Highlights of Union Budget 2016-17

BUDGET SEMINAR ACAE jointly with DTPA –  MARCH 1, 2016

       CUSTOMS  DUTY

Heading

Existing

Proposed

Project Imports for cold storage, cold room (including for farm level pre-cooling) being extended for ‘cold chain including pre-cooling unit, pack houses, sorting and grading lines and ripening chamber’s also.

10%

5%

Refrigerated containers

10%

5%

Imitation Jewellery

10%

15%

Solar Lamp

12.5%

NIL

The duty free import allowance for bona fide gifts imported by post or air by courier service.

Rs. 100000

Rs.20000

Coal; briquettes, ovoid and similar solid fuels manufactured from coal

2.5% / 10%

2.5%

Coal gas, water gas, producer gas and similar gases, other than petroleum gases and other gaseous hydrocarbons

10%

5%

CVD exemption on specified machinery required for construction of roads being withdrawn.

NIL

12.5%

Disposable sterilized dialyzer and micro barrier of artificial kidney being exempted from BCD, Excise duty / CVD and SAD

Applicable BCD, excise/CVD,SAD

Nil BCD NIL excise/ CVD nil SAD

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Highlights of Union Budget 2016-17

BUDGET SEMINAR ACAE jointly with DTPA –  MARCH 1, 2016

EXCISE DUTY

Heading

Existing

Proposed

Excise duty on refrigerated containers being reduced

12.5%

6%

Excise duty on parts of railway or tramway locomotives or rolling stock and railway or tramway track fixtures and fittings, railway safety or traffic control equipment, etc. being reduced.

12.5%

6%

Excise duty on branded readymade garments and made up articles of textiles of retail sale price of Rs. 1000 or more being changed.

Nil (Without ITC) or 6% 12.5% (with ITC )

2% (without ITC) or 12.5% (with ITC)

The Tariff value for excise / CVD purposes on readymade garments and made up articles of textiles being changed.

30% of retail sale price

60% of retail sale price

The Tariff value for excise / CVD purpose on readymade garments and made up articles of textiles being changed.

NIL

1% (without ITC ) or 12.5% (ITC)

Excise duty on waters including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured being increased

18%

21%

Excise duty on Gutkha, chewing tobacco (including filter Khaini) and jarda scented tobacco being increased

70%

81%

Excise duty on Unmanufactured tobacco being increased

55%

64%

 

Highlights of Union Budget 2016-17

BUDGET SEMINAR ACAE jointly with DTPA –  MARCH 1, 2016

  • Persumptive Taxation with profit presumption @50% introduced for professionals with receipts up to Rs. 50 Lacs p.a.
  • Limited period compliance window for undisclosed income from 1st June, 2016 to 30th Sept, 2016. Tax payable is 30% + 7.5% Surcharge + 7.5% Penalty. Total tax computed at 45%. Immunity assured from scrutiny and prosecution.
  • E-assessment of scrutiny cases, making life easier for the tax payer.
  • The Government re-affirmed its plans to implement General Anti Avoidance Rule (GAAR) from April 1, 2017, a major negative for Flls & the stock market. Further POEM (place of effective management ) is deferred by 1 year.
  • 1% Tax Collected at Source (TCS) on any in – cash purchase of goods (other than bullion and jewellery ) & services over Rs. 2 lacs.
  • 1% TCS on purchase of luxury car amounting to Rs 10 lac or more.
  • 6% withholding tax (equalization levy ) on B2B transactions by e-commerce companies to holding companies abroad.
  • Securities Transaction Tax (STT) in case of “Options” is proposed to be increased from .017% to .05%.
  • Phasing out deduvtion under Invome Tax:
  • Accelerated depreciation wherever provided in IT ACT will be limited to maximum 40% from 1.4.2017
  • Benefit of deductions for Research would be limited to 150% from 1.4.2017 and 100% from 1.4.2020
  • Benefit of section 10AA to new SEZ units will be available to those units which commence activity before 31.3.2020.
  • The weighted deduction under section 35CCD for skill development will continue up to 1.4.2020
  • 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.
  • One-time scheme of Dispute Resolution for ongoing cases under retrospective amendment.

Highlights of Union Budget 2016-17

BUDGET SEMINAR ACAE jointly with DTPA –  MARCH 1, 2016

Key Direct Tax Proposals

  • People with income less than Rs. 5 lakh to get rebate of Rs 5,000, up from Rs 2,000 last year.
  • Deduction for those who pay rent and do not have a house of their own and also do not get HRA from employers up from Rs. 24,000 to Rs. 60,000 p.a.
  • Disallowance will be limited to 1% of the actual expenditure claimed under rule 8D of Section 14A of income tax Act.
  • Tax on retirees: At present, social security schemes run by retirement fund body EPFO are tax free EEE ( exempt – exempt – exempt) scheme. That means deposits, accrual of interest and withdrawals are tax free under the scheme in order to bring greater parity in tac treatment of different types of pension plans, it is proposed that the contributions made on or after April 1, 2016 by an employee participating in a recognized provident fund and superannuation on withdrawal shall be exempt from tax. It is proposed to provide that any payment in commutation of an annuity purchased out of contrinution made on or after April 1, 2016, which exceeds 40% of the annuity, Shall be chargeable to tax.
  • For first home buyers, additional exemption of interested on housing loan of Rs. 50,000. Qualifying Criteria is that the loan value should be max Rs. 35 Lakh on cost of house not exceeding Rs. 50 lakh.
  • Tax-free superannuation limit increased to Rs 1.5 lacs.
  • Dividend income of individuals and HUF exceeding Rs 10 lac p.a will now be taxable @10%
  • Tax holiday for eligible starts – ups set up after April 1, 2016 for three consecutive years out of the first five years of setting up the company.
  • Long Term Capital gain period for unlisted companied reduced from 3 to 2 years in respect of sale of shares.
  • Presumptive Taxation limit enhanced to Rs. 2 crores. Thus small & medium business can opt for 8% presumed income & will not have to maintain accounts or get them audited up to turnover of Rs. 2 Cr.