Abhirami Andhadhi

1 | P a g e I n d i a U n i o n B u d g e t 2 0 1 5

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Disclaimer: These are a few of the Highlights of the Union Budget 2015. Expert advice and user discretion is recommended prior to application of the contents of this document to

specific situations

Budget Highlights 2015

Budget Highlights Direct Taxes

Budget Highlights Indirect Taxes


Budget Highlights - Direct taxes

Tax Rates

Income Tax rates remain the same for individuals and corporates for the FY 2015-

16. Corporate taxes are proposed to be

reduced from the existing rate of 30% to

25% over the next 4 years

Non Corporate Assesses

Assesses less than 60 years

FY 2015-16 Tax rate

0-250,000 Nil

250,001-500,000* 10%

500,001-1,000,000 20%

1,000,000+ 30%

For senior citizen assesses 60 years or more but less than 80 years

FY 2015-16 Tax rate

0-300,000 Nil

300,001-500,000* 10%

500,001-1,000,000 20%

1,000,000+ 30%

Senior citizen assesses > 80 years

FY 2015-16 Tax rate

0-500,000 Nil

500,001-1,000,000 20%

1,000,000+ 30%

Surcharge

Txbl Income FY

2014-15

FY

2015-16

10,000,000 10% 12%

Corporate Assesses

Domestic Companies

Taxable Income FY

2014-15

FY

2015-16

Tax Rate 30% 30%

Surcharge :

10,000,000 and

100,000,000 10% 12%

Foreign Companies

Taxable Income FY

2014-15

FY

2015-16

Tax Rate 40% 40%

Surcharge :

10,000,000 and

100,000,000 5% 5%

Wealth tax

Abolish the levy of Wealth-tax with effect from 2016-17 (Assessment Year)

The revenue loss on account of such abolition is proposed to be compensated by

increase in the existing surcharge by 2% in

case of domestic companies and all non

corporate taxpayers.

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Key Changes in Income Tax

Individuals

Section Applicability FY 2014-15 FY 2015-16

Transport Allowance Rs 800 per month Rs 1600 per month

80C Sukanya Samriddhi Scheme Investments made by parent or

guardian

Nil New

80D Non senior citizen 15000 Premium 25000

Senior Citizen 20000 Premium 30000

Very Senior Citizen not eligible

for insurance

Nil 30000 ( Expenditure )

80DDB Very Senior Citizens Specified diseases * ( in the speech )

60000 80000

80DD Maintenance, including medical

treatment of a dependant who is a

person with disability

50000 75000

Severe disability 100000 125000

80U Person with disability 50000 75000

Severe disability 100000 125000

80CCC Contribution to a pension fund of

LIC or IRDA approved insurer

100000 150000

80CCD Contribution by the employee to

National Pension Scheme (NPS)

Deduction of upto Rs 50,000 over

and above the limit of Rs 1.50

lakh in respect of contributions

made to NPS

100000 150000

80G Swachh Bharat Kosh

Clean Ganga Fund

National Fund for Control of

Drug Abuse

Nil 100%

Tax deductions referred to in Budget

Deduction u/s 80C 1,50,000

Deduction u/s 80CCD 50,000

Interest onSelf Occupied property 2,00,000

80D Insurance premium 25,000

Transport allowance 19,200

Total 4,44,200

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Other Key Changes

Residential Status

Sec 6 A Company is considered as resident in

India if its place of effective management

(POEM), at any time in that year, is in India

The term PoEM has been explained to mean 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.

Value substantially from the assets in India

Section 9 (1)(i)(A) the term substantially from

the assets located in India would mean the

following:

1. Excess of Rs. 1 Crore and 2. Represents at least 50% of the value of

all the assets owned by the entity

Domestic Transfer Pricing

Section 92BA -increase the threshold limit for

applicability of transfer pricing regulations to

specified domestic transactions from Rs 5 crore

to Rs 20 crore

GAAR

Defer applicability of General Anti Avoidance

Rule (GAAR) by 2 years

2(15) of Income tax act

Yoga included as a specific category of activity in the definition of charitable purpose and also to provide relief for activities in the

nature of business undertaken by genuine

charitable organizations subject to the condition

that aggregate receipts from such activity is less

than 20% of the total receipts

Additional depreciation on P & M

Additional depreciation @ 20% is allowed on

new plant and machinery installed by a

manufacturing unit or a unit engaged in

generation and distribution of power.

If the asset is installed after 30th September of

the previous year only 10% of the additional

depreciation was allowed. Now the remaining

10% of the additional depreciation will be

allowed in the subsequent previous year.

Tax Deduction at Source

Sec 194 C : Transport operators exemption

from TDS is only where the operator has 10 or

less than 10 goods carriages ( Pan to be

provided )

Sec 192 A : EPF Trustees while paying the

accumulated PF balance should deduct 10%

TDS ( for payments of Rs 30000 or more )

Sec 192 : The person responsible for making the

payment of salary has to obtain from the assesse

the evidence or proof or particulars of

prescribed claims (including claim for set-off of

loss).

Sec 194I : Payment of Rent to Real Estate

Investment Trust (REIT) is exempt from TDS

194LBA and LBB : TDS to be deducted at 10%

by the business trust/Investment Fund on

payments to its unit holders

Sec 195 : Details of international payments (

whether tax is applicable or not ) to be disclosed

in the return filed

Restrictions on Cash Transactions

Section 269SS and 269T of the Income-tax Act

- prohibit acceptance or re-payment of advance

in cash of Rs 20,000 or more for any transaction

in immovable property

Tax on Royalty and Technical Services

Sec 115A :Income of the non-resident by way

of Royalty or Fees for technical services - the

tax rate is reduced from 25% to 10%.

State of AP

Additional investment allowance (@15%) and

additional depreciation (@15%) to new

manufacturing units set-up during the period

01.04.2015 to 31.03.2020 in notified areas of

Andhra Pradesh and Telangana

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80JJAA deduction

All manufacturing units are covered , shall be

available to a person deriving profits from manufacture of goods in a factory and paying

wages to new regular workmen. The eligibility

threshold of minimum 100 workmen is reduced

to fifty

Minimum Alternate Tax

Income from AOP and its corresponding

Expense is outside the ambit of MAT.

Also the amount of income and its

corresponding cost from transactions in

securities accruing or arising to an FII who has

invested in such securities in accordance with

the regulations made by SEBI

Administration

Section 255 of the Income-tax Act - increase

the monetary limit from Rs 5 lakh to Rs 15 lakh,

for a case to be heard by a Single Member

Bench of the ITAT.

Requirement for TAN

An individual buying an immovable property

from a resident is required to deduct tax but is

not required to obtain TAN for depositing the

tax so deducted. The Same benefit of not

requiring TAN has been extended to an

individual or HUF purchasing an immovable

property from a non-resident

Trusts

Any trust or institution registered under sec 12 AA cannot claim exemption under

section 10 except under Sec 10 (23C).

Registration under sec 12AA is permissible for claiming tax exemption for earlier years

also

Sec 12AA widened to give more power to commissioner to cancel approval.

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Budget Highlights - Indirect taxes

Customs and Excise

Reduction in number of levies:

Education Cess and Secondary & Higher

Education Cess leviable on excisable goods are

being subsumed in Basic Excise duty

Consequently, Education Cess and Secondary

& Higher Education Cess leviable on excisable

goods are being fully exempted.

The standard ad valorem rate of Basic

Excise Duty is being increased from 12% to

12.5%

Customs Education Cesses will continue to be

levied on imported goods.

Compliance Facilitation:

Online Central Excise/Service Tax Registration within two working days.

Time limit for taking CENVAT Credit on inputs and input services is being increased

from six months to one year.

Central Excise/Service Tax assessees are being allowed to issue digitally signed

invoices and maintain other records

electronically.

Waiver of penalty if duty and interest is paid within 30 days of the receipt of notice

and 15% penalty if paid after 30 days.

Section 11AC penalty without Mens Rea shall be maximum 10% only

Clean Energy Cess

The Scheduled rate of Clean Energy Cess levied on coal, lignite and peat is being

increased from Rs 100 per tonne to Rs 300

per tonne. The effective rate of Clean

Energy Cess is being increased from `100

per tonne to Rs 200 per tonne.

Service Tax

Rate increased from 12.36% to 14% with the

cess subsumed in the rate.

An enabling provision to empower the Central

Government to impose a Swachh Bharat Cess

on all or certain taxable services at a rate of 2%

on the value of such taxable services. This Cess

will be effective from a date to be notified.

Graded increase in interest rates for delay

beyond 6 months from 24% & 30%. 18% upto

6 months

Registration to be done in 2 days

Withdrawals from negative list:

Support Services provided by Government

or a Local Authority to a business entity

Access to Amusement Facilities.

Admission to Entertainment Events if fee

exceeds Rs. 500

Contract manufacturing /job work for

production of potable liquor for a

consideration

Betting, Gambling and Lottery

Exemptions withdrawn/restricted to

Exemption presently available on specified

services to the Government are restricted

further

Exemption to construction, erection,

commissioning or installation of original

works pertaining to an airport or port is

withdrawn

Exemption to services provided by a

performing artist in folk or classical art

form of music, or dance, or theatre is

limited only to such cases where amount

charged is up to Rs 1,00,000 for a

performance

Exemption to transportation of food stuff

by rail, or vessels or road is limited to food

grains including rice and pulses, flour, milk

and salt

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Transportation of agricultural produce is

separately exempt, and this exemption

would continue

Sec 65B (23A) Chit Foreman commission

is to get covered by the definition for

Service[hereafter this cannot be

Transaction in Money /Actionable Claim]

Reimbursements are taxable

Lottery dealer/agents commission is

taxable

New Exemptions:

Service provided by way of exhibition of movie by the exhibitor (theatre owner) to

the distributor or association of persons

consisting of such exhibitor as one of its

members

Services by way of pre-conditioning, pre-cooling, ripening, waxing, retail packing,

labelling of fruits and vegetables

Service provided by a Common Effluent Treatment Plant operator for treatment of

effluent

Admission to a museum, zoo, national park, wild life sanctuary, tiger reserve

Life insurance service provided by way of Varishtha Pension Bima Yojna

Ambulance services

Goods Transport Agency concept is now extended to Land Customs Station

Other Amendments

Differential amounts of Penalty for normal and Fraud or collusion cases introduced

Manpower supply and security services when provided by an individual, HUF or

partnership firm to a body corporate are to

be considered under full reverse charge

Reverse charge basis to be adopted by AMC for services mutual fund agents,

mutual fund distributors and agents of

lottery distributor

Abatements

Uniform rate of 30% on services by Rail, GTA Road and Vessel

60% on services by way of Air transport of passengers by Business Class

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Documents

Abhirami Andhadhi