CA Bikash Bogi
BULLET POINT SUMMARY of Direct Tax Provisions
INDIVIDUALS / HUF / AOP / BOI
- No change in income tax rates.
- Income Tax Exemption limit increased to Rs. 2.5 Lakh from Rs. 2 lakh. For Senior citizens exemption limit increased to Rs. 3 lakh.
- Deduction u/s 80C increased to Rs. 1.5 lakh from Rs. 1 lakh
- Deduction for Interest on housing loan for Self Occupied property increased to Rs. 2 Lakh from 1.5 lakh.
- No change in Corporate Tax rate.
- Investment allowance at 15% for 3 years to manufacturing company which invest more than Rs. 25 crore in plant and machinery.
- 10 Years Tax Holiday for Power Sector if begins generation, distribution & transmission of Power by 31.03.2017.
- Investment Linked deduction extended to two new ventures ; Slurry Pipeline for transportation of Iron Ore & Semi Conductor wafer fabrication manufacturing units.
- Expenditure on Corporate Social Responsibility [CSR] shall not be allowed as deduction while calculating business income.
- For Non-deduction of TDS, only 30% of the expenditure will be disallowed instead of earlier disallowance of 100% of the expenditure, if TDS rate is between 1% – 10%.
- For business of plying, hiring or leasing goods carriage [up-to 10 vehicle], the presumptive income shall be Rs. 7500/- per month.
- Credit of Alternative Minimum Tax will now be available to taxpayers and allowed to carry forward to adjust normal tax liability of succeeding years.
INTERNATIONAL TRANSACTIONS / NRI / FOREIGN TAXATION:
- Roll Back Provisions for Advance Pricing Agreement Scheme, as per which APA taken for future transactions will also applicable for transactions of preceding four years [subject to conditions].
- “Range Concept” introduced in Transfer Pricing provisions as per which Arm’s Length Price shall be calculated based on Multi-year data instead of single year data.
- Transfer Pricing Officer [TPO] can levy penalty u/s 271G.
- Dividend received from Foreign Company shall be taxed at Concessional rate of 15%. No sunset clause.
- Income Arising to Foreign Portfolio Investors from Transaction in securities will be treated as capital gains and will tax accordingly.
- TDS on any Interest payment made for “any bonds” issued in foreign currency shall be deducted @ 5% [earlier it was only on “Infrastructure bonds”]. The eligible date extended to 31.03.2017.
- Long Term capital Gain of units of Mutual Funds [other than Equity oriented funds] shall be taxed @20%. Further, units have to hold at least 36 months for treating it as long term.
- To qualify as Long term capital assets, Unlisted securities is required to be hold for at-least 36 months instead of earlier period of 12 months.
- Advance Ruling shall be extended to Resident Taxpayers and existing number of benches of Advance Ruling shall be increased.
- More Stringent Provisions related to furnishing of Annual Information Return.
- For resolving the disputes, Scope of Settlement Commission will be expanded.
- Dividend distribution tax shall be paid on gross dividend paid instead on dividend net of taxes.
- Tax Regime to Infrastructure Investment Trusts and Real Estate Investment Trusts to set up in accordance with regulations of SEBI.
- Compulsory Imprisonment and fine, if the assesses willfully fails to produce books of accounts and other details as required in section 142(1) or 142(2A)
OTHER MAJOR ANNOUNCEMENTS:
- A high Level committee constituted by CBDT shall take care of issue of indirect transfer on retrospective amendments on case to case basis.
- No more Retrospective Amendments in Tax Laws.
- 60 New Aaykar Seva Kendra to be opened in financial year 2014-15 to promote tax payer friendly services.
- Government will review the Direct Tax Code [DTC] in its present shape and review it.
( Author is a Partner with SBR & Co. Chartered Accountants Mumbai and can be reached at firstname.lastname@example.org)