Quick Glance over Budget 2014-15
Direct
Tax
§ No change in the surcharge or education cess either for the
corporates or the individuals, HUFs, firms etc.
§ Personal Income-tax Exemption
limit raised by ` 50,000/- that is, from ` 2 lakh to ` 2.5 lakh in the case of individual taxpayers, below the age of 60
years. Exemption limit raised from ` 2.5 lakh to ` 3 lakh in the case of senior citizens.
§ Investment limit under
section 80C of the Income-tax Act
raised from ` 1
lakh to ` 1.5 lakh.
§ Deduction limit on account of interest on loan in respect of self occupied house
property raised from `.1.5 lakh to `.2 lakh.
§ Investment allowance for Medium Size Company : at the rate of 15 percent to a manufacturing
company that invests more than ` 25 crore in any year in new plant and machinery. The benefit to be
available for three years i.e. for investments upto 31.03.2017.
§ In case of non deduction of tax on payments, 30% of such payments will be disallowed instead of 100 percent.
§ 10 year tax holiday extended to the undertakings which begin
generation, distribution and transmission of power by 31.03.2017.
§ Concessional rate of 15 percent on foreign dividends without any
sunset date to be continued.
§ The eligible date of borrowing in foreign currency extended from
30.06.2015 to 30.06.2017 for a concessional tax rate of 5 percent on interest
payments.
§ Tax incentive extended to all types of bonds instead of only
infrastructure bonds.
§ Introduction of a “Roll Back” provision in the Advanced Pricing
Agreement (APA) scheme so that an APA entered into for future transactions is
also applicable to international transactions undertaken in previous four years
in specified circumstances.
§ Introduction of range concept for determination of arm’s length
price in transfer pricing regulations.To allow use of multiple year data for comparability analysis
under transfer pricing regulations.
Higher Tax Payment or Reduction in Benefits
·
To remove tax arbitrage,
rate of tax on long term capital gains increased from 10 percent to 20 percent
on transfer of units of Mutual Funds, other than equity oriented funds.
·
Income and dividend
distribution tax to be levied on gross amount instead of amount paid net of
taxes.
Service
Tax
Increase in Coverage
§ Sale of space or time for advertisements in broadcast media,
extended to cover such sales on other segments like online and mobile
advertising. Sale of space for advertisements in print media however would remain
excluded from service tax.
§ Service provided by radio-taxis brought under service tax.
§ Services by air-conditioned contract carriages and technical
testing of newly developed drugs on human participants brought under service
tax.
Exemption or Relaxation
§ Provision of services rules to be amended and tax incidence to be
reduced on transport of goods through coastal vessels to promote Indian
Shipping industry.
§ Services provided by Indian tour operators to foreign tourists in
relation to a tour wholly conducted outside India to be taken out of the tax
net and
§ Cenvat credit for services of rent-a-cab and tour operators to be
allowed to promote tourism.
§ Service tax exempted on loading, unloading, storage, warehousing
and transportation of cotton, whether ginned or baled.
§ Services provided by the Employees’ State Insurance Corporation
for the period prior to 1st July 2012 exempted, from service tax.
Others
§ Sovereign right of the Government to undertake retrospective
legislation to be exercised with extreme caution and judiciousness keeping in
mind the impact of each such measure on the economy and the overall investment
climate.
§ Resident tax payers enabled to obtain on advance ruling in
respect of their income-tax liability above a defined threshold.
§ Convergance with International Financial Reporting Standard (IFRS)
by Adoption of the new Indian Accounting Standards (2nd AS) by Indian
Companies.
§ Income-tax Settlement Commission scope to be enlarged.
§ Introduction of GST to be given thrust.
§ Committee
to examine the financial architecture for MSME Sector, remove bottlenecks and
create new rules and structures to be set up and give concrete suggestions in
three months.
§ Definition
of MSME to be reviewed to provide for a higher capital ceiling
§ In
the PPF Scheme, annual ceiling will be enhanced to `.1.5
lakh p.a. from `.1 lakh at present.
§ A
National Savings Certificate with insurance cover to provide additional
benefits for the small saver.
§ Kissan
Vikas Patra (KVP) to be reintroduced
§
A special small savings instrument to
cater to the requirements of educating and marriage of the Girl Child to be
introduced.
Regards
CA Brindesh Sarda
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