FINANCE
BILL, 2015
A.
Rates of Income Tax
·
Same as A.Y. 2015-16
·
Surcharge
Existing
|
New
|
|
Individual
( > 1 Crore)
|
10%
|
12%
|
Companies
(1 Crore > 10 Crore)
|
5%
|
7%
|
Companies
( > 10 Crore
|
10%
|
12%
|
·
Education Cess remains same.
B.
Measures to curb Black Money
Amendments
to Section 269SS and 269T
(Effective
from 01/06/2015)
Section
269SS
No
person shall take or accept from any other person (herein referred to as the
depositor),any loan or deposit or any
specified sum, otherwise than by an account payee cheque or account payee
bank draft or use of electronic clearing system through a bank account, if,—
“specified sum” means any sum of money
receivable, whether as advance or otherwise, in relation to transfer of an
immovable property, whether or not the transfer takes place.’
Section 269T
No branch of a banking company …………. other person
shall repay any loan or deposit made with it or specified advance
otherwise than by an account payee cheque or account payee bank draft drawn in
the name of the person who has made the loan or deposit or by use of
electronic clearing system through a bank account if—
“specified advance”
means any sum of money in the nature of advance, by whatever name called, in
relation to transfer of an immovable property, whether or not the transfer
takes place.’.
Deferment
of provisions relating to General Anti Avoidance Rule (“GAAR”)
As
provided in the Act, GAAR provisions are to come into effect from 1.04.2016.
It
is proposed that implementation of GAAR be deferred by two years and GAAR
provisions be made applicableto the income of the financial year 2017-18 (Assessment
Year 2018-19) and subsequent years by amendment of the Act. Further, investments
made up to 31.03.2017 are proposed to be protected from the applicability of
GAAR by amendment in the relevant rules in this regard.
Incentives
for the State of Andhra Pradesh and the State of Telangana
(A) Additional Investment Allowance : Section 32AD
: 15% of the cost of new asset acquired and installed
(B) Additional Depreciation at the rate
of 35%
Deduction
for employment of new workmen: Section
80JJAA
Existing
|
New
|
Corporate
Assessees
|
All Assessee
|
30 % Additional wages paid to the new regular
workmen in excess of 100 workmen
employed
|
30 % Additional wages paid to the new regular
workmen in excess of 50 workmen
employed
|
Allowance
of balance 50% additional depreciation
It
is proposed to provide that the balance 50% of the additional depreciation on
new plant or machinery acquired and used for less than 180 days which has not
been allowed in the year of acquisition and installation of such plant or
machinery, shall be allowed in the immediately succeeding previous year.
D. Ease of doing business/Dispute resolution
Raising
the threshold for specified domestic transaction
Section
92BA: Limit enhanced from Rs.5 Crores to Rs.20 Crores.
Raising
the income-limit of the cases that may be decided by single member bench of
ITAT
Present
Limit Rs. 5,00,000
Revised
Limit Rs. 15,00,000
Procedure
for appeal by revenue when an identical question of law is pending before Supreme
Court
Section
158AA.
To
avoid repetitive appeals on same question of law pending before the Supreme
Court.
Consent
of the assessee is necessary.
Abolition
of levy of wealth-tax under Wealth-tax Act, 1957
The
actual collection from the levy of wealth-tax during the financial year 2011-12
was Rs.788.67 crore and during the financial year 2012-13 was Rs.844.12 crore
only. The number of wealth-tax assessee was around 1.15 lakh in 2011-12. Although
only a nominal amount of revenue is collected from the levy of wealth-tax, this
levy created a significant amount of compliance burden on the assessees as well
as administrative burden on the department.
E. Benefits for individual taxpayers
Tax
benefits under section 80C for the girl child under the Sukanya Samriddhi
Account Scheme
Pursuant
to the Budget announcement in July 2014, a special small savings instrument for
the welfare of the girl child hasbeen introduced under the Sukanya Samriddhi
Account Rules, 2014. The following tax benefits have been envisaged in the Sukanya
Samriddhi Account scheme:-
i.
The investments made in
the Scheme will be eligible for deduction under section 80C of the Act. Even
for legal guardian of the girl child. (Amendment to Section 80C)
ii.
The interest accruing
on deposits in such account will be exempt from income tax.
iii. The withdrawal from the said scheme in accordance with the rules of the
said scheme will be exempt from tax. Section 10(11A)
Section 80CCD
Subsection
(1B) Additional investment of Rs.50,000/- ( In addition to Rs.1,50,000/- u/s 80C)
Raising
of Limits of Deductions under various sections
Section
|
Existing
|
New
|
|
80D
|
Regular
|
15,000
|
25,000
|
Senior citizen
|
20,000
|
30,000
|
|
80DDB
|
Regular
|
40,000
|
40,000
|
Senior citizen
|
60,000
|
80,000
|
|
80DD & 80U
|
Normal
Disability
|
50,000
|
75,000
|
Severe Disability
|
100,000
|
1,25,000
|
|
Section 80CCC
|
Annuity plan
of LIC
|
1,00,000
|
1,50,000
|
Other
Amendments
Section
80D Health Insurance premia
As a
welfare measure towards very senior citizens ,it is also proposed to provide
that any paymentmade on account of
medical expenditure in respect of a very
senior citizen, if no payment has been made to keep in force an insurance
on the health of such person, as does not exceed thirty thousand rupees shall
be allowed as deduction under section80D.
Section
80DDB
Instead
of certificate from specialist working in Government
Hospital- any hospital will be
acceptable.
F.
Rationalisation Measures
CHARITABLE
TRUSTS
Section
2(15)
Amendment
to definition of charitable purpose in the Income-tax Act
Primary Objects: Relief to Poor,
Medical Relief, Education and 'YOGA'
Yoga
as a specific category in the definition of charitable purpose on the lines of
education.
Advancement of any other object of general public
utility:
It
is proposed to amend the definition of charitable purpose to provide that the
advancement of any other object of general public utility shall not be a
charitable purpose, if it involves the carrying on of any activity in the
nature of trade, commerce or business, or any activity of rendering any service
in relation to any trade, commerce or business, for a cess or fee or any other consideration,
irrespective of the nature of use or application, or retention, of the income
from such activity, unless,-
i.
such activity is undertaken in the course of actual carrying out of such
advancement of any other object of general public utility; and
ii.
the aggregate receipts
from such activity or activities, during the previous year, do not exceed twenty percent of the total
receipts, of the trust or institution undertaking such activity or activities,
for the previous year.
Section
11
Accumulation
of Income by charitable trusts and institutions
Form
10 to be filed before due date of filing the return to claim accumulation of
income.
Further,
the benefit of accumulation would also not be available if return of income is
not furnished beforethe due date of filing return of income.
Furnishing
of return of income by certain universities and hospitals referred to in
section 10 (23C) of the Act
It
is proposed to amend the Act in order to provide that entities covered under
clauses (iiiab) and (iiiac) of clause (23C) ofsection 10 shall be mandatorily
required to file their return of income. (Substantially financed by Government)
Changes in TDS provisions
Section
194C- TDS from transporters
Original
clause
(6)
No deduction shall be made from any sum credited or paid or likely to be
credited or paid during the previous year to the account of a contractor during
the course of business of plying, hiring or leasing goods carriages, on
furnishing of his Permanent Account Number, to the person paying or crediting
such sum.
Revised
clause
(6)
No deduction shall be made from any sum credited or paid or likely to be
credited or paid during the previous year to the account of a contractor during
the course of business of plying, hiring or leasing goods carriages, on furnishing of where such contractor owns ten or less
goods carriages at any time during the previous year and furnishes a
declaration to that effect along with his Permanent Account Number, to
the person paying or crediting such sum.
Section
194A
·
Clause 194A(3)(v)
Original clause
To such income credited or paid by a co-operative
society to a member
thereof or to any other co-operative society;
Revised clause
To such income credited or paid by a co-operative
society (other than a co-operative
bank) to a member thereof or to any other co-operative society;
·
Limit of Rs.10,000
shall be computed with reference to the income credited or paid by the bank as a whole ( and not per branch ) where
such bank has adopted core banking
solutions.
·
TDS required also on
Interest on Recurring Deposits
Tax
Collection at Source (TCS)
·
Filing of correction
statement in case of TCS enabled.
·
Processing of TCS
statement is also enabled.
·
Intimation under TCS
processing will be:
i.
subject to rectification
under section154 of the Act;
ii.
appealable under
section 246A of the Act; and
iii.
deemed as notice of
demand under section 156 of the Act.
Section 192
Government
DDOs requiring filing of TDS return in Form 24G:
Penalty
for delay Rs.100 per day made applicable.
All
DDO are required to obtain from the assessee
Evidence
or proof or particulars of the prescribedclaim (including claim for set-off of
loss) under the provisions of the Act in the prescribed form and manner.
Section 194 DA
Proceeds
from LIC above Rs.1 Lakhs ( Taxable) : Amendment to section 197A: Filing of
Form 15G/H enabled.
Section 195:
Filing
of Form 15CA and Form CB made applicable even in respect of any sum, whether chargeable to tax or not, to a
non-resident, not being a company, or to a foreign company
Penalty
of Rs.1,00,000/- proposed for submission of inaccurate information in these
forms. Section 273B
TDS from payments out of EPF (RPF)
Withdrawals from such funds before 5 years of
completion of service are taxable.
·
TDS proposed @ 10%.
·
Threshold Limit Rs.30,000
·
Filing of For 15G/15H allowed.
·
Section 206AA applicable for non submission of PAN
Section 203A: Requirement of obtaining TAN
Not
required in case of non auditable individual and HUF.
Residential
Status in respect of Companies
Existing
provisions
A
company is said to be resident in India in any previous year, if-
i.
it is an Indian
company; or
ii.
during that year,
the control and management of its affairs is situated wholly in India.
Proposed
Amendment
A
company shall be said to be resident in India in any previous year, if-
i.
it is an Indian
company; or
ii.
its place of
effective management, at any time in that year, is in India .
Place of effective management(POEM) : Means a
place where key management and commercial decisions that are necessary for the
conduct of the business of an entity as a whole are, in substance made.
Section
288
Trigger : C & AG
reports one instance of signing of Form 56F by a CA of a closely held company
whose brother was MD of the company.
Section 288 amended in line
with Section 141(3) of the Companies Act, 2013, prohibiting audits by the
interest parties such as:
·
An officer or employee of
the company.
·
A person who is partner
or who in the employment, of an officer or employee of the company.
·
A person who or his
relative or partner
·
A person holding any
security/interest in the company
·
A person indebted to the
company or its subsidiary, or its holding or associate company or subsidiary of
such holding company, in excess of Rs. 5 lacs rupees
Changes
relating to MAT Section 115JB/115JC
Excluded
The amount of income, being the share of the assessee in the
income of an association of persons or body of individuals, on which no
income-tax is payable in accordance with the provisions of section 86,
Penalty under Section 271(1)( c)
·
The
amount of tax sought to be evaded shall be the summation of tax sought to be
evaded under the general provisions and the tax sought to be evaded under the
provisionsof section 115JB or 115JC.
·
However,
if an amount of concealment of income on any issue is considered both under the
generalprovisions and provisions of section 115JB or 115JC then such amount
shall not be considered in computing tax sought to be evaded under provisions
of section 115JB or 115JC.
·
Further,
in a case where the provisions of section 115JB or 115JC are not applicable,
the computation of tax sought to be evaded under the provisions of section
115JB or 115JC shall be ignored.
Section
263
Following orders shall be deemed to be erroneous in so far as it
is prejudicial to the interests of the revenue, if, in the opinion of the
Principal Commissioner or Commissioner-
i.
the order is passed
without making inquiries or verification which, should have been made;
ii.
the order is passed
allowing any relief without inquiring into the claim;
iii.
the order has not been
made in accordance with any order, direction or instruction issued by the Board
under section 119; or
iv.
the order has not been
passed in accordance with any decision, prejudicial to the assessee, rendered
by the jurisdictional High Court or Supreme Court in the case of the assessee
or any other person.
Section 148
Approval for Reopening
Period
|
Approving Authority
|
Till 4 Years
|
Joint Commission
|
5th and 6th Year
|
Commissioner/ Principal
Commissioner
|
Section
153 C
Original Clause
Where the Assessing
Officer is satisfied that :
any money, bullion,
jewellery or other valuable article or thing or books of account or documents
seized or requisitioned belong to
any person,
other than the person
referred to in section 153A, then the books of account or documents or assets
seized or requisitioned shall be handed over
Revised Clause
where the Assessing
Officer is satisfied that :
·
any money, bullion,
jewellery or other valuable article or thing belongs to,
·
or any books of account
or documents seized or requisitioned pertain
to,
·
or any information
contained therein, relates to,
any person, other than the person referred to
in section 153A, then the books of account or documents or assets seized or
requisitioned shall be handed over
SETTLEMNENT
COMMISSION
a.
Cases reopened u/s 147
specifically allowed w.e.f. 01.10.2014.
b.
Deemed reopening if
similar issue involved in other years.
c.
Restriction in
approaching ITSC in respect of Companies or firms in which the Individual holds
50 % share etc.
SERVICETAX
1. Rate: The Service Tax rate is being increased from 12.36% to 14%.
2.
Swachh Bharat Cess Central
Government EMPOWERED to impose this on all or anyof the taxable services at a
rate of 2%.
3.
NEW TAXABLE SERVICS
o
Service
provided by way of access to amusement
facility providing fun or recreation bymeans of rides, gaming devices or
bowling alleys in amusement parks, amusement arcades, water parks, theme
parksor such other places.
o
Service
by way of admission to entertainment
event of concerts, non-recognized sportingevents, pageants, music concerts,
award functions, if the amount charged is more than Rs.500 for right to
admissionto such an event
§
Exemption
to Exhibition ofcinematographic film, circus, recognized sporting events,
dance, theatrical performances including drama and ballets,by way of the
Negative List entry shall be continued.
o
Any
service by way of carrying out any processes for production or manufactureof alcoholic liquor for human consumption.
o
All
services provided by the Government or local authorityto a business entity,
except the services that are specifically exempted, or covered by any other
entry in the Negative List,shall be liable to Service Tax .
o
Services
of construction, erection, commissioning, etc. provided to theGovernment, a
local authority or a governmental authority
(a) a civil structure or any
other original works meant predominantly for use other than for
commerce, industry, or any other business or profession;
(b) a structure meant predominantly for
use as (i) an educational, (ii) a clinical, or (iii) an
art or cultural establishment;
(c) a residential complex predominantly
meant for self-use or the use of their employees or other persons specified in
theExplanation 1 to clause 44 of section 65 B of the said Act;
4.
New Exemptions:
·
Services
by way of pre-conditioning, pre-cooling, ripening, waxing, retail packing,
labeling of fruits and vegetables
•
Service
provided by a Common Effluent Treatment Plant operator for treatment of
effluent
•
Service
provided by way of exhibition of movie by the exhibitor (theatre owner) to the
distributor or association of personsconsisting of such exhibitor as one of
it’s members all ambulance services.
•
Service
provided by way of admission to a museum, zoo, national park, wild life
sanctuary,and a tiger reserve is beingexempted.
•
Exemption
to services provided by a performing artist in folk or classical art form of (i)
music, or (ii) dance, or (iii) theater, will be limited only to such cases
where amount charged is uptoRs 1,00,000 for a performance.
5. Section
67: Valuation of services:
Reimbursable expenditure or cost incurred and charged by the
service provider- included .
6.
Penalties
Cases not involving fraud or collusion or
wilfulmis-statement orsuppression of facts or contravention of any provision of
the Act or rules with the intent to evade payment of service tax, -
·
penalty
not to exceed ten per cent of service tax amount involved in such cases;(100 %)
·
no
penalty is to be paid if service tax and interest is paid within 30 days of
issuance of notice under section 73 (1); (15% )
·
Reduced
penalty equal to 25% of the penalty imposed by the Central Excise officer by
way of an order is to be paidif the service tax, interest and reduced penalty
is paid within 30 days of such order;(25%)
·
if the
service tax amount gets reduced in any appellate proceeding, then penalty
amount shall also stand modifiedaccordingly, and benefit of reduced penalty (
25% of penalty imposed) shall be admissible if service tax, interest andreduced
penalty is paid within 30 days of such appellate order.
·
Section
80, that provided for waiver of penalty in specified situations, is being
omitted.
7.
ABETMENTS
GTA : 30 % Taxable for all –Rail,
Vessel and Road.
8. REVERSE
CHARGE
·
100% RCM
for
Manpower supply and security services
when provided by an individual, HUF, or partnership firm to a body corporate.
·
Services provided
by mutual fund agents, mutual fund distributors and agents of lottery
distributor.
·
In
respect of sub-agents of lottery, Service Tax shall be paid by the distributor
or selling agent of lottery.
