1. By CA MANOJ KUMAR 9810764620 FINANACE BILL 2015

2. Rate of Tax No change in Slab Rate for assessee other than corporate Tax Rate for Corporate Nature of CompanyTax Rate The company having total Turnover or gross receipt upto five crores 29% For start up Companies -Registered after Ist March 2016 - Engaged in Manufacturing or production business -Does not avail any benefit under Section 10A or benefit of accelerated Depreciation, additional depreciation, investment allowance, expenditure on scientific research, or any deduction under under Part- C of chapter VI-A other than provision of chapter 80JJAA -Exercise option Before furnishing return 25% Other companies30%

3. Surcharge For assessee other than corporate, the surcharge increased from 10% to 12% in case income exceed 1 cr. For domestic company, surcharge is 7% for income between 1 Cr to 10 Cr. And 12 % for income above 10 Cr. No change for other than domestic Company For Section 115 O, 115QA, 115R, 115 TD surchage will be at the rate of 12%.

4. Section 2 Deposit certificate issued under Gold Monetisation scheme 2015 excluded from the definition of Capital Assets under setion 2(14) w.e.f. Ist April, 2016. Clause 23C in section 2 introduced to provide that the term “HEARING” will include communication of data and documents through electronic mode w.e.f. Ist June 2016. Subsidy or grant by by central govt for the purpose of the corpus of the trust or institution established by central Govt or state government shall not part of total income. A.Y.2017-18

5. Definition of rate in force under section 2(37A) amended to provide that for section 194LBBor 194LBC, it means rate as per Finance Act or DTAA whichever application Amendment in definition of resident company made in last year Finance bill will be applicable w.e.f. A.Y.2017-18.

6. Section 9 Explanation 1 to section 9 is proposed to provide that in case of foreign company engaged in the business of mining of diamond, no income shall be deemed to accrue or arise in india through or from the activities which are confined to the display of uncut and unassorted diamonds in any spcieal economic zone notified by central government. A.Y.2016-17

7. Amendment in section 10 Recognised Provident Fund: Section 10(12) is proposed to provide that on withdrawal of contribution made by employee after Ist April 2016 shall be exempt upto 40% of such withdrawal. National Pension Scheme or Annuity fund : Withdrawal up to 40% of the corpus at the time of retirement to be tax exempt in the case of National Pension Scheme (NPS) annuity fund. Annuity fund which goes to legal heir will not be taxable. However, any transfer from RPF or annuity fund to NPS shall not be taxable. A.Y.2017-18

8. Amendment in section 10 Sec 10(15) is proposed to provide that interest on certificate under Gold Monetization scheme will be exempt. A.Y.2016- 17 Dividend tax: Section 10(34) is proposed to provide Additional tax at the rate of 10% of gross amount of dividend will be payable by the recipients receiving dividend in excess of Rs. 10 lakh per annum.

9. Taxation Section 17 (2) is proposed to increase limit of contribution to approved superannuation fund from 1 lakh to 1.5 lakh. Section 24 is proposed to provide that time period of construction of house property increased from 3 years to 5 years for availing interest on housing loan benefit. A.Y.2017- 18 Section 25A substituted for section 25A, 25AA and 25B so as to provide taxability of arrear of rent realised later on and deduction of 30% there from.A.Y.2017-18

10. Taxation A new clause (ib) of sub section (a) of section 40 is introduced to provide that if equalization levy is not deducted or after deduction, it is not paid in government account, then consideration paid or payable to non-resident for specified services on which equalization levy is deductible under the chapter VIII shall be added to the income of the assessed. It will be allowed in the year in which it is paid. This is with effect from 1 st June 2016. Section 43B, clause (g) introduced to provide that any sum payable by the assessee to the Indian Railway for the use of railway assets shall be allowed in the year in which it is paid. A.Y 2017-18

11. Taxation The section 44AD is proposed to increase the limit from Rs. 1 Core to 2 Core for presumptive taxation at the rate of 8%. It is further proposed to provide if where an assessee declares profit for any previous year in accordance with the provision of this section and he declared profit for any of the five assessment year relevant to the previous year succeeding such period not in the accordance with the provision of subsection (1); he shall not be eligible to claim the benefit of the provisions of this section for five assessment subsequent to the assessment year relevant to the previous year in which profit has not been declared in accordance with the provision of sub-section (1).

12. Taxation A new section 44ADA has been introduce to provide for presumptive taxation in case of professional whose gross receipt do not exceed 50 Lac in the year. The rate of presentation taxation is @ 50%. Further section 44AB is proposed increase the limit or tax Audit from 25 Core to 50 Core for professional. Section 28(va) proposed to provide profession also along with business.

13. Taxation Sec 47 has been proposed to provide further that following transaction shall not be recognized as transfer under section 45 1 Any redemption of any sovereign gold bond issued by reserve bank of India under sovereign gold bond scheme 2015. 2 A new clause (ea) in clause (xiiib) inserted to provide that value of total asset in book of a/c of a company in any of the three preceding P.Y. in which its conversion of company into LLP takes place doesn’t exceeds Rs. 5 crore.

14. Taxation 3 A new clause (xix) inserted to provide that any transfer by unit holder of a capital asset being a unit or units held by him in the consolidating plan of a mutual fund scheme made in consideration of the allotment to him of a capital assets, being a unit or units in the consolidated plan of that scheme shall not be considered as transfer for capital gain tax. A.Y. 2017-18

15. Taxation Sec 48 is proposed to provide indexation benefit to LTCG arising on transfer of said sovereign gold bond scheme A.Y. 17-18. Sec 50 (C) is proposed to provide that where there is difference between the date of agreement to sale and date of registration than the value as assessed by stamp valuation authority on the date of agreement may be taken for the purpose of computing full value of consideration for such transfer A.Y. 17-18.

16. Taxation Sec 54 EE introduce to provide exemption for capital gain tax if capital gain proceeds are invested by assessee in the units of specified fund. A.Y. 17-18. Sec 54(GB) is proposed to provided that capital gain arising on account of transfer of residential house shall not be charged to tax if such capital gain is invested in subscription of shares of a company which qualified to be an eligible start- up subject to other specified condition A.Y. 2017-18.

17. Taxation Sec 55, The definition of cost of improvement in relation to capital asset being goodwill of the business or right to manufacture or produce or process any article or things. Cost of improvement in relation to a capital asset, being goodwill of a business or a right to manufacture, produce or process any article of thing or right to carry on any business shall be taken to be nil.

18. Taxation Further clause (a) sub-section (2) of the aforesaid section provides that the cost of acquisition in relation to a capital asset, being goodwill of a business or a trademark or brand name associated with a business or a right to carry on any business, tenancy right state carriage permits or loom hours shall be taken to be the amount of the purchase price in case the asset is purchased by the assessee and in any other case such cost shall be taken to be nil.

19. Taxation Clause (h) in sec 56 introduce to provide exemption from tax to an individual or HUF on receipt of share as a consequences of demerger, amalgamation or organization of company. A.Y. 17-18. Sec 80, is proposed to provide that carry forward of loss under sub section (2) of section 73A and set off of such loss shall not be allowed if such loss has not been determined in pursuance of return filed in accordance with the provisions of sub-section (1) of section 139. A.Y. 16-17.

20. Taxation Sec 80 (EE) is proposed to provided that interest on housing loan upto Rs. 50000 shall be allowed to those who buy residential house property for first time subject to following condition. Loan sanction between 01/04/2016 to 01/03/2017. The loan amount does not exceed Rs. 35 Lacs. Value of residential house doesn’t exceed Rs. 50 Lacs. As assessee doesn’t own any residential houses on the date of sanction of loan.

21. Taxation Sunset clause to various deduction provided under section 10AA, 35AC, 35CCD, and 80IA, 80IAB and 80IB, and phased out of incentive provided under section 32(rule 5), 35((1)(ii), 35(1)(iii), 35(2AA), 35(2AB), 35AD, 35CCC.

22. Taxation Sec 80 GG is proposed to increase the maximum amount of deduction allowable upto Rs. 5000 per month. Sec 80 IAC introduced to provided for deduction to startup for any three A.Y. out of five A.Y. at the option of the assessee subject to incorporation before 01/04/2019. A.Y. 17-18. Sec 80 JJAA is proposed to extend the benefit of deduction to all assessee who are required to gets their a/c audited u/s 44 AB. A.Y. 17-18. Sec 87A is proposed to provided the increase the rebate from Rs.2000 to Rs.5000 A.Y. 17-18

23. Taxation Section 92CA is proposed to provide that in the circumstances referred in the clause (ii) or close (viii) of explanation (i) to section 153 if the period of limitation available to the transfer pricing officer for making an order is less then sixty days then such remaining period shall be extended to sixty days. With the effect from 1 st June 2016. Section 92D is proposed to provide that person being a constituent entity of an international group shall keep and maintain such document and information of international group as may be prescribed and has to submit the same as required.

24. Taxation Section is proposed to provide that long term capital gain arising from transfer of capital assets being unlisted security and share of a company not being a company in which public are substantially interest shall be changeable to tax @ 10% Assessment year 2017-18.

25. Taxation A new section 115BA introduce to provide that a domestic company may opt to pay tax @ 25% if the following condition are satisfied:- Setup or Registered after 1 st March 2016. Engaged in manufacturing and production. Income computed without any deduction under section 10AA, 32(i), 32AC, 32AB, 35, 35AC, 35CCC, 35CCD chapter VIA other then provision of section 80 JJAA or without set off of any loss carried forward loss if such loss is relatable to any of the deduction as referred. The option shall be exercise on or before the due date under subsection (1) of section 139 for filling return. Assessment year 2017-18.

26. Taxation A new section 158 BBDA introduced to provide for taxation of dividend at the rate of 10 % in the hand of individual, l HUF, Firm who is resident in India if the amount of dividend exceeds 10 Lacs. A.Y. 17-18. Sec 158 BBE is proposed to provide that the setoff of any loss shall not be allowable in the respect of income u/s 68, 69A, 69B, 69C, 69D. A.Y. 17-18.

27. Taxation A new section 158BBF introduced to provide where the total income of eligible assessee include any income by way of royalty in respect of patent developed and registered in India shall be computed as follows. 10% on the total income from royalty without any deduction and normal tax on the remaining income

28. Taxation Sec 115JB is proposed and in a new clause (fd) in explanation 1 to subsection 1 added to provide that book profit shall be increased by amount of expenditure relating to royalty income in respect to patent chargeable u/s 158BBF. It is further amended and new clause (iig) introduced to provide the reduction from book profit of an income by way of royalty chargeable u/s 158BBF A.Y. 17-18. Further an explanation inserted to provide that the MAT provision shall not be applicable to the foreign company provided foreign company resident to the country with which the India has DTAA or it is resident of a country with which India doesn’t have DTAA and company doesn’t require to seek registration for any law for the time being in force relating to the company. A.Y. 2001-02.

29. Taxation sub clause (ii) of the said clause seeks to insert a new sub- section (7) in the said section so as to provide that in case of a company, being a unit of an International Financial Service Centre and deriving its income solely in convertible foreign exchange, the rate of tax under section 115 BJB shall be 9% instead of 18%.

30. Assessment Section 119 is proposed to insert section 270A in subsection (2) clause (a). Assessment year 2017-18. Section 124 subsection (3) is proposed to provide that no person shall be entitled to call in question the jurisdiction of an AO after the expiring of one month from the date on which he was served with notice under sub section (1) of section 153A or Subsection (2) of section 153C or after completion of assessment, whichever is earlier. W.e.f. 1 st June 2016.

31. Assessment Section 133C is proposed to provide that information or documents so obtained by the prescribed income tax authority may be processed and the outcome of such processing may be made available to the Assessing officer for further necessary action if any. With effect from 1 st June 2016.

32. Assessment Subsection 4 of section 139 is proposed to provide that person who has not furnish return u/s 139(1) may furnish the return up to the end of relevant A.Y. or before completion of completion of assessment whichever is earlier. Further subsection 5 of section 139 is proposed to provide that if any person has furnished return either u/s ( 1) or( 4) discover any omission or wrong statement therein he may furnish a revised return at any time before the expiry of 1 year from the end of relevant A.Y. or before the completion of assessment whichever is earlier.

33. Assessment Further, vi th proviso to sub section 1 is proposed to provide that a person, who during the previous year earns income under clause (38) of section 10 and such income exceeds the maximum amount which is not chargeable to tax in his case, shall also be liable to file return of income for the previous year in the prescribe form and verified in the prescribe manner. Further section 139(9) is proposed to omit clause (aa) of the explanation thereby return will not be defective for non- payment of self assessment tax and interest thereon on or before the date of furnishing the return A.Y. 2017-18.

34. Assessment Sub-section 3 of section 139 is proposed that sub-section 2 of section 73 A included thereby the benefit of loss under this section will not be available if the return is filed after the due date (A.Y. 2016-17).

35. Assessment Amendment in clause (a) of subsection 1 of section 143 proposed thereby expanding the scope of the adjustment that can be made at the time of processing of return to include following adjustment. On account of arithmetical error in the return or on account of an incorrect claim. Disallowance of loss claimed if return of the previous year for which set off of loss is claimed is furnished beyond the due date specified under sub-section (1) of section 139. Disallowance of expenditure indicated in the audit report but not taken into account in computing the total income in the return

36. Assessment Disallowance of deduction claimed under section 10 AA, 80IA, 80IAB, 80IB, 80 IC, 80ID or section 80IE, if the return is furnished beyond the due date specified under sub-section (1) of section 139. Addition of income appearing in Form 26 AS or Form 16 A or Form 16 but not included in computing the total income in the return. However before making any adjustment, an opportunity shall be provided to the assessee to rectify the mistake within 30 days of issue of such intimation and if the assessee doesn’t respond; adjustment will be made.

37. Assessment Further subsection 1 D of section 143 is amended to provide that before making assessment u/s 143(3) return shall be processed u/s 143(1)(a). A.Y. 2017-18. Subsection 143 (2) amended to provide the power of issuing notice other than A.O. to prescribe income tax authority. A new clause (ca) in explanation 2 after clause ( c) in section 147 inserted to provide re-opening on the basis information or document received by AO under sub-section 2 of sec 133 C.

38. Assessment Time limit for assessment and reassessment and Recomputation, the period for the completion of assessment 143 or 144 be changed from existing two year to 21 months from the end of A.Y in which the income was first assessable : the period for the completion of assessment under sec 147 be changed from the existing 1 yrs to 9 month from the end of month in which notice was served u/s 148.

39. Assessment Section 206AA is proposed by substituting in subsection 7 to provide that the provision of the sub section(1) shall also not apply to nonresident, not being a company or to foreign company, referred to interest income under section 194LC and any other payment subject to such condition as may be prescribed. Section 282A is proposed to be amended so as to provide that document and notice required to be issue by the income tax authority can be issued either in paper form or electronic form with effect from 1 st June 2016.

40. Collection and Deduction of tax Section 206C relating to profit and gain form business of trading of alcoholic liquor or forest produce and scrap is amended to provide TCS @ 1% on sale of motor vehicle exceeding 10 Lac rupees or for sale of any other goods (other than Bullion and jewelry) or provide any service in cash Rs. 2 Lac rupees or more It is further provided section is not applicable where TDS already been deduction with effect from 1 st June 2016

41. Collection and Deduction of tax Section 211 is proposed to provide that advance tax payment schedule for non corporate assessee shall be same as per corporate assessee. Further it is proposed that an eligible assessee in respect of eligible business referred to in the section 44AD opting from computation of profits or gains or business on presumptive basis shall be required to pay advance tax on or before the 15 th March of financial year with effect from 1 st June 2016.

42. Collection and Deduction of tax Subsection 2A of section 220 is proposed to provide that an order accepting or rejecting the application of assessee shall be passed within a period of 12 month from the end of month in which an applicable is received with effect 1 st June 2016. And in case of pending application as on 1 st June 2016 the order shall be passed on or before 31 st March 2017. Section 234C is proposed to be amended in consequences of amendment in section 211. And similarly for 44AD.

43. Collection and Deduction of tax No interest under section 234C shall tax charged were short fall in the payment tax due on returned income is on account of failure to estimate profit and gains from business and profession in case where income accrued or raised under the head for the first time with effect from 1 st June 2016.

44. Interest on Refund Sec 244 A, relating to interest on refund has been amended to provide as follows: In case where return is filed after the due date than period for grant of interest of income on refund shall begin from the date of filing of return. Where an assessee is eligible to interest on refund of self assessment tax for the period beginning from the date of payment of tax or filing of return, whichever is later, to the date on which refund is granted.

45. Interest on Refund Further a new sub-section (1A) is inserted to provided that where refund arising out of appeal effect is not given within 3 months than an additional interest of 3 % shall be paid to the assessee for the period of delay w.e.f 1 st June 2016.

46. Appeal Section 249 (2)(b) provides for a period of 30 days to make an appeal from the date of receipt of demand notice. It is proposed that where as assessee makes an application u/s 270 (AA) of the act seeking immunity from penalty and prosecution than the period begin from the date on which an application made to the date on which order rejecting the application is served to the assessee shall be excluded for calculation of 30 days. This is w.e.f 1 st April 2017.

47. Appeal Sec 253 amended so as to provide an appeal by assessee aggrieved by an order passed by commissioner appeal or principal commissioner or commissioner u/s 270(A). This is from A.Y. 2017-18. Further sub-section 2A and 3A providing for appeal to the tribunal by the department against DRP order is omitted w.e.f 1 st June 2016. Sub-section 2 of section 254 is proposed to provide that appellate tribunal may rectify any mistake apparent from record within 6 month from the end of year in which order is passed.

48. Appeal Section 255 amended so as to enhance the power of single member bench to dispose off the case from total income of 15 lakh to 50 lakh w.e.f. 1 St June 2016.

49. Penalty Sec 271 (1)(c) is replaced by sec 270 (A) for under reporting and misreporting of the income. The silent features are as follows: Requirement of recording satisfaction removed. The requirement of initiating penalty proceeding at the time of assessment omitted subject to time limit u/s 275. In case of under reporting penalty will be 50 % of tax payable and incase of misreporting penalty will be 200% of tax payable

50. Penalty Sec 270 (AA). An assessee may make an application to grant immunity from imposing of penalty u/s 270 (A) or initiation of proceeding u/s 276 (C) provided the amount of interest and tax has been paid within the period specified in the demand notice and no appeal is filed. Application can be filed within one month from the end of month in which the order is received. The A.O. may allow filing of application even after expiry of period of filing appeal provided proceeding for penalty not initiated on account of misreporting.

51. Penalty The provision of section 271 shall not be applied from Assessment Year 2017-18 towards. Section 271AAB (i)(c) is proposed to be amendmended to provide flat penalty rate of 60% in place of 30 to 90%. A new section 271GB introduced to provide that if any reporting entity fail to report under section 286(2), penalty Rs. 5000/- per day for one month and then Rs. 50000/- thereafter.

52. Penalty If the reporting entity fail to provide information as required under section 286(6) then penalty is Rs. 5000/- per day and if the information is submitted even after the order directing the person to pay the penalty served on him, Rs. 50000 per day from the date of service of such order. If the entity furnished inaccurate particulars knowingly, the penalty Rs. 5 Lacs, w.e.f 2017-18. Section 272A, a new clause D inserted to provide for levy of penalty for each default or failure to comply the notice issued under section 140(2) (i) or 143(2) or 142(2A) w.e.f. A.Y. 2017-18.

53. Penalty Section 273A and 273AA is amended so as to provide time limit for rejecting or accepting the application within 12 months from the end of the month which the application is received with effect from 1 st June 2016. Section 273B is amended so as to include section 271GB with effect from assessment year 2017-18. Section 281B amended and new sub section 3 to 9 introduced so as to provide that A.O may revoke the attachment the property where the assessee furnishing the bank guaranty from a schedule bank for an amount not less than fair market value with effect from 1 st June 2016.

54. Others Section 286 introduced relating to furnishing of the report in respect of international group.

55. Thanks By CA MANOJ KUMAR 9810764620