Monday, February 29, 2016

Here is the analysis of Union budget 2016-17 by Zawar Associates, Aurangabad:

Dear Friends,
               Here is the analysis of Union budget 2016-17 by Zawar Associates, Aurangabad:
Tax Proposals:
Changes in Direct Taxes

2. Limit for Tax Audit for Professionals is Rs. 50 lakh
3. Professionals deemed profit will be 50%.
4. 80JJAA will be available to all Tax Audit assesses.
5. Accelerated depr will be limited to max 40%
6. New mfg co. to be taxed at 25% + surcharge and cess (effective 29 %)
7. 100% deduction of profits for 3 yrs for startups. MAT will apply in such cases.
8. No tax for profits to housing project for flats upto 30 sq. mtrs in 4 metro cities; and 60 sq. mtrs in other cities.
9. Surcharge @ 15% on income > Rs. 1 crore.
10. TCS @ 1 % on purchase of luxury cars > Rs. 10 lakh.
11. TCS 1% on  purchase of goods and services in cash > Rs. 2 lakh.
12. STT on 'Options' will be 0.05%. (Existing 0.017%)
13. Interest on IT refund @ 9% p.a against present rate of 6% p.a
14. No need to deduct TDS @ 20% of assessee having no PAN if other specified documents are provided.
15. Tax exemption limit increased to Rs 300000 for persons having taxable income < Rs. 500000.
16. Limit of deduction U/s 80 GG is increased from Rs. 24000/- to Rs. 60000/-.
17. No Capital Gain tax if the capital gain amount is invested in start up.
18. House purchased for < Rs. 50 lacs,  loan < Rs.35 lacs, 1st time purchase, Additional deduction of Rs. 50000/- in housing loan interest.
19. Voluntary Declaration Scheme - Undisclosed income can be disclosed by paying tax @ 45% (No scrutiny or enquires will be held for the same).
20. Corporate tax reduced to 29% for small business having turnover less than Rs. 5 Crores.
21. Concealment penalty @ 50% for under reporting of Income and 200% for Misreporting of Facts.
22. Tax on Dividend @ 10% if dividend received > Rs. 10 lakhs.
23. No CG tax on realization of Sovereign Gold Bond issued by RBI.
24. No CG tax on transfer of units in merger or consolidation of plans of a mutual fund.
25. No CG tax on realization of Deposit issued under Gold Monetization Scheme, 2015.
Changes in Indirect Taxes
1. No GST brought in this session.
2. Basic custom and excise duty on refrigerated containers reduced to 5% and 6%.
3. Increase in Excise duty for Tobacco Products (except Beedi) 10-15%.
4. Excise duty @ 1%   (If input credit not taken) and @ 12.5% (if credit taken) on artificial jewellery, diamond jewellery, and all kind of designer jewellery.
5. 11 new benches will be set-up at CESTAT i.e. Customs, Excise and Service Tax Appellate Tribunal for faster Tax assessments.
6. Krishi Kalyan Cess will be charged on all types of taxable services @ 0.5%. Hence effective rate of Service Tax would be 15%.
7. No Service Tax will be charged for houses built in less than 60 sq. Meter.
8. Service tax exemptions to Rural Electrification Plans.
9. No service tax will be levied on General Insurance Service in case of Nirbhaya Health Insurance.