10/03/2016
Budget Highlights 2016
Ø No change in taxation rate for individuals, co-operative societies, firms, local authorities and companies.
Ø Deduction of rent paid under section 80GG increased from 24,000 per annum to 60,000, to provide relief to those who live in rented houses.
Ø Raise the ceiling of tax rebate under section 87A from 2000 to 5000 to lessen tax burden on individuals with income up to 5 lakh.
Ø Deduction for additional interest of 50,000 per annum for loans up to 35 lakh sanctioned in 2016-17 for first time home buyers, where house cost does not exceed 50 lakh.
Ø Surcharge to be raise from 12% to 15% on persons, other than companies, firms and cooperative societies having income above 1 crore.
Ø Additional tax at the rate of 10% of gross amount of dividend will be payable by the recipients receiving dividend in excess of 10 lakh per annum.
Ø Increase in time period for acquisition or construction of self-occupied house property for claiming deduction of interest.
Ø Enabling of filing of Form 15G/15H for rental payments under section 194-I.
Ø Exemption of interest on deposit certificate issued under Gold Monetisation Scheme, 2015.
Ø Krishi Kalyan Cess, @ 0.5% on all taxable services, w.e.f. 1 June 2016.
Ø 100% deduction of profits for 3 out of 5 years for start-ups setup during April, 2016 to March, 2019.MAT will apply in such cases.
Ø Lower the corporate tax rate for the next financial year for relatively small enterprises i.e. companies with turnover not exceeding 5 crore (in the financial year ending March 2015), to 29% plus surcharge and cess.
Ø New manufacturing companies incorporated on or after 1.3.2016 to be given an option to be taxed at 25% + surcharge and cess provided they do not claim profit linked or investment linked deductions and do not avail of investment allowance and accelerated depreciation.
Ø 100% deduction for profits to an undertaking in housing project for flats up to 30 sq. Metres in four metro cities and 60 sq. Metres in other cities, approved during June 2016 to March 2019 and completed in three years. MAT to apply.
Ø Tax incentive for employment generation under section 80JJAA.
Ø Tax to be deducted at source at the rate of 1% on purchase of luxury cars exceeding value of ten lakh and purchase of goods and services in cash exceeding two lakh.
Ø 10% rate of tax on income from worldwide exploitation of patents developed and registered in India by a resident.
Ø Levy of tax where the charitable institution ceases to exist or converts into a non-charitable organization.
Ø Extend the presumptive taxation scheme with profit deemed to be 50%, to professionals with gross receipts up to 50 lakh.
Ø Increase in threshold limit for audit of persons having income from profession.
Ø Increase the turnover limit under Presumptive taxation scheme under section 44AD of the Income Tax Act to 2 crores to bring big relief to a large number of assesses in the MSME category.
Ø Period for getting benefit of long term capital gain regime in case of unlisted companies is proposed to be reduced from three to two years.
Ø Increase in threshold limit of TDS under sections 192A, 192BB, 194C, 194D, 194G, 194H & 194LA
Ø Revision in rates of TDS under sections 194DA, 194EE, 194D, 194G, and 194H.
Ø Introduction of Income Declaration Scheme, 2016: Domestic taxpayers can declare undisclosed income or such income represented in the form of any asset by paying tax at 30%, and surcharge at 7.5% and penalty at 7.5%, which is a total of 45% of the undisclosed income. Declarants will have immunity from prosecution.
Ø Introduction of Direct Tax Dispute Resolution Scheme, 2016: No penalty in respect of cases with disputed tax up to 10 lakh. Cases with disputed tax exceeding 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.
Ø Rationalization of conversion of a company into Limited Liability Partnership (LLP) .
Ø Commitment to implement General Anti Avoidance Rules (GAAR) from 1.4.2017.
Ø Rationalisation of time limit for assessment, reassessment and recomputation.
Ø Rationalisation of advance tax payment schedule under section 211 and charging of interest under section 234C.
Ø Rationalization of section 50C in case sale consideration is fixed under agreement executed prior to the date of registration of immovable property.
For further clarification or doubt send us a Email
Thanks,
CA Prateek Kapoor
Senior Advisor-Legal Fin India Consulting LLP
Legal Fin India Consulting LLP
Add: 301,rd Floor,A-19,Gurunank Pura,Opp V3S Mall,
Near Nirman Vihar Metro Station,Delhi-110092.
Email:[email protected]
Ph No.:91+8394998866
