Dr. Sanjiv Agarwal
The Union Budget 2012-13 and the Finance Bill, 2012 has been passed by the Lok Sabha and is likely to be passed by Rajya Sabha this week and then become a statute on President’s assent.
The final stand of the Government is tough on anti tax evasion provisions and on retrospective amendments. However, certain provisions have been diluted or deferred as the country does not seem to be prepared for the same. The major shift is on account of general anti avoidance rules (GAAR) which will now be applicable for the financial year 2013-14 ,ie, assessment year 2014-15. Also, the onus of proof has been shifted from tax payer to the revenue and facility of seeking advance ruling on GAAR has been provided.
Long term capital gains from sale of unlisted shares was fixed @ 20 percent. In order to bring it at par with foreign investors, it has been reduced to 10% similarly, sale of unlisted securities shall face a Securities Transaction Tax (STT) of 0.2 percent only.
THE FINAL CALL
- Withdrawal of Income Tax (TDS) on purchase of immovable property up to Rs 5 lakhs
- GAAR provisions postponed to 1.4.2014
- Securities transaction tax (SST) on sale of unlisted securities reduced to 0.2 percent
- No excise duty on purchase of jewellery upto Rs 5 lakh
- No service tax on deemed sale of goods
The controversial proposal to deduct tax @ 1 percent from the consideration of immovable property has been withdrawn and hence there would be no TDS on sale of immovable property. Similarly, proposal to collect tax on jewellery purchase if more than Rs 2 lakh @ 1 percent has been diluted and such tax collection by jeweler selling the jewelling in cash shall apply on sale of over Rs 5 lakh. In case of bullion (not jewellery), the limit of Rs 2 lakh less. The excise duty propose on all precious metal jewellery, branded or unbranded, was levied we.f. 17th March which now stands abolished w.e.f. 17th March itself. This is a major relief to jewellery and bullion trade in the state.
So far as service tax is concerned, service shall exclude deemed sale of goods on which VAT is payable. Agriculture produce will also be out of service tax net but movable properties have been included in scope works contract.
It is hoped that most of the direct tax proposals may become applicable soon after enactment. In case of service tax, government will announce a notified date from which changed law will be applicable