TAX INCENTIVES AND RELEIFS:
o Effective from AY 2013-14 assessees in business of generation and distribution of power are eligible for initial depreciation @ 20% of actual cost of new machinery (other than ships and aircraft) acquired and installed in previous year u/s 32(1)(iia).
o Extension of the sunset date by one year for power sector undertakings so that they can be set up on or before March 31, 2013 for claiming 100 per cent deduction of profits for 10 years.
- o Income of a foreign company received in India in Indian currency on account of sale of crude oil to any person in India is exempted u/s 10(48).
- o Weighted deduction of 200% relation to expenditure incurred on scientific research on in-house research and development facility of any specified article or thing u/s 35(2AB) has been extended for a further period of five years to 31.03.2017.
- o Weighted deduction of 150% of expenditure incurred on agricultural extension is provided in new section 35CCC & 35CCD.
- o It is further proposed to remove the cascading effect of Dividend Distribution Tax (DDT) u/s 115-O in a multi-tier corporate structure.
- Concessional rate of taxation @ 15% of gross dividends received by an Indian company from specified foreign company to be extended in respect of dividend received in F.Y. 2012-13 also
- New Section 35CCD for weighted deduction of 150% of expenses ( not being in nature of land or building) incurred on skill development projects as notified by the board.
- o Threshold limit for audit u/s 44AB and 44AD (presumptive tax) has been increased from Rs 60 lakhs to Rs 1 crore for persons carrying on business and for persons carrying on profession it has increased from Rs 15 lakhs to Rs 25 lakhs.
- o Senior citizens are exempted from paying advance tax not having any income chargeable under the head Profits and gains from business or profession.
o SECTION 35AD Investment linked deduction of capital expenditure incurred in the following businesses is proposed to be provided at the enhanced rate of 150 per cent, as against the current rate of 100 per cent.
o Cold chain facility
o Warehouses for storage of food grains
o Hospitals
o Fertilisers
o Affordable housing
· Section 35AD has been amended to include 3 new business for the purposes of investment linked deduction:
· bee keeping and production of honey and beeswax
· container freight station and inland container depots
· warehousing for storage of sugar
o Reduction in Securities Transaction Tax (STT) by 20 per cent (from 0.125 per cent to 0.1 per cent) on cash delivery transactions.
INTERNATIONAL TAXATION PROVISIONS
)
· INCOME DEEMED TO ACCRUE OR ARISE IN INDIA: Income deemed to be accruing or arising to non-residents directly or indirectly through the transfer of a capital asset situated in India is to be taxed in India with retrospective effect from 1 April 1962. This amendment has been proposed for clarifying the scope of Section 9 and 195, in the background of certain recent judicial pronouncements, by inserting explanations. Therefore explanation is given to Section 9(1)(i), 2(14), and 2(47). This has been given a retrospective effect from 01.04.1962. Withholding tax obligation on payment of income to non-residents clarified to be applicable to non-residents in all scenarios and notwithstanding they having no formal taxable presence in India u/s 195 and has retrospective effect. This has negated the decision of Vaodafone case.
· NON RESIDENT SPORTSMEN, ENTERTAINER: Income arising to non- resident sportsman, sports association and entertainer shall be taxable @ 20% of gross receipts. Section 194E has been amended to provide withholding tax @ 20%.
· Royalty income for non-residents to include computer software includes transmission by satellite, cable, optic fibre or any other such technology with retrospective effect from 1 June 1976.
· Tax Residence Certificate (TRC): Section 90 & 90A has been amended to enable make submission of TRC containing prescribed particulars, but not sufficient for availing benefits of the agreements referred to in these sections.
· ADVANCE PRICING AGREEMENT (APA): In a globalised economy with expanding cross-border production chains and growing trade within entities of the same group, Advance Pricing Agreement (APA) can significantly bring down tax litigation and provide tax certainty to foreign investors will be effective from 01.07.2012
· Transfer pricing regulations will apply to certain domestic transactions where the aggregate amount of all such domestic transactions exceeds Rs 50lakhs in a year.
· With retrospective effect from 01.04.2002 the tolerance band of 5% is not taken as standard deduction while computing ALP. However completed assessments will not be reopened in this ground. It shall be applicable to all proceedings pending since 01.10.2009.
· All assesses who are required to file transfer pricing report the due date would be 30th November which was earlier available only to a corporate assessees.
· Intangible property used in definition of international transaction shall include a transaction of business restructuring or reorganization and has been given a retrospective effect from AY 2002-03.
· DISPUTE RESOLUTION PANEL: With effect from 1 April 2009, the enhancement powers of DRP to include any matter arising out of the draft assessment order. The CIT / AO can now file an appeal to the Tribunal against an order passed pursuance to the directions of DRP as stipulated
· GENERAL ANTI AVOIDANCE RULES: Introduction of General Anti Avoidance Rule (GAAR) in order to counter aggressive tax avoidance schemes, while ensuring that it is used only in appropriate cases, by enabling a review by a GAAR panel
OTHER AMENDMENTS
· Section 10(23C), 13 and 143 is amended with retrospective effect from AY 2009-10 that charitable organizations from commercial activities exceeding Rs 25 lakhs shall not get the benefit of tax exemption whether or not registration is cancelled or withdrawn.· W.e.f AY 2013-14 any payment exceeding sum of Rs 10,000 shall be allowed as a deduction u/s 80G, 80GGA if sum is paid by any mode other than cash.
· It has been clarified that Section 111A is amended with retrospective effect from 01.04.2009 to increase tax rate to 15% instead of 10%.
· LIFE INSURANCE POLICIES: Threshold limit is reduced from 20% to 10% of the actual capital sum assured u/s 10(10D). Exemption would be available for insurance policies issued on or after 01.04.2012 if premium paid does not exceed 10% of actual capital sum assured. Deduction u/s 80C shall be allowed only to extent of 10% of actual sum assured.
· In order to augment funds for SMEs, it is proposed to exempt capital gains tax on sale of a residential property, if the sale consideration is used for subscription in equity of a manufacturing SME company for purchase of new plant and machinery.
No comments:
Post a Comment