KEY HIGHLIGHTS OF UNION BUDGET 2016-16 ANNOUNCED BY HON’BLE FINANCE MINISTER MR. ARUN JAITLEY ON 29/02/2016
Foreign exchange reserves touched highest ever level of about 350 billion US dollars.
Govt. to pay contribution @ 8.33% to all employees enrolled with EPFO for the first 3 years of employment.
Model Shop and Establishment Act to be circulated to all States and States would have option to adopt it.
Amendment to Motor Vehicle Act, to give ways to ply private vehicles on road for passengers subject to some safety compliance.
Action plan to revive airports
Incentives to promote incentivize Gas production from Deep Water, Ultra deep-water and high pressure – high temperature areas.
100% FDI through FIPB route in marketing in Food and products manufacturing in India
DBT (direct benefit Transfer) to the beneficiary based on AADHAR card.
Single Window Custom port to be started on certain custom ports
- Direct Taxation
No change in Income tax Slabs
The rebate u/s 87A has been increased from Rs. 2,000/- to Rs. 5,000/- to those individuals whose total income does not exceed Rs. 5 Lacs
House Rent Allowance u/s 80GG has been increased from Rs. 24,000/- to Rs. 60,000/- p.a.
Surcharge has been increased from 12% to 15% to domestic companies whose total income exceed Rs. 1 Crore
Scope of presumptive taxation u/s 44AD has been extended to cover all kind of professional and turnover limit has been increased from Rs. 25 Lacs to 50 Lacs
The presumptive tax rate on professionals increased to 50%
The turnover limit u/s 44AD has been increased from Rs. 1 Crore to Rs. 2 Crore
Additional tax at the rate of 10% of gross amount of dividend will be payable by the recipients receiving dividend in excess of Rs. 10 lakh per annul.
Accelerated depreciation to be limited to 40% from 01/04/2017
Deduction for research would be limited to 150% from 01/04/2017 and 100% from 01/04/2020
The weighted deduction u/s 35CCD for skill development would continue up-to 01/04/2020
Lower Corporate tax @ 25% + surcharge and cess to manufacturing companies
Lower corporate tax @ 29% to corporate whose turnover does not exceed Rs. 5 Crores
100% deduction of profits for 3 out of 5 years for startups setup during April, 2016 to March, 2019. MAT will apply in such cases.
10% rate of tax on income from worldwide exploitation of patents developed and registered in India by a resident.
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.
Non-banking financial companies shall be eligible for deduction to the extent of 5% of its income in respect of provision for bad and doubtful debts.
Commitment to implement General Anti Avoidance Rules (GAAR) from 01.4.2017.
Limit for contribution of employer in recognized Provident and Superannuation Fund of Rs. 1.5 lakh per annul for taking tax benefit.
100% deduction for profits to an undertaking in housing project for flats upto 30 sq. meters in four metro cities and 60 sq. meters in other cities, approved during June 2016 to March 2019 and completed in three years. MAT to apply.
Deduction for additional interest of Rs. 50,000 per annul for loans up to Rs. 35 lakh sanctioned in 2016-17 for first time home buyers, where house cost does not exceed Rs. 50 lakh.
Tax to be deducted at source at the rate of 1 % on purchase of luxury cars exceeding value of Rs. 10 Lakh and purchase of goods and services in cash exceeding Rs. 2 Lakh.
Securities Transaction tax in case of ‘Options’ is proposed to be increased from .017% to .05%.
New Income Declaration Scheme, 2016 to pay 45% of undisclosed income and get relaxation from penalty and prosecution.
New Dispute Resolution Scheme to be introduced. No penalty in respect of cases with disputed tax up to Rs. 10 lakh. Cases with disputed tax exceeding Rs. 10 lakh to be subjected to 25% of the minimum of the impossible 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.
Time limit of one year for disposing petitions of the tax payers seeking waiver of interest and penalty.
Mandatory for the assessing officer to grant stay of demand once the assesse pays 15% of the disputed demand, while the appeal is pending before Commissioner of Income-tax (Appeals).
Monetary limit for deciding an appeal by a single member Bench of ITAT enhanced from Rs. 15 lakhs to Rs. 50 lakhs.
For non-residents providing alternative documents to PAN card, higher TDS not to apply
Interest at the rate of 9% p.a against normal rate of 6% p.a for delay in giving effect to Appellate order beyond ninety days
- Indirect Taxation
Krishi Kalyan Cess, @ 0.5% on all taxable services, w.e.f. 1 June 2016
Infrastructure cess, of 1% on small petrol, LPG, CNG cars, 2.5% on diesel cars of certain capacity and 4% on other higher engine capacity vehicles and SUVs. No credit of this cess will be available nor credit of any other tax or duty be utilized for paying this cess.
Exemption from service tax to
General Insurance under Niramaya Health Insurance Scheme
Annuity services provided by NPS
Services provided by EPFO to employees
construction of affordable houses up to 60 square meters under any scheme of the Central or State Government including PPP Schemes
Reduce service tax on Single premium Annuity (Insurance) Policies from 3.5% to 1.4% of the premium paid in certain cases
Basic custom and excise duty on refrigerated containers reduced to 5% and 6%.
Extend excise duty exemption, presently available to Concrete Mix manufactured at site for use in construction work to Ready Mix Concrete.
Excise duty of ‘1% without input tax credit or 12.5% with input tax credit’ on articles of jewellery [excluding silver jewellery, other than studded with diamonds and some other precious stones], with a higher exemption and eligibility limits of Rs. 6 crores and Rs. 12 crores respectively.
Excise on ready made garments with retail price of Rs. 1000 or more raised to 2% without input tax credit or 12.5% with input tax credit.
‘Clean Energy Cess’ levied on coal, lignite and peat renamed to ‘Clean Environment Cess’ and rate increased from Rs. 200 per tonne to Rs. 400 per tonne.
Excise duties on various tobacco products other than beedi raised by about 10 to 15%.
Assignment of right to use the spectrum and its transfers has been deducted as a service leviable to service tax and not sale of intangible goods.
Customs Act to provide for deferred payment of customs duties for importers and exporters with proven track record