Abhirami Andhadhi
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1 | P a g e I n d i a U n i o n B u d g e t 2 0 1 5
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Disclaimer: These are a few of the Highlights of the Union Budget 2015. Expert advice and user discretion is recommended prior to application of the contents of this document to
specific situations
Budget Highlights 2015
Budget Highlights Direct Taxes
Budget Highlights Indirect Taxes
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2 | P a g e I n d i a U n i o n B u d g e t 2 0 1 5
Budget Highlights - Direct taxes
Tax Rates
Income Tax rates remain the same for individuals and corporates for the FY 2015-
16. Corporate taxes are proposed to be
reduced from the existing rate of 30% to
25% over the next 4 years
Non Corporate Assesses
Assesses less than 60 years
FY 2015-16 Tax rate
0-250,000 Nil
250,001-500,000* 10%
500,001-1,000,000 20%
1,000,000+ 30%
For senior citizen assesses 60 years or more but less than 80 years
FY 2015-16 Tax rate
0-300,000 Nil
300,001-500,000* 10%
500,001-1,000,000 20%
1,000,000+ 30%
Senior citizen assesses > 80 years
FY 2015-16 Tax rate
0-500,000 Nil
500,001-1,000,000 20%
1,000,000+ 30%
Surcharge
Txbl Income FY
2014-15
FY
2015-16
10,000,000 10% 12%
Corporate Assesses
Domestic Companies
Taxable Income FY
2014-15
FY
2015-16
Tax Rate 30% 30%
Surcharge :
10,000,000 and
100,000,000 10% 12%
Foreign Companies
Taxable Income FY
2014-15
FY
2015-16
Tax Rate 40% 40%
Surcharge :
10,000,000 and
100,000,000 5% 5%
Wealth tax
Abolish the levy of Wealth-tax with effect from 2016-17 (Assessment Year)
The revenue loss on account of such abolition is proposed to be compensated by
increase in the existing surcharge by 2% in
case of domestic companies and all non
corporate taxpayers.
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3 | P a g e I n d i a U n i o n B u d g e t 2 0 1 5
Key Changes in Income Tax
Individuals
Section Applicability FY 2014-15 FY 2015-16
Transport Allowance Rs 800 per month Rs 1600 per month
80C Sukanya Samriddhi Scheme Investments made by parent or
guardian
Nil New
80D Non senior citizen 15000 Premium 25000
Senior Citizen 20000 Premium 30000
Very Senior Citizen not eligible
for insurance
Nil 30000 ( Expenditure )
80DDB Very Senior Citizens Specified diseases * ( in the speech )
60000 80000
80DD Maintenance, including medical
treatment of a dependant who is a
person with disability
50000 75000
Severe disability 100000 125000
80U Person with disability 50000 75000
Severe disability 100000 125000
80CCC Contribution to a pension fund of
LIC or IRDA approved insurer
100000 150000
80CCD Contribution by the employee to
National Pension Scheme (NPS)
Deduction of upto Rs 50,000 over
and above the limit of Rs 1.50
lakh in respect of contributions
made to NPS
100000 150000
80G Swachh Bharat Kosh
Clean Ganga Fund
National Fund for Control of
Drug Abuse
Nil 100%
Tax deductions referred to in Budget
Deduction u/s 80C 1,50,000
Deduction u/s 80CCD 50,000
Interest onSelf Occupied property 2,00,000
80D Insurance premium 25,000
Transport allowance 19,200
Total 4,44,200
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4 | P a g e I n d i a U n i o n B u d g e t 2 0 1 5
Other Key Changes
Residential Status
Sec 6 A Company is considered as resident in
India if its place of effective management
(POEM), at any time in that year, is in India
The term PoEM has been explained to mean a place where key management and commercial
decisions that are necessary for the conduct of
the business of an entity as a whole are, in
substance made.
Value substantially from the assets in India
Section 9 (1)(i)(A) the term substantially from
the assets located in India would mean the
following:
1. Excess of Rs. 1 Crore and 2. Represents at least 50% of the value of
all the assets owned by the entity
Domestic Transfer Pricing
Section 92BA -increase the threshold limit for
applicability of transfer pricing regulations to
specified domestic transactions from Rs 5 crore
to Rs 20 crore
GAAR
Defer applicability of General Anti Avoidance
Rule (GAAR) by 2 years
2(15) of Income tax act
Yoga included as a specific category of activity in the definition of charitable purpose and also to provide relief for activities in the
nature of business undertaken by genuine
charitable organizations subject to the condition
that aggregate receipts from such activity is less
than 20% of the total receipts
Additional depreciation on P & M
Additional depreciation @ 20% is allowed on
new plant and machinery installed by a
manufacturing unit or a unit engaged in
generation and distribution of power.
If the asset is installed after 30th September of
the previous year only 10% of the additional
depreciation was allowed. Now the remaining
10% of the additional depreciation will be
allowed in the subsequent previous year.
Tax Deduction at Source
Sec 194 C : Transport operators exemption
from TDS is only where the operator has 10 or
less than 10 goods carriages ( Pan to be
provided )
Sec 192 A : EPF Trustees while paying the
accumulated PF balance should deduct 10%
TDS ( for payments of Rs 30000 or more )
Sec 192 : The person responsible for making the
payment of salary has to obtain from the assesse
the evidence or proof or particulars of
prescribed claims (including claim for set-off of
loss).
Sec 194I : Payment of Rent to Real Estate
Investment Trust (REIT) is exempt from TDS
194LBA and LBB : TDS to be deducted at 10%
by the business trust/Investment Fund on
payments to its unit holders
Sec 195 : Details of international payments (
whether tax is applicable or not ) to be disclosed
in the return filed
Restrictions on Cash Transactions
Section 269SS and 269T of the Income-tax Act
- prohibit acceptance or re-payment of advance
in cash of Rs 20,000 or more for any transaction
in immovable property
Tax on Royalty and Technical Services
Sec 115A :Income of the non-resident by way
of Royalty or Fees for technical services - the
tax rate is reduced from 25% to 10%.
State of AP
Additional investment allowance (@15%) and
additional depreciation (@15%) to new
manufacturing units set-up during the period
01.04.2015 to 31.03.2020 in notified areas of
Andhra Pradesh and Telangana
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5 | P a g e I n d i a U n i o n B u d g e t 2 0 1 5
80JJAA deduction
All manufacturing units are covered , shall be
available to a person deriving profits from manufacture of goods in a factory and paying
wages to new regular workmen. The eligibility
threshold of minimum 100 workmen is reduced
to fifty
Minimum Alternate Tax
Income from AOP and its corresponding
Expense is outside the ambit of MAT.
Also the amount of income and its
corresponding cost from transactions in
securities accruing or arising to an FII who has
invested in such securities in accordance with
the regulations made by SEBI
Administration
Section 255 of the Income-tax Act - increase
the monetary limit from Rs 5 lakh to Rs 15 lakh,
for a case to be heard by a Single Member
Bench of the ITAT.
Requirement for TAN
An individual buying an immovable property
from a resident is required to deduct tax but is
not required to obtain TAN for depositing the
tax so deducted. The Same benefit of not
requiring TAN has been extended to an
individual or HUF purchasing an immovable
property from a non-resident
Trusts
Any trust or institution registered under sec 12 AA cannot claim exemption under
section 10 except under Sec 10 (23C).
Registration under sec 12AA is permissible for claiming tax exemption for earlier years
also
Sec 12AA widened to give more power to commissioner to cancel approval.
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6 | P a g e I n d i a U n i o n B u d g e t 2 0 1 5
Budget Highlights - Indirect taxes
Customs and Excise
Reduction in number of levies:
Education Cess and Secondary & Higher
Education Cess leviable on excisable goods are
being subsumed in Basic Excise duty
Consequently, Education Cess and Secondary
& Higher Education Cess leviable on excisable
goods are being fully exempted.
The standard ad valorem rate of Basic
Excise Duty is being increased from 12% to
12.5%
Customs Education Cesses will continue to be
levied on imported goods.
Compliance Facilitation:
Online Central Excise/Service Tax Registration within two working days.
Time limit for taking CENVAT Credit on inputs and input services is being increased
from six months to one year.
Central Excise/Service Tax assessees are being allowed to issue digitally signed
invoices and maintain other records
electronically.
Waiver of penalty if duty and interest is paid within 30 days of the receipt of notice
and 15% penalty if paid after 30 days.
Section 11AC penalty without Mens Rea shall be maximum 10% only
Clean Energy Cess
The Scheduled rate of Clean Energy Cess levied on coal, lignite and peat is being
increased from Rs 100 per tonne to Rs 300
per tonne. The effective rate of Clean
Energy Cess is being increased from `100
per tonne to Rs 200 per tonne.
Service Tax
Rate increased from 12.36% to 14% with the
cess subsumed in the rate.
An enabling provision to empower the Central
Government to impose a Swachh Bharat Cess
on all or certain taxable services at a rate of 2%
on the value of such taxable services. This Cess
will be effective from a date to be notified.
Graded increase in interest rates for delay
beyond 6 months from 24% & 30%. 18% upto
6 months
Registration to be done in 2 days
Withdrawals from negative list:
Support Services provided by Government
or a Local Authority to a business entity
Access to Amusement Facilities.
Admission to Entertainment Events if fee
exceeds Rs. 500
Contract manufacturing /job work for
production of potable liquor for a
consideration
Betting, Gambling and Lottery
Exemptions withdrawn/restricted to
Exemption presently available on specified
services to the Government are restricted
further
Exemption to construction, erection,
commissioning or installation of original
works pertaining to an airport or port is
withdrawn
Exemption to services provided by a
performing artist in folk or classical art
form of music, or dance, or theatre is
limited only to such cases where amount
charged is up to Rs 1,00,000 for a
performance
Exemption to transportation of food stuff
by rail, or vessels or road is limited to food
grains including rice and pulses, flour, milk
and salt
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7 | P a g e I n d i a U n i o n B u d g e t 2 0 1 5
Transportation of agricultural produce is
separately exempt, and this exemption
would continue
Sec 65B (23A) Chit Foreman commission
is to get covered by the definition for
Service[hereafter this cannot be
Transaction in Money /Actionable Claim]
Reimbursements are taxable
Lottery dealer/agents commission is
taxable
New Exemptions:
Service provided by way of exhibition of movie by the exhibitor (theatre owner) to
the distributor or association of persons
consisting of such exhibitor as one of its
members
Services by way of pre-conditioning, pre-cooling, ripening, waxing, retail packing,
labelling of fruits and vegetables
Service provided by a Common Effluent Treatment Plant operator for treatment of
effluent
Admission to a museum, zoo, national park, wild life sanctuary, tiger reserve
Life insurance service provided by way of Varishtha Pension Bima Yojna
Ambulance services
Goods Transport Agency concept is now extended to Land Customs Station
Other Amendments
Differential amounts of Penalty for normal and Fraud or collusion cases introduced
Manpower supply and security services when provided by an individual, HUF or
partnership firm to a body corporate are to
be considered under full reverse charge
Reverse charge basis to be adopted by AMC for services mutual fund agents,
mutual fund distributors and agents of
lottery distributor
Abatements
Uniform rate of 30% on services by Rail, GTA Road and Vessel
60% on services by way of Air transport of passengers by Business Class
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