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(A) Income Tax Key Highlights
1. GST will put in place a state-of-the-art indirect tax system by 1st April, 2016.
Tax Proposals
14. No change in the rate of personal income-tax and the rate of tax for companies in respect of income earned in the financial year 2015-16, assessable in the assessment year 2016-17.
Benefits to Middle Class Taxpayers
35. Investments in Sukanya Samriddhi Scheme which is already eligible for deduction under Section 80C. All payments to the beneficiaries including interest payment on deposit will also be fully exempt
Total Deductions avaialble after budget proposals:
46. Direct Tax Code deferred
2. Pradhan Mantri Suraksha Bima Yojna to be launched to cover accidental death risk of 2 lakh for a premium of just 12 per year
3. Atal Pension Yojana, to provide a defined pension, depending on the contribution, and its period. To encourage people to join this scheme, the Government will contribute 50% of the beneficiaries’ premium limited to `1,000 each year, for five years, in the new accounts opened before 31st December, 2015
4. Pradhan Mantri Jeevan Jyoti Bima Yojanato covers both natural and accidental death risk of `2 lakhs. The premium will be `330 per year, or less than one rupee per day, for the age group 18-50
5. New scheme for providing Physical Aids and Assisted Living Devices for senior citizens, living below the poverty line
6. Scheme 'Nai Manzil’ to be launched this year to enable Minority Youth who do not have a formal school-leaving certificate to obtain one and find better employment.
7. Employee may opt for EPF or the New Pension Scheme (NPS). Secondly, for employees below a certain threshold of monthly income, contribution to EPF should be optional, without affecting or reducing the employer’s contribution
8. With respect to ESI, the employee should have the option of choosing either ESI or a Health Insurance product, recognized by the Insurance Regulatory Development Authority (IRDA)
9. Gold Monetisation Scheme to be launched which will replace both the present Gold Deposit and Gold metal Loan Schemes. The new scheme will allow the depositors of gold to earn interest in their metal accounts and the jewelers to obtain loans in their metal account. Banks/other dealers would also be able to monetize this gold
10. Measures to be introduced to incentivize credit or debit card transactions, and disincentivise cash transactions.
11. Distinction between different types of foreign investments to be done away, especially between foreign portfolio investments and foreign direct investments
12. Fight against the scourge of black money to be continued.
13. GST to be imlemented from next year
15. Surcharge @12% on individuals, HUFs, AOPs, BOIs, artificial juridical persons, firms, cooperative societies and local authorities having income exceeding 1 crore.
16. Surcharge for domestic companies having income exceeding 1 crore and upto 10 crore @ 7% and surcharge @ 12% is proposed to be levied on domestic companies having income exceeding 10 crore.
17. For Foreign companies the surcharge will continue to be levied @2% if the income exceeds 1 crore and is upto 10 crore, and @5% if the income exceeds 10 crore
18. surcharge @12% as against current 10% on additional income-tax payable by companies on distribution of dividends and buyback of shares, or by mutual funds and securitisation trusts on distribution of income
19. Education cess @ 2% and Secondary and Higher Education Cess @ 1% to continue.
20. Provisions of section 269SS and 269T to be amended to prohibit acceptance or re-payment of advance in cash of 20,000 or more for any transaction in immovable property. It is also proposed to provide a penalty of an equal amount in case of contravention of such provisions
21. GAAR Provisions to be applicable from FY 2017-18, investments made upto 31.03.2017 shall not be subjected to GAAR
22. Period of applicability of reduced rate of tax at 5% in respect of income of foreign investors (FIIs and QFIs) from corporate bonds and government securities, from 31.5.2015 to 30.06.2017 amendedas per section 194LD
23. Rate of income tax on royalty and fees for technical services reduced from 25% to 10% u/s 115A
24. The eligibility threshold of minimum 100 regular workmen for deduction for employment of new regular workmen reduced to fifty u/ s80JJAA
25. Additional depreciation @ 20% is allowed on new plant and machinery installed by a manufacturing unit or a unit engaged in generation and distribution of power
26. Section 9 amended to provide that the share or interest shall be deemed to derive its value substantially from the assets located in India, if on the specified date, the value of such assets represents at least fifty per cent of the fair market value of all the assets owned by the company or entity
27. Section 92BA of the Income-tax Act so as to increase the threshold limit for applicability of transfer pricing regulations to specified domestic transactions from 5 crore to 20 crore
28. "Yoga" now covered in the definition of ‘charitable purpose’ u/s 2(15
29. Genuine charitable organizations can carry out activities in the nature of business undertaken subject to the condition that aggregate receipts from such activity is less than 20% of the total receipts
30. section 255 of the Income-tax Act amended to increase the monetary limit from 5 lakh to 15 lakh, for a case to be heard by a Single Member Bench of the ITAT
31. Wealth tax abolished and replaced with an additional surcharge of 2% on the super-rich with a taxable income of over 1 crore. The information regarding the assets which are currently required to be furnished in wealth-tax return will be captured in the income tax returns.
32.Corporate tax to be reduced from existing 30% to 25% over the next 4 years.
33. Rationalisation and removal of various kinds of tax exemptions and incentives for corporate taxpayers
34. 100% deduction for contributions, other than CSR contributions, to the Swachh Bharat Kosh or Clean Ganga Fund.
36. Increase in the limit of deduction u/s 80D in respect of health insurance premium from 15,000 to 25,000. For senior citizens the limit will stand increased to 30,000 from the existing 20,000. Super Senior Ciitizens who are not covered by health insurance, deduction of Rs. 30,000 towards expenditure incurred on their treatment will be allowed
37. The deduction limit of 60,000 u/s 80DDB towards expenditure on account of specified diseases of serious nature is proposed to be enhanced to 80,000 in case of very senior citizens
38. Additional deduction of 25,000 will be allowed for differently abled persons under Section 80DD and Section 80U of the Income-tax Act.It is also proposed to increase the limit of deduction from 1 lakh to 1.25 lakh in case of severe disability
39. It is proposed to increase the limit of deduction u/s 80CCD of the Income-tax Act on account of contribution by the employee to National Pension Scheme (NPS) from 1 lakh to 1.50 lakh. It is also proposed to provide a deduction of upto ` 50,000 over and above the limit of ` 1.50 lakh in respect of contributions made to NPS.
40. It is proposed to increase the limit of deduction u/s 80CCC of the Income-tax Act on account of contribution to a pension fund of LIC or IRDA approved insurer from 1 lakh to 1.5 lakh.
41. Section 197A amended to provide the facility of filing self-declaration of non-deduction of tax by the recipients of taxable maturity proceeds of life insurance policy
42. it is proposed to relax the requirement of obtaining TAN by the individual or HUF who is required to deduct tax on acquisition of immovable property from a non-resident.
43. Transport allowance exemption is being increased from Rs. 800 to Rs. 1,600 per month.
45. For the benefit of senior citizens, service tax exemption will be provided on Varishta Bima Yojana
Deduction u/s 80C 1,50,000
Deduction u/s 80CCD 50,000
interest on house property loan
(Self occupied property) 2,00,000
Deduction u/s 80D on health
insurance premium 25,000
Exemption of transport allowance 19,200
Total 4,44,200
47. New Law on Black Money
(a) Concealment of income and assets and evasion of tax in relation to foreign assets will be prosecutable with punishment of rigorous imprisonment upto 10 years. the offenders will not be permitted to approach the Settlement Commission, penalty for such concealment of income and assets at the rate of 300% of tax shall be levied
(b) Non filing of return or filing of return with inadequate disclosure of foreign assets will be liable for prosecution with punishment of rigorous imprisonment up to 7 years
(c) Income in relation to any undisclosed foreign asset or undisclosed income from any foreign asset will be taxable at the maximum marginal rate. Exemptions or deductions which may otherwise be applicable in such cases, shall not be allowed.
(d) Beneficial owner or beneficiary of foreign assets will be mandatorily required to file return, even if there is no taxable income.
(e) The offence of concealment of income or evasion of tax in relation to a foreign asset will be made a predicate offence under the Prevention of Money-laundering Act, 2002 (PMLA).
48. New and more comprehensive Benami Transactions (Prohibition) Bill
49. CBDT to issue clarification on regarding applicability of indirect transfer provisions to dividends paid by foreign companies to their shareholders.
50. for FIIs, profits corresponding to their income from capital gains on transactions in securities which are liable to tax at a lower rate, shall not be subject to MAT
51. Education Cess and the SHE Cess in Central Excise duty subsumed and the general rate of Central Excise Duty of 12.36% including the cesses is being rounded off to 12.5%.
52. Transporters owning not more than 10 Gods Carriage to furnish declaration Format of declaration click here >>
for non deduction of TDS u/s 194C(6)
(B) Key Highlights – Service Tax Click Here >>
Revised TDS Rate Chart
for FY 2015-16 AY 2016-17
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Section 87A Rebate Availability for
FY 2015-16 AY 2016-17
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Income Tax Basic Exemption Limit Slab FY 2015-16
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Other amendments deduction reliefs by Budget 2015-16 for FY 2015-16
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Union Budget 2015-16-17 Key Highlights and Changes in Income Tax, Service Tax |28-02-2015|
