A.
DIRECT TAXES
INDIVIDUALS
/ HUF / AOP / BOI
Ø No change in income tax rates.
Ø Income Tax Exemption limit increased to Rs. 2.5 Lakh from Rs. 2
lakh. For Senior citizens exemption limit increased to Rs. 3 lakh.
Ø Deduction u/s 80C increased to Rs. 1.5 lakh from Rs. 1 lakh
Ø Deduction for Interest on housing loan for Self Occupied
property increased to Rs. 2 Lakh from 1.5 lakh.
CORPORATES:
Ø No change in Corporate Tax rate.
Ø Investment allowance at 15% for 3 years to manufacturing
company which invest more than Rs. 25 crore in plant and machinery.
Ø 10 Years Tax Holiday for Power Sector if begins generation,
distribution & transmission of Power by 31.03.2017.
Ø Investment Linked deduction extended to two new ventures ;
Slurry Pipeline for transportation of Iron Ore & Semi Conductor wafer
fabrication manufacturing units.
Ø Expenditure on Corporate Social Responsibility [CSR] shall not
be allowed as deduction while calculating business income.
Ø For Non-deduction of TDS, only 30% of the expenditure will be
disallowed instead of earlier disallowance of 100% of the expenditure, if TDS
rate is between 1% - 10%.
Ø For business of plying, hiring or leasing goods carriage [up-to
10 vehicle], the presumptive income shall be Rs. 7500/- per month.
Ø Credit of Alternative Minimum Tax will now be available to
taxpayers and allowed to carry forward to adjust normal tax liability of succeeding
years.
INTERNATIONAL
TRANSACTIONS / NRI / FOREIGN TAXATION:
Ø Roll Back Provisions for Advance Pricing Agreement Scheme, as
per which APA taken for future transactions will also applicable for
transactions of preceding four years [subject to conditions].
Ø “Range Concept” introduced in Transfer Pricing provisions as
per which Arm’s Length Price shall be calculated based on Multi-year data
instead of single year data.
Ø Transfer Pricing Officer [TPO] can levy penalty u/s 271G.
Ø Dividend received from Foreign Company shall be taxed at Concessional
rate of 15%. No sunset clause.
Ø Income Arising to Foreign Portfolio Investors from Transaction
in securities will be treated as capital gains and will tax accordingly.
Ø TDS on any Interest payment made for “any bonds” issued in
foreign currency shall be deducted @ 5% [earlier it was only on “Infrastructure
bonds”]. The eligible date extended to 31.03.2017.
OTHER
PROVISIONS:
Ø Long Term capital Gain of units of Mutual Funds [other than
Equity oriented funds] shall be taxed @20%. Further, units have to hold at
least 36 months for treating it as long term.
Ø To qualify as Long term capital assets, Unlisted securities is
required to be hold for at-least 36 months instead of earlier period of 12
months.
Ø Advance Ruling shall be extended to Resident Taxpayers and
existing number of benches of Advance Ruling shall be increased.
Ø More Stringent Provisions related to furnishing of Annual
Information Return.
Ø For resolving the disputes, Scope of Settlement Commission will
be expanded.
Ø Dividend distribution tax shall be paid on gross dividend paid
instead on dividend net of taxes.
Ø Tax Regime to Infrastructure Investment Trusts and Real Estate
Investment Trusts to set up in accordance with regulations of SEBI.
Ø Compulsory Imprisonment and fine, if the assesses willfully fails to produce books of
accounts and other details as required in section 142(1) or 142(2A)
OTHET
MAJOR ANNOUNECEMNTS:
Ø A high Level committee constituted by CBDT shall take care of
issue of indirect transfer on retrospective amendments on case to case basis.
Ø No more Retrospective Amendments in Tax Laws.
Ø 60 New Aaykar Seva Kendra to be opened in financial year
2014-15 to promote tax payer friendly services.
Ø Government will review the Direct Tax Code [DTC] in its present
shape and review it.
