Some highlight's budget speech 2015 16

1. Presented by Honble Finance Minister Arun jaitley at Parliament on 28.2.2015 Article Assistant-Jugola Kishore Pradhan Highlights of Budget 2015- 16 Srikanth and Shanthi Associates

2. Non-Tax Revenue 10% Service Tax & Other Taxes 9% Borrowing & Other Liabilities 24% Union Excise Duties 10% Income Tax 14% Customs 9% Corporate Tax 20% Non-Debt Capital Receipts 4% Rupee comes From Budget At a Glance-Total Revenue Recipts-`23,39,086 Crore Note-Above given percentages are all subject to round off on approximate basis

3. States' Share of Taxes & Duties 23% Central Plan 11% Interest Payments 20% Plan Assistance to States & Uts 9% Non-Plan Assistance to State & UT Govts 5% Other Non- Plan Expenditure 11% Subsidies 10% Defence 11% Rupee Goes To Note-Above given percentages are all subject to rounded off on approximate ba

4. Content S Direct tax Amendments Indirect tax Amendments Basic Rate of Tax. Heads of Income. Deductions. International Taxation. Transfer Pricing. Custom duty Excise duty Service tax Srikanth and Shanthi Associates

5. Income Tax Basic exemption limit for Individual and HUF unchanged i.e Income Range Rate % Up to 250000 * Nil 250001 to 500000 10 5000001 to 1000000 20 1000001 to above 30 * Exemption for senior and super senior citizen remains unchanged the at ` 3,00,000 and ` 5,00,000 respectively. Surcharge limit enhanced from limit 10 % to 12% on Individual, HUF, AOPs, BOIs, artificial juridical persons, firms, cooperative societies and local authorities having income exceeding 1 crore Income From partnership firm and co-operative societies remain unchanged. surcharge enhanced from 10 to 12 per cent for incomes exceeding 1 crore in FY 2015-16.

6. Cause of proposal for increment made in surcharge from 10% to 12% has mentioned by the FM jaitely. To abolish wealth tax with low yield which is Rs.1008 CRORE in the FY 2013-14 . As against a tax sacrifice Department would be collecting about Rs.9,000 CRORE from the 2% additional surcharge.

7. Company Old Rate New Rate Old Surcharge New surcharge Domestic company 30 % 25 % 5% of income >1 crore < 10 crore 10 % of Income> 10 crore 7% of Income > 1 crore < 10 crore & 12 % of income > 10 crore Foreign company 40 % 40 % 2 % of Income > 1 crore < 10 crore & 5% of Income > 10 crore 2 % of Income > 1 crore < 10 crore & 5% of Income > 10 crore Corporate tax changes detailed in Table given below Distribution tax rates Remain unchanged . Surcharge enhanced from 10 to Education cess at 2 per cent(2%) and secondary and higher education cess remain unchanged.

8. Amendment to Salary income No significant amendment to salary income but one noted below Transport allowance amended by increasing from Rs.800 to Rs.1600 per month. Income from business and profession Benefit of additional depreciation enhanced to 35 % on cost of new plant and machinery acquired and installed by a manufacturing undertaking set-up during april 1 2015 to march 31 2020 in notified backward areas of Andhra pradesh and Telengana. In respect of claim of additional depreciation in manufacturing and power sector, where new plant and machinery is put to use for 180 days or less in the year of acquisition ,unutilized additional depreciation is carried forward to succeeding year.

9. Benefit of additional investment allowance under section 32AD at 15% now available to new manufacturing undertaking set-up during April 1 2015 to march 31 2020 in notified backward areas of Andhra Pradesh and Telengana. Book profit under MAT to exclude net income from securities arising to foreign institutional investors(FII) and members of Association of person. CAPITAL GAINS No significant changes proposed. INCOME FROM HOUSE PROPERTY No significant changes proposed

10. Sectio n No. Nature of Expense/ Investment Eligible for Deduction Old ceiling limit(Rs.) New ceiling limit(Rs.) 80C Contn. To sukanya samridhi 1,00,000 1,50,000 80CC C Contribution to a pension fund of LIC or IRDA approved insurer 1,00,000 1,50,000 80CC D Contn. To National Pension Scheme(NPS) by Employee 1,00,000 1,50,000 80DD Treatment of disability 50,000 75,000 80U Treatment of severe disability 1,00,000 1,25,000 80D Mediclaim Insurance premium citizen(age60) -20,000. citizen(age60)- 30,000. 80G Eligibility of Donation made to National Fund for Control of Drug Abuse(NFCDA) NIL 100% of the donation eligible 80G Contn. To Swach Bharat Kosh & Clean Ganga Fund NIL 100% of the donation eligible 80JJA A Employement of new regular workmen extended to manufacturing entities Threshold limit 100 new Regular Threshold limit 50 new Regular workers

11. Any advances in relation to immovable property( effective transfer is not required) must be given or accepted in the following modes 1.Account payee cheque or 2.Account payee draft or 3. Electronic clearing system If the aggregate amount during the year exceeds Rs.20,000 failing which will violate S- 269 SS & S-269 T. In nutshell even rental advance accepted or given for letting the property or advances for purchase of a rural/urban agricultural land will come in the ambit of the above mentioned transaction and the amount needs to be paid by any of the above mentioned modes.

12. Amendment to the provisions of section 2(15) of the Income-tax Act so as to include yoga as a specific category of activity in the definition of charitable purpose and also to provide relief for activities in the nature of business undertaken by genuine charitable organizations subject to the condition that aggregate receipts from such activity is less than 20% of the total receipts. Penalty and Prosecution Incorrect/Non-furnishing of information in respect of foreign remittance to attract of Rs.1,00,000.

13. Tax withholding Non-resident payments not subject to tax withholding to be reported. Pre-mature withdrawal of Rs.30,000 or more from Employee provident fund to attract tax withholding at 10 per cent. Benefit of lower tax withholding of 5 per cent on interest on bonds and securities payable to FIIs and qualified Foreign Investor extended up to june 30,2017. Tax on royalties and fee for technical services (FTS) arising to non-resident reinstated to 10 per cent. International Taxation 1. Detailed clarification as to the scope of capital gains taxation arising on indirect transfer of substantial interest in an indian company Taxable when underlying fair market value of indian investment exceeds Rs.1o crore and also represents 50 per cent or more of assets held by the investor company . Capital gain arising on transfer of substantial interest in in indian company to be computed proportionaly,based on rules to be proposed by central board of direct taxes (CBDT).

14. No capital gains tax on indirect transfer by minority shareholders(i.e effective shareholding 5 per cent or lower)who neither hold a right to control nor manage the investor company holding assets in Indian company . Onus on Indian company to furnish information in respect of off-shore transactions resulting into modification of its control or ownership structure .Non-compliance to attract penalty of Rs.5,00,000 or 2 per cent of transaction value. 2. CBDT to notify rules for availing credit in respect of taxes paid outside India on incomes taxed in both jurisdictions. 3. Payment of interest by an indian permanent Establishment of a foreign banking company to its head office or other overseas branches is taxable in India. 4. The activity of off-shore fund management ,when undertaken through advisors based in India, is not taxable .Amongst other conditions ,it is critical that the fund is located in a treaty country , not engaged in activities constituting business connection in India and the fund manager acts in independent capacity and remunerated at arms length. Continued

15. Transfer pricing Threshold for applicability of transfer pricing regulation on domestic transactions substantial enhanced from 50 lakh to 2 crore. OTHERS General Anti-Avoidance Rule(GAAR) provisions to apply prospectivily on transactions entered during financial year 2017-18 and thereafter. Acceptance or repayment in cash of Rs.20,000 or more in respect of buying and selling of real estate will attract penalty equivalent to cash accepted or repaid.

16. Indirect Tax Amendments Custom Duty-Highlights The Basic Customs Duty(BCD) and education cess maintained at 10 and 3 per cent respectibily. Reduction in SAD to address the problem of CENVAT credit accumulation: 1) All goods except populated PCBs, falling under any Chapter of the Customs Tariff, for use in manufacture of ITA bound goods from 4% to Nil. 2) Naphtha, ethylene dichloride (EDC), vinyl chloride monomer (VCM) and styrene monomer (SM) for manufacture of excisable goods from 4% to 2%. 3) Metal scrap of iron & steel, copper, brass and aluminium from 4% to 2%. 4) Inputs for use in the manufacture of LED drivers and MCPCB for LED lights, fixtures and LED lamps from 4% to Nil.

17. GOODS Old Rate(%) New Rate (%) Ulexite Ore 2.5 0 Isoprene and Liquefied butane 5 2.5 Ethylene dichloride, vinyl chloride monomer and styrene monomer 2.5 2 Butyl acrylate 7.5 5 Anthraquinone 7.5 2.5 Antimony metal and scrap 5 2.5 Sulphuric acid for manufacture of fertilizers 7.5 5 Changes in Basic Custom Duty rates of certain Industries Chemicals ,Petrochemicals and Fertilizers Changes in Basic Custom Duty rates of certain Industries Energy Sector GOODS Old Rate (%) New Rate(%) Bituminous Coal 55 10 Active Energy controller used in manufacture of renewable power system inverters subject to certification by MNRE 7.5 5

18. Changes in Basic Custom Duty rates of certain Industries Ores and Metals GOODS Old Rate(%) New rate (%) Iron and Steel and articles 10 15 Metallurgical coke 2.5 5 Metal parts for use in manufacture of electrical insulators 10 7.5 Ethylene-propylene-non-conjugated-diene rubber ,water bloking and mica glass tape used in the manufacture of insulated wire and cables 10 7.5 Compounds used in the manufacture of catalytic converters 7.5 5 Component for manufacture of specified CNC lathe machines 7.5 2.5 Specified inputs in the manufacture of flexible medical video endoscope 5 2.5 HDPE used in manufacture of telecommunication grade optical fibre cables 7.5 0 Black light unit module used in manufacture of LCD/LED TV panels 10 0

19. Excise duty ad valorem incrased from 12% to (12.36% including cess) to 12.50 per cent. Education cess and secondary higher education cess withdrawn. HIGHLIGHTS Amendments Online registration can be completed with in 2 working days. Time limit for availing credit on inputs increased from 6 to 12 months. Provisions of penalties rationalized to minimise litigation . The duty structure on petrol and diesel rationalised without any overall impact. Excise Duty

20. Duty on plastic bags for non-industrial use increased to 15 per cent. Duty on cement increased from Rs.900 to Rs.1000 per tone The period of furnishing bank guarantee to avail duty exemption on goods for Ultra Mega Power projects extended from 36 to 42 months .For Mega Power Projects the period stands extended to 66 months. Concessional duties on specified goods used in the manufacture of electrically operate vehicle extended to March 31,2016 Food products including iced tea , lemonade and other specified beverages notified for Retail Sale Price based assessment. Continued..

21. GOODS Old Rate(%) New Rate(%) Cigarettes of length not exceeding 65 mm. 72 90 Cigarettes of other length[i.e-Gold Flack Kings.etc.) 21 24.15 Cut tobacco Rs.60 per Rs.70 per Kg TOBACCO PRODUCTS Changes in Excise Duty rates of certain industries. Exemption Particulars Specified raw materials[battery, titanium, palladium wire, eutectic wire, silicone resins and rubbers, solder paste, reed switch, diodes, transistors, capacitors, controllers, coils (steel), tubing (silicone)] used in manufacturing of pacemakers. Nil Pig iron SG Grade and Ferro-silicon magnesium for manufacture of wind operated electrically generators. Nil Round copper wire and tin alloys for manufacture of solar PV ribbon of solar PV cells. Nil Cess on petroleum products including petrol and high speed diesel. Nil

22. GOODS Old Rate(%) New Rate(%) Wafers for manufacture of integrated circuit modules for smart cards 12 6 Inputs for manufacturie of LED drivers and MCPCB for LED lights 12 6 Tablet computers 12 2(without CENVAT) 12.5%(with CENVAT) Mobile Phones 1% (without CENVAT) 6(with CENVAT) 1% (without CENVAT),12.5%( with CENVAT) ELOCTRONICS/HARDWARE GOODS Old Rate(%) New Rate(%) Chassis for ambulances 24 12.5 AUTOMOBILES

23. To Ensure certainty and uniformity in valuation of the goods for the purposes of levy of excise duty: GOODS Abatement Amendment All goods falling under Chapter sub-heading 2101 20, including iced tea[Notified under section 4A of CE act 1944] 30% Inclusion in Third Schedule Goods such as lemonade and other beverages [Notified under section 4A of CE act 1944] 35% Inclusion in Third Schedule

24. CONSUMER GOODS GOODS Old Rate(%) New Rate(%) Leather footwear of RSP>Rs.1000 per pair 12 6 Waters including mineral/aerated water 12 18 Peanut butter 0 2(without CENVAT) 6 (with CENVAT) Condensed milk 0 6(with CENVAT) GOODS Old Rate(%) New Rate(%) Solar water heater and system 0 (without CENVAT) 12.5 (With CENVAT) RENEWABLE ENERGY SECTOR

25. Tax Rate increased from 12 per cent plus education cess(12.36%) to 14 per cent all inclusive*. Proposal to levy additional 2 per cent on value of taxable as Swachh Bharat(Clean India) cess* *To be notified by the CBEC and CBDT Service tax Abatement SERVICES Old Rate(%) New Rate(%) Taxable Value Transport of Goods by Road(GTA). 75% 70% 30% Transport of Goods in a vessel. 60% 70% 30% Transport of Goods & passengers by Rail with or without accompanied belongings. 70% 70% 30% Executive (business/first class) air travel. 60% 40% 60% Services in relation to Chit fund 30% 0% 100%

26. SERVICES Exemption Services of pre-conditioning, pre-cooling, ripening, waxing, retail packing, labelling of fruits and vegetables Yes Life insurance service provided by way of Varishtha Pension Bima Yojna Yes Service provided by way of exhibition of movie by the exhibitor/theatre owner to the distributor or association of persons consisting of exhibitor as one of its member Yes All ambulance services provided to patients Yes Service provided by way of admission to a museum, zoo, national park, wild life sanctuary and a tiger reserve Yes Transport of goods for export by road from the factory to a land customs station (LCS) Yes New Exemptions

27. Amendment to Negative list U/s-66D SERVICES Before Amendmen t After Amendment Access to amusement facility such as rides, bowling alleys, amusement arcades, water parks, theme parks, etc Exempted u/s-66D(j) Taxable Admission to entertainment event of concerts, non- recognized sporting events, pageants, music concerts and award functions. Exempted u/s-66D(j) Exempted subject to entry ticket less then `500 Exhibition of the cinematographic film, circus, dance, or theatrical performances including drama, ballets or recognized sporting events Exempted u/s-66D(j) Exempted u/s-66D(j) Carrying out any processes as job work for production or manufacture of alcoholic liquor for human consumption. Exempted u/s-66D(f) Taxable All services provided by the Government or local authority to a business entity Exempted u/s-66D(a) Taxable

28. SERVICES After Amendmen t 1.Services provided byGovernment shall be restricted only to, 1.A historical monument, archaeological site 2.Canal, dam or other irrigation work; 3.Pipeline, conduit or plant for (i) water supply (ii) water treatment, or (iii) sewerage treatment or disposal. Taxable but Restricted to some services. 2. Construction, erection, commissioning or installation of original works pertaining to an airport or port Taxable 3. Performing artist in folk or classical art form of (i) music, or (ii) dance, or (iii) theatre (except brand ambassador). Taxable ,If service value >`1,00,000 4. Food stuff by rail, or vessels or road will be limited to transportation of food grains including rice and pulses, flours, milk and salt only. Taxable subject to Definition Revision to Mega Exemption Notification No.25/2012-Service

29. SERVICES After Amendment 5.(a)services provided by a mutual fund agent to a mutual fund or assets management company; (b) distributor to a mutual fund or AMC; and (c) selling or marketing agent of lottery ticket to a distributor of lottery Taxable 6. (a)Departmentally run public telephone (b)Guaranteed public telephone operating only local calls (c)Service by way of making telephone calls from free telephone at airport and hospital where no bill is issued Taxable 7. Commission agent located outside India to an exporter located in India Taxable Continued

30. Reverse charge mechanism SERVICES SERVICE PROVIDER SERVICE RECIPIENT Manpower supply and security services when provided by individual, HUF, partnership firm to a body corporate NIL 100% Services provided by mutual fund agents, mutual fund distributors ? ? Services provided by lottery agents ? ? Note The percentage of the service tax to be paid by the each service provider and service recipient clearly not mentioned in the budget & yet to be notified by CBEC. Effective date -1 April 2015 for above RCM applicability.

31. GO Green Be in India , Make in India & Clean India

Some highlight's budget speech 2015 16

Education

crore income

salary income

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heads of income

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wealth tax

crore foreign company

nontax revenue