Taxpert budget 2015 update

DIRECT TAX There is no change in the rate of income-tax for

partnership firms, domestic company and

foreign company for the F.Y 2015-16 (A.Y 2016-

17).

Increased in rate of additional depreciation from 20% to 35% for manufacturing undertaking or enterprise which is set up in the notified backward area of the State of Andhra Pradesh or the State of Telangana on or after the 1st day of April, 2015. Donation made to National Fund for Control of

Drug Abuse (NFCDA) shall be eligible for 100%

deduction under section 80G

Rigorous money laundering provisions

Budget Highlights with Taxpert Professionals

DIRECT TAX

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Surcharge in the case of domestic companies having income

exceeding “1” crore and upto “10” crore is proposed to be levied @

7% and surcharge @ 12% is proposed to be levied on domestic

companies having income exceeding “10” crore

Carried forward of Additional depreciation u/s 32(ii)(a) of

remaining 10% for the assets acquired and installed after 30th

September of the previous year to subsequent previous year.

Donations (other than the CSR contributions u/s 135 of the

Companies Act, 2013) made to Swachch Bharat Kosh (by both

resident and non-resident) and Clean Ganga Fund (by resident)

shall be eligible for 100% deduction under section 80G.

The eligibility threshold of minimum 100 workmen is proposed is to

reduced to fifty u/s 80JJAA.

SALARIED There is no change in the rate of income-tax for Individual, HUF,

AOPs, BOIs, artificial juridical persons in respect of income earned

in the F.Y 2015-16 (A.Y 2016-17).

(NPS) from Rs. 1,00,000/- to Rs. 1,50,000/- under Section 80CCD

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A surcharge @12% is levied on individuals, HUFs, AOPs, BOIs,

having income exceeding Rs. 1 crore and Education Cess and

Secondary and Higher Education Cess shall continue to be

levied at the rate of two per cent and one per cent

respectively.

Transport Allowance limit increased from Rs. 800 pm to Rs.

1,600 pm

Investment in Sukanya Samriddhi Scheme will be eligible for

deduction u/s 80C and interest accruing on such deposits will

be exempt from income tax under section 10(11)

Increase in limit of contribution to Pension funds from Rs.

1,00,000/- to Rs. 1,50,000/- under Section 80CCC

Increase in limit of contribution by the employee to National

Pension Scheme from INR 100,000 to 150000/-

Increase in limit of contribution in Medical Insurance premium

u/s 80D.Deduction for Maintenance including Medical

treatment of a dependent disabled u/s 80DD in respect of

person with severe disability and others has increased from

Rs. 1,00,000 to Rs. 1,25,000 and Rs. 50,000 to 75,000

respectively.

Deduction for Medical treatment of specified diseases or

aliments u/s 80DDB in respect of very Senior Citizen person

has increased from Rs. 60,000 to Rs. 80,000

Deduction under Section 80U in respect of Person with

severe disability and others has ncreased from Rs. 1,00,000 to

Rs. 1,25,000 and Rs. 50,000 to Rs. 75,000 respectively.

Budget Highlights with Taxpert Professionals

INDIRECT TAX




EXCISE: Standard ad-valorem rate of excise duty proposed to be increased

from the existing 12% to 12.50 %. Education Cess and Secondary &

Higher Education Cess are proposed to be exempted on all goods

falling within the First Schedule to the Central Excise Tariff Act, 1985

Direct dispatch of goods to premises of customers of a registered

dealer/registered importer without bringing the goods to the

registered premises subject to certain conditions

Time-limit for availing CENVAT credit on inputs and input services is

being extended from six months to one year, from the date of invoice

Time-limit for return of capital goods from job worker’s premises

extended from six months to two years.

Online Central Excise Registration can be completed within two

working days. Central excise assesses are being allowed to issue

digitally signed invoices and maintain other records electronically.

Excise duty has been decreased on inputs for use in the manufacture

of LED Drivers and MCPCB for LED Lights, Fixtures and LED lamps from

12% to 6%.



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SERVICE TAX Effective rate of Service Tax to be increased from the

existing rate of 12.36% to 14%. Education cess and

Secondary & Higher Education cess is proposed to be

subsumed in the said rate from a date to be notified.

Swachh Bharat cess (SB cess) @ 2% on value of all or any

of the taxable services to be levied from a notified date.

Manpower supply services and security services

provided by an individual, HUF, or partnership firm to a

body corporate are being brought under ambit of full

reverse charge against previous partial reverse charge.

CENVAT credit can be taken till one year from the date

of invoice.

Abatement rate for transport of goods by road, rail and

vessel rationalized at 30% on value of services, with

effect from 1 April 2015.

CUSTOMS Reduction in Basic Customs Duty to

reduce the cost of imported raw

materials

Increase in BCD on few raw-materials

and few products to demotivate their

imports

Reduction in SAD to address the

problem of CENVAT credit

Accumulation on import of certain

raw material.

High Speed Diesel & Motor Spirit

(Petrol) covered under chapter

heading 2710 shall be exempt from

CVD as in excess of the amount

calculated at the rate of Rs. 6/liter.

International recognised concept for determination of residence of a company incorporated in a foreign jurisdiction introduced: Presently a company is resident if it is an Indian company or the control or management of its affairs situated wholly in India. The condition of control or management changed with Place of Effective Management (‘POEM’).

POEM 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.

Budget Highlights with Taxpert Professionals INTERNATIONAL TAX

Tax rate on royalty and FTS in case of non-residents to be reduced from 25 per cent to 10 per cent.

No change in Corporate tax rate for FY 2015-16. Wealth Tax abolished.

Threshold limit for Specified Domestic Transactions subject to transfer pricing increased to INR 20Cr from 5Cr.

Section 295 amended to enable CBDT to notify rules for giving foreign tax credit.

Provisions relating to indirect transfer of shares or interest clarified:

Taxability in India to trigger when value of Indian assets exceeds INR 10cr. and represent atleast 50 % of value of all the assets owned by foreign company/ entity.

Gains to be taxable on proportionate basis

Provisions of indirect transfer shall not apply in case of minority shareholding (5 % or less) provided no management or control exists at any time during last 12 months

Reporting obligation of the offshore transfer cast on the Indian concern

Relaxation of indirect transfer provisions in case of overseas merger/demerger



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GAAR provisions have been deferred by two years and shall apply from FY 2017-18. Grandfathering of investments made upto 31 March 2017.

The limitation date of the benefit of reduced rate of tax available under section 194LC in respect of external commercial borrowings extended to 30th June, 2017

No MAT on FIIs on long term capital gains & short term capital gains (subjected to STT)

Submission of details of remittance to non resident required in all cases irrespective of chargeability to tax.

Pass through status for Category II Alternative Investment Funds

Fund manager of an off shore fund in India not to constitute permanent establishment in India – Subject to fulfilment of conditions

WEB SOLUTIONS

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Taxpert budget 2015 update