To curb the flow of unaccounted money in the bullion & jewellery trade, the Finance Bill proposes the collection of tax at source (TCS) by the seller at the rate of 1 per cent of the sale amount from the buyer for all cash transactions exceeding Rs.2 lakh. Responding to the representations made by the jewellery industry that this would cause undue hardship, I propose to raise the threshold limit for TCS on cash purchases of jewellery to Rs.5 lakh from the present Rs.2 lakh. The threshold limit for TCS on cash purchase of bullion shall be retained at Rs.2 lakh. However, it is being clarified that bullion will not include any coin or other article weighing 10 gms or less.
Exemption for specified services relating to agriculture in the Negative List has also been extended to agricultural produce enlarging the scope of the entry.
The negative list has been drawn keeping in view the federal nature of the polity. Some of the States, through the Empowered Committee of State Finance Ministers, have expressed their concerns. I have decided to address their concerns by making changes in the definition of “service” which will exclude the activities specified in the Constitution as “deemed sale of goods”. The definition of “works contract” has also been enlarged to include movable properties.
The Finance Bill proposes that every transferee of immovable property (other than agricultural land), at the time of making payment for transfer of the property, shall deduct tax at the rate of 1% of such sum. I have received a number of representations pointing out the additional compliance burden this measure would impose. I, therefore, propose to withdraw this provision for levy of TDS on transfer of immovable property.
Currently, long term capital gain arising from sale of unlisted securities in the case of Foreign Institutional Investors is taxed at the rate of 10% while other non-resident investors, including Private Equity investors are taxed at the rate of 20%. In order to give parity to such investors, I propose to reduce the rate in their case from 20% to 10% on the same lines as applicable to FIIs.
In order to augment long-term low cost funds from abroad for the infrastructure sector, Finance Bill proposes a lower rate of withholding tax of 5% for funding specific sectors through foreign borrowings. To further facilitate access to such borrowings, I propose to extend the lower rate of withholding tax to all businesses. This lower rate of tax would also be available for funds raised through long term infrastructure bonds in addition to borrowing under a loan agreement.
I presented the Budget for the year 2012-13 on 16th of March, 2012. Since then I have received a large number of suggestions both from within the House and outside. Most of these pertain to tax proposals and range from seeking modification of some proposals to reconsideration or review of certain others. Requests have also been received for granting some fresh reliefs. I express my sincere gratitude to everyone for the interest they have shown in appraising my Budget proposals. I appreciate the valuable suggestions they have made and understand the concerns they have expressed.
I, Rajendra Kumar, Commissioner, Value Added Tax, Government of National Capital Territory of Delhi, in exercise of the powers conferred on me by sub-section (1) read with sub-section (3) of Section 70 of Delhi Value Added Tax Act, 2004, hereby order that notification No.F.7(433)/Policy-IINAT/2012/1464, dated 23.03.2012 shall be applicable only for movement of goods in pursuance of interstate sale, stock transfer and export.
The government today said accounting regulator ICAI has found irregularities in the operations of certain multinational audit firms in the country. The high-power committee appointed by the Institute of Chartered Accountants of India for examining the operation of Multinational Network Accounting Firms (MAFs) has found the irregularities, Minister of State for Corporate Affairs R P N Sigh said in a written reply to the Rajya Sabha.
It has been proposed in the Finance Bill that any consideration received by a closely held company in excess of the fair market value of its shares would be taxable. Considering the concerns raised by ‘angel’ investors who invest in start-up companies, I propose to provide an enabling provision in the Income Tax Act for exemption to a notified class of investors.
