the application of the Assessee shall be passed without giving the Assessee an opportunity of being heard
w.e.f. 01/06/2016
Pending applications as on 01/06/2016 – time limit upto 31/05/2017
E-assessments
Section 282A - notices and documents may be issued in electronic form
Section 2(23C) – ‘Hearing’ to include communication of data and documents through electronic mode
w.e.f. 01/06/2016
Filing of Return –Amendment in Section 139
139(4)-Belated Return- Time limit reduced up to end of the Assessment year only
139(5)-Revised Return- Now even the late return filed u/s 139(4) can also be revised.
139(9)-Defective return- Return will not be considered defective merely because the self-assessment tax was not paid.
Processing under section 143(1) be mandated before assessment
Time limit for assessment, reassessment and recomputation- Changed
All the Time limit for assessment, reassessment and recomputation (u/s143(3), 144, 147, 153A , 153C, 254, 263 and 264)- Now preponed for 3 Months i.e. from March to December
Provision for bank guarantee under section 281B
Now the AO has option to take bank guarantee as an alternate to provisionally attachment of the property – a welcome move
House property
Business &
Profession
Capital Gain &
IFOS
Deductions &
Exemptions TDS & TCS
Penalties
Procedural Amendments
New Initiatives
New tax incidence
Amendment in Sec 244A
Amendment in section 124 - Assumption of jurisdiction of Assessing Officer
proposed to amend sub-section (3) of section 124 to specifically provide that cases where search is initiated under section 132 or books of accounts, other documents or any assets are requisitioned under section 132A, no person shall be entitled to call into question the jurisdiction of an Assessing Officer after the expiry of one month from the date on which he was served with a notice under sub-section (1) of section 153A or sub-section (2) of section 153C or after the completion of the assessment, whichever is earlier.
Amendment in section 244A
Interest at the rate of 9% p.a against normal rate of 6% p.a for delay in giving effect to Appellate order beyond 90 days.
Refund Arising out of Advance Tax and TDS Time period for entitlement of interest 244A If return filed in time
If return not filed in time
From 1St Day of Assessment year From the Date of filing of Return
Refund Arising out of Self Assessment Tax From Date of Payment of Self Assessment Tax or filing of return w.e.later
House property
Business &
Profession
Capital Gain &
IFOS
Deductions &
Exemptions TDS & TCS
Penalties
Procedural Amendments
New Initiatives
New tax incidence
Amendment in rule 8D for section 14A
Disallowance will be limited to 1% of the average monthly value of investments yielding exempt income, but not exceeding the actual expenditure claimed under rule 8D of Section 14A of Income Tax Act.
Buy back of shares
Scope of buyback increased
apply to any buy back of unlisted shares of company in accordance with the ‘Provisions of the law relating to the Companies’ instead of ‘section 77A of the Companies Act, 1956’
Rules to determine amount to be prescribed later
w.e.f. 01/06/2016
REITs or Invits
No DDT on distributions made by SPV to the business trust
Business trust should hold 100% of the share capital
Applicable only when dividends paid out of current income after the date when the business trust acquires the shareholding
w.e.f. 01/06/2016
Central Government subsidy or grant or cash
assistance, etc. towards corpus of fund established for specific purposes
Excluded from definition section 2(24) - subsidy or grant by the Central Government for the purpose of the corpus of a trust or institution established by the Central Government or State government
Section 115BBE: Clarification of set off losses against deemed undisclosed income
Losses shall not be allowed to be set-off against income u/s 68, 69, 69A,69B, 69C and 69D
Carry forward and set off of such loss under section 73A
Amendment section 80, loss as per section 73A (specified business u/s 35AD) of the Act shall not be ALLOWED to be carried forward and set off in pursuance of a belated return filed.
Moving towards a pensioned society
Withdrawal up to 40% of the corpus at the time of retirement- exempted in case of National Pension Scheme (NPS). Annuity fund -to legal heir -not taxable.
Superannuation funds and recognized PFs, including EPF, the same norm of 40% of corpus - tax free in respect of corpus created out of contributions made on or from 1.4.2016.
Disclaimer
This document is intended for private circulation and knowledge sharing purpose only. All efforts have been made to ensure the accuracy of information in this publication. The information contained in this document is published for the knowledge of the recipient but is not to be relied upon as authoritative or taken in substitution for the exercise of judgment by any recipient. The publication is a service to our clients to provide an overview of the Direct Tax Proposals and shall not be construed as professional advice or an authoritative opinion. Whilst due care has been taken in the preparation of this publication and information contained herein, we will not be responsible for any errors that may have crept in inadvertently and do not accept any liability whatsoever, for any direct or consequential loss howsoever arising from any use of this publication or its contents or otherwise arising in connection herewith.
Reader's feedback / observation are welcomed and would be appreciated.
vidhansurana@suranamaloo.com, sunilmaloo@suranamaloo.com
CA Vidhan SURANA CA Sunil MALOO
Surana Maloo & Co. | Chartered Accountants
2nd Floor, Aakashganga Complex Parimal Under Bridge,
Paldi, Ahmedabad - 380007 Gujarat (India)
+91-79-26651777/8