"01 February 2017" Archive

Political Parties cannot receive cash donation above Rs. 2000 from one person

In a significant step to cleanse the system of funding of political parties, Shri Jaitley said that donations to political parties can soon be made by purchasing electoral bonds from authorized banks. The Finance Minister said that the Government will soon frame a Scheme in this regard and an amendment is being proposed to the Reserve Ban...

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Posted Under: Income Tax |

S.194J TDS rate proposed at 2% on Call Center business Income

In order to promote ease of doing business, it is proposed to amend section 194J to reduce the rate of deduction of tax at source to two per cent. from ten per cent. in case of payments received or credited to a payee, being a person engaged only in the business of operation of call center....

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Posted Under: Income Tax |

Budget restricts set-off of loss from House property to Rs. 2 Lakh

It is proposed to insert sub-section (3A) in section 71 to provide that set-off of loss under the head Income from house property"against any other head of income shall be restricted to two lakh rupees for any assessment year....

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Posted Under: Income Tax | ,

Mandatory furnishing of return by certain exempt entities

The existing provisions of sub-section (4C) of section 139 mandate filing of return by certain entities which are exempt from the levy of income-tax....

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Posted Under: Income Tax |

Secondary adjustments provisions in Transfer Pricing cases

Secondary adjustment means an adjustment in the books of accounts of the assessee and its associated enterprise to reflect that the actual allocation of profits between the assessee and its associated enterprise are consistent with the transfer price determined as a result of primary adjustment...

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Posted Under: Income Tax |

Limit on Interest deduction to counter cross-border profit shifting

Country's tax administrations often introduce rules that place a limit on the amount of interest that can be deducted in computing a company's profit for tax purposes. Such rules are designed to counter cross-border shifting of profit through excessive interest payments, and thus aim to protect a country's tax base....

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Posted Under: Income Tax |

Section 40(a)(ia) proposed to apply to Income from Other Sources

Provisions of section 40(a)(ia) shall, so far as they may be, apply in computing income chargeable under the head income from other sources as they apply in computing income chargeable under the head Profit and gains of business or Profession....

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Posted Under: Income Tax |

Budget 2017 widens scope of Income from other sources

It is proposed to insert a new clause (x) in sub-section (2) of section 56 so as to provide that receipt of sum of money or property by any person without consideration or for inadequate consideration in excess of Rs. 50,000 shall be chargeable to tax in hands of recipient under head Income from other sources....

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Posted Under: Income Tax |

FMV to be full value of consideration in case of unquoted shares

It is proposed to insert a new section 50CA to provide that 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,...

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Posted Under: Income Tax |

FM announces anti graft & rationalisation measures in Income tax

It is proposed to merge the Authority for Advance Ruling (AAR) for Income-Tax with AAR for Customs, Central Excise and Service Tax; and create common AAR. It is proposed to make the orders passed by the authority under section 10(23C) of the Income-tax Act, appealable before the Tribunal....

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Posted Under: Income Tax |

FM announces 9 measures for revenue mobilization

In order to address the issue of thin capitalisation, a proposal has been made that the interest paid by an Indian company or permanent establishment of a foreign company, shall not be allowed as deduction in computing its taxable profit subject to certain conditions....

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Posted Under: Income Tax |

No Section 10(38) exemption in case of no STT on acquisition

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 1st day of October, 2004 shall be available only if the acquisition of share is chargeable to Securities Transactions Tax under Chapter VII of the Financ...

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Posted Under: Income Tax |

Increase in deduction limit in respect of provision for bad debts

The existing provisions of sub-clause (a) of section 36(1 )(viia) of the Act, inter-alia provides that a scheduled bank (not being a bank incorporated by or under the laws of a country outside India) or a non-scheduled bank or a co-operative bank other than a primary agricultural credit society...

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Posted Under: Income Tax |

Budget 2017 extends scope of section 43D to Co-operative Banks

The existing provisions of section 43D of the Act, inter-alia, provides that interest income in relation to certain categories of bad or doubtful debts received by certain institutions or banks or corporations or companies, shall be chargeable to tax in the previous year in which it is credited to its profit and loss account for that year...

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Posted Under: Income Tax |

Budget proposes carry forward of MAT / AMT credit for 15 Years

With a view to provide relief to the assessees paying MAT, it is proposed to amend section 115JAA to provide that the tax credit determined under this section can be carried forward up to fifteenth assessment years immediately succeeding the assessment years in which such tax credit becomes allowable....

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Posted Under: Income Tax |

Budget 2017 extends period for claiming tax deduction by start-ups

In view the fact that start-ups may take time to derive profit out of their business, it is proposed to provide that deduction under section 80-IAC can be claimed by an eligible start-up for any three consecutive assessment years out of seven years beginning from the year in which such eligible start-up is incorporated....

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Posted Under: Income Tax |

Extension of eligible period of concessional tax rate U/s. 194LD- Budget 2017

It is proposed to amend section 194LD to provide that concessional rate of five per cent. TDS on interest will now be available on interest payable before 1st July, 2020....

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Posted Under: Income Tax |

Extension of period of concessional tax rate on interest on ECB

The existing provisions of section 1 94LC of Act provide that interest payable to a non-resident by a specified company on borrowings made by it in foreign currency from sources outside India under a loan agreement or by way of issue of any long-term bond including long-term infrastructure bond shall be eligible for concessional TDS of fi...

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Posted Under: Income Tax |

Measures for Promoting Affordable Housing and Real Estate Sector

For the new capital for State of Andhra Pradesh which is being constructed by innovative land-pooling mechanism without use of the Land Acquisition Act, the Union Finance Minister proposed to exempt from capital gains tax all persons who were holding land on 2.6.2014 - the date on which the State of Andhra Pradesh was re-organised - and w...

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Posted Under: Income Tax |

First combined Budget including Railways, presented

Regarding Metro Rail, the Finance Minister informed that a new Metro Rail Policy will be announced with focus on innovative models of implementation and financing, as well as standardization and indigenization of hardware and software. This will open-up new job opportunities for our youth. A new Metro Rail Act will be enacted by rationali...

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Posted Under: Income Tax |

Short and easy to understand analysis of Union Budget 2017

New section 50CA has been introduced to make deemed sale of equity shares inline with deemed sale consideration in case of Immovable property. As per new section 50CA Fair value of unlisted shares to be taken as deemed sale value for the purpose of calculation of Capital Gain tax....

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Posted Under: Income Tax |

Bill to be tabled in Parliament soon to crack down on ponzy schemes

To check bank NPAs and enhance capital flows into the securitisation industry, Shri Jaitley said that the listing and trading of Security Receipts issued by a securitisation company or a reconstruction company under the SARFAESI Act will be permitted in SEBI registered stock exchanges....

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Posted Under: Income Tax |

GST Council finalised recommendations on almost all issues

GST Council has finalised its recommendations on almost all the issues based on consensus, says Finance Minister in his Budget Speech.Extensive reach-out efforts to trade & industry for GST to start from 1st April, 2017...

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Posted Under: Income Tax |

FM Relaxes Income Tax Requirements for small businesses

Presumptive income scheme for audit of entities raised from Rs. 1 crore to Rs. 2 crore; Threshold for maintenance of books for individuals and HUF more than doubled. Individual Insurance agents earning below taxable limit to be exempted from 5% TDS off commission after filing self-declaration...

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Posted Under: Income Tax |

GST to spur growth, competitiveness, and greater transparency

Finance Minister said, the advantages of GST for the economy in terms of spurring growth, competitiveness, indirect tax simplification and greater transparency have already been extensively discussed in both the Houses of Parliament....

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Posted Under: Income Tax |

Budget 2017 proposes to ban Cash Transaction above Rs 3 lakh

Shri Arun Jaitley in his Budget Speech today said that the Government has decided that no transaction above Rs 3 lakh will be permitted in cash. Accepting a suggestion by Special Investigation Team on Black Money to ban cash transactions above Rs 3 lakhs, the Finance Minister has proposed an amendment to the Income-tax Act in the Finance ...

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Posted Under: Income Tax |

Budget 2017: Reduction in duty on Renewable Energy Sector and Cashless Transaction Devices

In a bid to incentivize domestic value addition under Make in India initiative of the Government, the Finance Minister has proposed to reduce Customs and Excise duties on several items related to the Renewable Energy Sector. ...

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Posted Under: Income Tax |

No notional income for house property held as stock-in-trade

Considering the business exigencies in case of real estate developers, it is proposed to amend the said section so as to provide that where the house property consisting of any building and land appurtenant thereto is held as stock-in-trade and the property or any part of the property is not let during the whole or any part of the previou...

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Posted Under: Income Tax |

Shifting base year from 1981 to 2001 for capital gain computation

In order to revise the base year for computation of capital gains, it is proposed to amend section 55 of the Act so as to provide that the cost of acquisition of an asset acquired before 01.04.2001 shall be allowed to be taken as fair market value as on 1st April, 2001 and the cost of improvement shall include only those capital expenses ...

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Posted Under: Income Tax |

Govt may notify more bonds eligible for section 54EC exemption

In order to widen the scope of the section for sectors which may raise fund by issue of bonds eligible for exemption under section 54EC, it is proposed to amend section 54EC so as 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 ...

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Posted Under: Income Tax |

Section 80IBA conditions relaxed to promote Affordable Housing

In order to promote the development of affordable housing sector, it is proposed to amend section 80-IBA so as to provide the following relaxations:—(i) The size of residential unit shall be measured by taking into account thecarpet area as defined in Real Estate (Regulation and Development) Act, 2016 and not built-up area...

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Posted Under: Income Tax |

Immovable property held for 2 Years to be considered Long Term capital asset

It is proposed to amend section 2 (42A) of the Act so as to reduce the period of holding from the existing 36 months to 24 months in case of immovable property, being land or building or both, to qualify as long term capital asset....

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Posted Under: Income Tax |

TDS on rent made applicable to Individual / HUF even if no Tax Audit

The existing provisions of section 194-I of the Act, inter alia, provide for deduction of tax at source at the time of credit or payment of rent to the account of the payee beyond a threshold limit....

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Posted Under: Income Tax |

Budget 2017 rationalises taxation of income by way of dividend

Under the existing provisions of section 115BBDA, income by way of dividend in excess of Rs. 10 lakh is chargeable to tax at the rate of 10% on gross basis in case of a resident individual, Hindu undivided family or firm....

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Posted Under: Income Tax |

Income-tax Rates for income liable to tax for A.Y. 2018-19

In respect of income of all categories of assessees liable to tax for the assessment year 2017-18, the rates of income-tax have been specified in Part I of the First Schedule to the Bill. These are the same as those laid down in Part III of the First Schedule to the Finance Act, 2016 as amended by the Taxation Laws (Second Amendment) Act,...

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Posted Under: Income Tax |

Consolidation of plans within a scheme of mutual fund

Finance Act,201 6 amended section 47 of the Act so as to provide tax neutrality to the transfer of units in a consolidating plan of mutual fund scheme made in consideration of the allotment of units in the consolidated plan of that mutual fund scheme....

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Posted Under: Income Tax |

Tabular Analysis of Service Tax Amendments vide Budget 2017

Article Discusses Proposed Amendment in Service Tax Provisions related to Legislative changes, Changes regarding Authority for Advance Ruling, New Exemptions and Rationalisation measure under Union Budget 2017. A. Legislative changes Existing Proposed 1. The Negative List entry in respect of “services by way of carrying out any proce...

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Posted Under: Income Tax |

Income Tax Rate Chart for Financial Year 2017-18

CA Vinay Lunkad S Is it worthwhile to continue the business as a Partnership Firm / LLP or to run as a corporate , since the later one enjoys the benefit of paying tax @ lesser rate by 5% , the intention of the Government seems to be give more benefits to a much organised […]...

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Posted Under: Income Tax |

Capital assets acquisition cost in case of tax levy on accreted income

Where the capital gain arises from the transfer of an asset, being the asset held by a trust or an institution in respect of which accreted income has been computed, and the tax has been paid thereon in accordance with the provisions of Chapter XII-EB,...

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Posted Under: Income Tax |

Budget 2017 Strengthens PAN quoting mechanism in TCS regime

In order to strengthen the PAN mechanism, it is proposed to insert new section 206CC to provide the following: i. any person paying any sum or amount, on which tax is collectable at source under Chapter XVII BB (hereafter referred to as collectee) shall furnish his Permanent Account Number to the person responsible for collecting such tax...

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Posted Under: Income Tax |

Section 80CCG deduction to be discontinued from A.Y. 2018-19

Under the existing provisions of section 80CCG, deduction for three consecutive assessment years is allowed upto Rs. 25,000 to a resident individual for investment made in listed equity shares or listed units of an equity oriented fund subject to fulfilment of certain conditions....

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Posted Under: Income Tax |

Union Budget 2017 – An Analysis

Key highlights of the Finance Budget are presented as under: Reduction in Income tax rate from 10% to 5 % for individuals having income between Rs. 2.5Lakhs – Rs. 5Lakhs. This is clear cut reduction in 50% rate for the above slab. The below table will bring out clear cut impact of the change :...

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Posted Under: Income Tax |

Finance Bill 2017 – Service Tax Proposals

Union Finance Minister, Shri Arun Jaitley has tabled the Finance Bill, 2017 in Lok Sabha today. As the Government is determined to introduce Goods and Services Tax (GST), the biggest ever indirect tax reform of Independent India, the Finance Bill,2017 amendments with respect to Service Tax is kept at minimum....

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Posted Under: Income Tax |

Special scheme for employment in Leather & Footwear Industries

Finance Minister Shri Arun Jaitley has also proposed that a Special Scheme for creating employment in leather and footwear industries will also be implemented. This will be on the line of already launched a Special Scheme for creating employment in the textile sector....

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Posted Under: Income Tax |

Budget 2017: 100% village electrification by 1st May 2018

Shri Jaitley expressed the hope that 100% village electrification would be achieved by 1st May 2018 and he added that an increased allocation of Rs 4,814 crores has been proposed under the Deendayal Upadhyaya Gram Jyoti Yojana in 2017-18....

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Posted Under: Income Tax |

Measures for Agricultural Sector in Union Budget 2017

Admitting that Dairy is an important source of additional income for the farmers, the Finance Minister Shri Jaitley announced that a Dairy Processing and Infrastructure Development Fund would be set-up in NABARD with a corpus of Rs 8,000 crores over 3 years. He said that issuance of Soil Health Cards has gathered momentum, even as the Gov...

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Posted Under: Income Tax |

Focus to tax huge cash deposits after Demonetization

Government will put greater focus on quality of expenditure and higher tax realisation from the huge cash deposits in Banks, triggered by demonetization, Shri Jaitely concluded....

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Posted Under: Income Tax |

25% Income Tax rate for companies with turnover upto Rs. 50 Crore

The Government gave income tax exemptions to Start-Ups with certain conditions last year. For the purpose of carry forward of losses in respect of such Start-Ups, the condition of continuous holding of 51% of voting rights has been relaxed subject to the condition that the holding of the original promoter/promoters continues. Also the pro...

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Posted Under: Income Tax |

Budget’s thrust relief to Middle Class, Affordable Housing, Curbing Black Money

Concluding his Budget Speech, Shri Arun Jaitley outlined the Government’s overarching agenda: “Transform, Energise and Clean India’. Government’s emphasis will be on implementing all these proposals for the benefit of the farmers, the poor and the under privileged sections of the society, the Finance Minister added....

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Posted Under: Income Tax |

A brief Overview of Union Budget 2017

Listing and trading of Security Receipts issued by a securitisation company or a reconstruction company under the SARFAESI Act will be permitted in SEBI registered stock exchanges. This will enhance capital flows in to the securitisation industry and will particularly be helpful to deal with bank NPAs....

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Posted Under: Income Tax |

Action plan to eliminate Kala-Azar, Filariasis, Leprosy & Measles

The Budget also proposes to amend the Drugs and Cosmetics Rules to ensure availability of drugs at reasonable prices and promote use of generic medicines. New rules for regulating medical devices will also be formulated. These rules will be internationally harmonised and attract investment into this sector. This will reduce the cost of su...

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Posted Under: Income Tax |

ICAI invites suggestions on tax proposals of Union Budget 2017-18

The Direct Taxes Committee, Indirect Taxes Committee and Committee on International Taxation invite suggestions on the tax proposals of the Finance Bill, 2017 for consideration and inclusion of the same in the Post Budget Memoranda to be submitted to the Ministry of Finance. Please submit your valuable suggestions latest by 15th February,...

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Posted Under: Income Tax |

ICAI President’s Message – February 2017

My dear professional colleagues, With the impending dawn of February, it is time to take stock of the activities, creativities and outcomes, during the Council Year 2016-17 for the furtherance of profession and national economy. With meticulous vision, our combined endeavours have yielded significant results. ICAI’s role of a partner-in...

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Posted Under: Income Tax |

Budget 2017: Legislative changes proposed in Excise & Custom Duty

Article Discusses the following-  Amendments in The Customs Act, 1962: Amendment in The Customs Tariff Act, 1975 Amendment in The First Schedule To Customs Tariff Act, 1975 Amendment in The Second Schedule To The Customs Tariff Act, 1975 [Clause 110 Of The Finance Bill, 2017] Other Proposals Involving Changes In BCD, CVD, SAD And Export ...

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Posted Under: Income Tax |

Budget 2017 Chapter wise changes relating to Excise Duty

The additional duty of excise levied under the Seventh Schedule to the Finance Act, 2005 [commonly known as health cess] on non-filter and filter cigarettes of sub-heading 2402 20 is being increased. Clause 146 of the Finance Bill, 2017 refers....

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Posted Under: Income Tax |

Budget 2017 Chapter wise changes relating to Customs

Basic Customs duty rate on Cashew nut, roasted, salted or roasted and salted [20081910] is being increased from 30% to 45% by increasing the tariff rate from 30% to 45%. Clause 109 (a) of the Finance Bill, 2017 refers. By virtue of declaration under the Provisional Collection of Taxes Act, 1931, this increase will come into force with imm...

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Posted Under: Income Tax |

Tax incentive for development of capital of Andhra Pradesh

As per section 96 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2014, the specified compensation received by the landowner in lieu of acquisition of land is exempt from income tax....

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Posted Under: Income Tax |

Prosecuting agency should be circumspect in initiating prosecution U/s. 21(2) of the POSCO Act against In-charge/Head of Institution and should allow them sufficient/reasonable time to enquire and report matter

Kamal Prasad Patade Vs State of Chhattisgarh (Chhattisgarh High Court)

Invoking extraordinary jurisdiction of this Court under Article 226 of the Constitution of India, the petitioner herein has filed the instant writ petition seeking quashment of charge-sheet filed against him by jurisdictional police in the criminal court alleging the commission of offence under Section 21 (2) of the Protection of Children...

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Budget 2017 Exhaustive analysis of Excise & Custom Duty changes

D.O.F.No.334/7/2017-TRU (01/02/2017)

Changes in Customs and Central Excise law and rates of duty have been proposed through the Finance Bill, 2017. To prescribe effective rates of duty and to carry out changes in the Rules made under the respective Acts, following notifications are being issued:...

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Explanatory Memoranda to Excise, Custom & Service Tax notification

Explanatory Memoranda to notification Nos. 3 to 6/2017-Customs, dated 2.2.2017 Sl. No. Notification No. Description 1. 3/2017-Customs Seeks to further amend Notification No. 27/2011-Customs dated 1.3.2011. 2. 4/2017-Customs Seeks to further amend Notification No. 21/2012-Customs, dated the 17.03.2012 so as to specify the rate of addition...

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Posted Under: Income Tax |

Budget 2017- Exhaustive Analysis of Changes in Service Tax

F. No.334/7/2017-TRU (01/02/2017)

Clauses 120 to 128 of the Bill cover the amendments made to,- • Chapters V and VA of the Finance Act, 1994;• the Service Tax (Determination of Value) Rules, 2006; Other changes are being given effect to by inserting new entries, and amending/omitting existing entries in notification No. 25/2012-ST dated 20.6.2012 and by amending the ...

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Download Finance Bill / Union Budget 2017 tabled in Lok Sabha

Finance Minister Arun Jaitley has Presented his 3rd Union Budget today in Lk Sabha. Vide this Budget Finance Minister has proposed Changes in around 150 Provisions. We have attached herewith copy of Finance Bill  2017 i.e. Union Budget 2017 as presented in Lok Sabha for ready reference of Our readers. Click here to Download Copy of [&he...

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Posted Under: Income Tax |

Key Features of Union Budget 2017-2018

In the last two and half years administration has moved from discretionary, favouritism based to system and transparency based Inflation brought under control. CPI-based inflation declined from 6% in July 2016 to 3.4% in December, 2016...

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Posted Under: Income Tax |

Budget 2017-2018-Speech of Arun Jaitley Minister of Finance

Budget 2017-2018 Speech of Arun Jaitley Minister of Finance February 1, 2017 Madam Speaker, On this auspicious day of Vasant Panchami, I rise to present the Budget for 2017-18. Spring is a season of optimism. I extend my warm greetings to everyone on this occasion. 2. Madam Speaker, our Government was elected amidst huge expectations [&he...

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Posted Under: Income Tax |

Key to the Union Budget documents 2017-18

The list of Budget documents presented to the Parliament, besides the Finance Ministers Budget Speech, are the following...

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Posted Under: Income Tax |

Union Budget 2017 Live and Highlight

We are largely a tax non-compliant society & the burden of tax-evaders falls on honest taxpayers : FM Rate of growth in advance tax in personal income tax in last 3 quarters of this financial year is as high as 34.8% 76 lakh individuals reported income over Rs 5 lakh, 56 lakh of them are […]...

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Posted Under: Income Tax |

Section 35AC: Income Tax Notification No. 3/2017 Dated: 01.02.2017

Notification No. 3/2017-Income Tax [S.O.333 (E)] (01/02/2017)

Section 35AC- Notifies the various institutions Approved by the National Committee - Income Tax Notification No. 3/2017 - Dated 1-2-2017...

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Cabinet approves Indian Institutes of Information Technology (Amendment) Bill, 2017

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its approval for introduction of The Indian Institutes of Information Technology (Amendment) Bill, 2017 in Parliament....

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Posted Under: Income Tax |

Key Highlights of Economic Survey 2016-17

Hon’ble Finance Minister Shri Arun Jaitley tabled today Economic Survey Report 2017 in the Parliament, outlining the broad direction of the Union Budget 2017 and the economic performance of the Country....

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Posted Under: Income Tax |

EPFO Modifies guidelines for rates of Levy of Surcharge

No. Exem/10(16)2016/28265 (01/02/2017)

Modifies guidelines for rates of Levy of Surcharge in view of New Pattern of Investment prescribed by the Government of India vide notification No. S.O. 1433 (E) dated 29.05.2015 to be levied on BoT of the Exempted/Relaxed Establishments by RPFC on A/c of deviation from the prescribed pattern of investment - Regarding....

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Why Tax evasion and Black Money culture in India?

If we analyze, we will understand that, it is tendency of the people to save tax, they do tax planning. If the Tax rates are too high, tax planning and ways and means to save tax will emerge...

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Posted Under: Income Tax |

All about Central Excise & Service Tax Assessee Migration to GSTN

Once the list of registrations in ST to be issued Provisional IDs is selected (including both Centralized and Non-Centralized), this would be checked with the list of registrations selected for Provisional IDs for CE. All ST registrations, where the combination of ‘State’ and ‘PAN’ is same as that used in any of the CE registratio...

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Posted Under: Income Tax |

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