1. Seller shall collect the tax at the rate of one per cent from the purchaser on sale of motor vehicle of the value exceeding ten lakh rupees and sale in cash of any goods (other than bullion and jewellery), or providing of any services (other than payments on which tax is deducted at source under Chapter XVII-B) exceeding two lakh rupees.
2. Mandatory stay of demand of tax once assessee pays 15% of disputed tax, while the appeal is pending before Commissioner of Income-tax (Appeals). In case of deviation, assessing officer has to get orders of his superiors. The tax payer also has an option to go to superior officer in case he does not agree with conditions of stay order passed by the subordinate officer.”
3. Startup to enjoy tax deduction to the extent of 100% of its profit in 3 out of 5 year, but they are subject to MAT u/s 115JB.
4. Period under second proviso of clause (b) of section 24 be amended to provide that the deduction under the said proviso on account of interest paid on capital borrowed for acquisition or construction of a self-occupied house property shall be available if the acquisition or construction is completed within five years from the end of the financial year in which capital was borrowed.
5. New Dispute Resolution Scheme to be introduced. No penalty in respect of cases with disputed tax up to Rs 10 lakh. Cases with disputed tax exceeding Rs 10 lakh to be subjected to 25% of the minimum of the imposable penalty. Any pending appeal against a penalty order can also be settled by paying 25% of the minimum of the imposable penalty and tax interest on quantum addition
6. CIT to passed order for waiver of interest under section 273A, 273AA or 220(2A) within the period of 1 year from the end of the month in which application is received. Earlier there was no time limit for the passing of order under this section.
7. No set off of losses will be allowed when income is assessed u/s 68 , 69 or 69A of the income tax Act , Section 115BBE.
8. Holding period in respect of unquoted shares is reduce to 2 year from 3 year for the purpose of calculation of capital gain
9. Time limit for completing Assessment is reduce to 21 months from 24 months that is till December instead of March
10. Additional Interest on refund will be received @3%, if refund arises out of appeal affect being delayed beyond the time provided under the act. Interest is paid from the date allowed for passing appeal effect order till actual passing of order.
11. Penalty rates to be 50% of tax in case of underreporting of income and 200% of tax where there is misreporting of facts. Earlier it was 100% to 300% of taxes.
12. 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.
13. Relief under Section 87A proposed to be increased from Rs. 2,000 to Rs. 5,000.
14. Deduction under Section 80GG for individuals paying rent but not receiving HRA proposed to be increased from Rs. 24,000 to Rs. 60,000.
15. 44AB limit amended for Professional from 25Lac to 50Lac with presumptive income shown at 50% of gross receipt.
16. Corporate tax reduced to 29% for small business having turnover less than 5 crores.
17. Propose to increase and/or rationalise tax deducted at source limit.
18. Dividend will be taxable at 10% for individuals/HUF if dividend is received in excess of 10 lakhs annum.
19. STT increase in options from 0.017% to 0.05%.
20. Limited period compliance window for undisclosed income for domestic blackmoney by paying 45% tax on black money and to come clean, No scrutiny will be done. Compliance window will be open from 1.06.2016 to 30.06.2016
21. First home buyers an additional deduction of interest of 50,000 provided value of house does not exceed Rs 50 lakh
22. DDT exempted from REITs.
23. New manufacturing companies incorporated after March 1, 2016 have to pay tax at 25% only.
24. Increases the turnover limit of presumptive taxation Scheme to 2 crores u/s 44AD for all assessee other than corporate.
25. Company Act to amended and Registration of Companies should be given in one day .
26. Deduction under Section 80JJAA proposed to be extended to all assessee who are subject to tax audit.
27. Service Tax is increased by 0.50% by new cess called krishi kalian cess and now Service Tax is 15%( 14%+0.5%+0.5%).
28. Accumulated balance in provident fund will be taxable to the extent of 60% and 40% is exempt. However, post budget there were some clarification that only interest is taxable and not whole accumulated balance in PF.
29. Service Tax will be charged on forward basis on services of Advocates and service by distributor or Mutual Funds instead of reverse charge mechanism.
Analysis is done by CA. Rahul Sureka, ACA,CS and can be reached at email@example.com or 9773450180.