Direct Tax – At a Glance

Direct Tax – At a Glance

• No change in income tax slabs
• A tax credit of Rs. 2,000 to every person with an income of up to Rs. 5 lakh per annum
• Surcharge of 10 % on persons (other than companies) whose taxable income exceeds Rs. 1 crore for only one year
• Increase in surcharge from 5 % to 10 % on domestic companies whose taxable income exceeds Rs. 10 crore for only one year
• Increase in surcharge from 2 % to 5 % on foreign companies paying higher rate of corporate tax, whose taxable income exceeds Rs. 10 crore for only one year
• Increase in surcharge from 5 % to 10 % on dividend distribution tax or tax on distributed income for only one year
• No change in education cess i.e. it continue to remain the same at 3 %.
• Permissible premium rate increased from 10 % to 15 % of the sum assured by relaxing eligibility conditions of life insurance policies for persons suffering from disability and certain ailments.
• Contributions made to schemes of Central and State Governments similar to Central Government Health Scheme will be eligible for deduction under section 80D of the Income tax Act.
• 100 % deduction under income tax act on donations made to National Children Fund
• Manufacturing companies eligible for investment allowance of 15 % for investment made more than Rs. 100 crore in plant and machinery during the financial year 2013-14
• Eligible date for projects in the power sector to avail benefit under Section 80-IA extended from 31.3.2013 to 31.3.2014.
• Concessional tax of 15 % to be continued for one more year on dividend received by an Indian company from its foreign subsidiary
• Securitization Trust to be exempted from Income Tax, however tax to be levied at specified rates only at the time of distribution of income for companies, individual or HUF etc. No further tax on income received by investors from the Trust.
• Investor Protection Fund of depositories exempt from Income-tax in some cases.
• A Category I AIF set up as Venture capital fund allowed pass through status under Income-tax Act.
• TDS of 1 per cent on land deals worth over Rs. 50 lakh, however agricultural land are exempted
• Withholding tax of 20 % on profits distributed by unlisted companies to shareholders through buyback of shares.
• Royalty and technical expertise tax increased from 10 % to 25 %, where DTAA doesn’t apply
• Securities Transaction Tax brought down to 0.01 % from 0.017 %
• Commodity transaction tax of 0.01 per cent introduced on non-agri futures traded on commodity market
• Modified provisions of GAAR will come into effect from 1.4.2016.