Service Tax Through Finance Bill 2016 Tax Amendment

  Section 65B (Applicable from the date on the enactment of Finance Bill’ 2016) DEFINITIONSSOME DEFINITIONS AMENDED 1. In the definition of the term “Service”, sub-clause (ii)(a) of “Explanation 2” is proposed to be amended to clarify that activity carried out by a lottery distributor or selling agents of the State Government under the provisions of the Lotteries (Regulation) Act, 1998, is leviable to service tax. Section 4(c) of the Lotteries (Regulation) Act, 1998 provides that the State Government shall sell the tickets either itself or through distributors or selling agents. Thus, as per the provisions of the Lotteries (Regulation)… Read more

Startup India – Know the Benefits

CA Pavan Jayaprakash With the ever changing face of technology and networking, Startup is no more a buzz word in India. The young generation is ready to go lengths and risk their career map to ideate a startup. But, with this comes the baggage of challenges and difficulties. Starting from complex and twisted registration process, hard to understand company laws, finding capital, manpower, etc., to competing in the market, Startups are running the rat race to see the light of the day. On the event of the previous year’s Independence Day, Prime Minister Narendra Modi mentioned about the new initiative,”… Read more

Export Procedure – Exempted Unit – Garment Exporter

CA Bhavin Mehta There can be a situation where units are fully exempted from payment of Central excise duty as the value of the clearances for home consumption is less than 1.5 crore. However, total value of clearances (domestic plus export) is more than 4 crore. Let’s take an example for better understanding Year Clearance for home consumption Clearances for export Total value of clearances 2014 – 15 1 crore 64 crore 65 crore 2015 – 16 1.20 crore 80 crore 81.20 crore In the above scenarios, since the value of the clearances for home consumption is less than 1.5… Read more

100% Tax Deduction on Affordable Housing Scheme – 80IBA

CA Pavan Jayaprakash Overview: One of the biggest challenges faced by our growing economy in coming days is providing affordable housing, sanitation and a safe environment to the Citizens. Real estate prices have also skyrocketed over the past couple of decades leaving the common man with only dreams of owning a house. As per KPMG report the housing need is almost equally distributed in urban and rural areas in the range of 5 to 6 crore units. The analysis of KPMG is given below: Prime Minister envisioned Housing for All (HFA) by 2022 when the Nation completes 75 years of… Read more

Section 44 ADA Provision

The professionals have been brought under the ambit of Presumptive Taxation for the first time in history of Indian Taxation by virtue of Section 44ADA proposed in the Union Budget 2016. It would be a welcome step provided that the proposed Net Profit (NP) rate would be rational. The Presumptive NP rate of 50% on Professionals and their Partnership Firms, as proposed in the Union Budget 2016 u/s 44ADA, is on very higher side and may cause very high tax incidence on such professionals and their partnership firms. Net Profit Rate should be fixed at a maximum of 30% instead… Read more

Way to Save Personal Income Tax – Very Useful Article

Post-Budget, many salaried Indians are left wondering whether the FM has left them richer or poorer. But hidden in the tangle of provisions are many ways and means that can help you save a chunk of tax. Did you know that renting out your second home is smarter than keeping it empty, or that sometimes HRA gives you a bigger break than a company flat? This Times of India-EY Guide is designed to help you understand the key tax proposals of the Budget and minimize the pinch 1. WHY YOUR TAXABLE INCOME IS NOT THE SAME AS YOUR INCOME A typical salaried… Read more

Bullet Point on Income Tax Provision – Budget 2016-17

INDIVIDUALS / HUF / AOP / BOI No change in income tax rates, no increase in tax exemption Limit. First-time home buyers to get additional deduction of Rs 50,000 on interest for loan upto Rs 35 lakh. The cost of house should not be more than Rs. 50 lakh. Surcharge on income tax for those with incomes exceeding 1 crore per annum raised from 12% to 15%. Relief u/s 87A- Ceiling of tax rebate for tax payers with up to Rs 5 lakh annual come raised to Rs. 5,000 from Rs. 2,000 currently. Deduction under Section 80GG for individuals paying… Read more

Service Tax Analysis on Budget 2016-17

F. No. 334/8/2016-TRU Government of India Ministry of Finance Department of Revenue (Tax Research Unit) *** Amitabh Kumar Joint Secretary (Tax Research Unit) Tel: 011-23093027; Fax: 011-23093037 E-mail: amitabh.kumar@nic.in D.O.F. No.334/8/2016-TRU New Delhi, dated February29th, 2016 Dear Madam/Sir, Subject: Union Budget 2016 – Changes relating to Service Tax – reg. The Finance Minister has, while presenting the Union Budget 2016-17, introduced the Finance Bill, 2016 in the Lok Sabha on the 29th of February, 2016. Clauses 145 to 157 of the Bill cover the amendments made to Chapter V of the Finance Act, 1994. Chapter VI of the Bill (clause… Read more

40% Tax on EPF/NPS Contribution

#Budget 2016-  Rationalisation of tax treatment of Recognised Provident Funds, Pension Funds and National Pension Scheme Under the existing provisions of the Income-tax Act, tax treatment for the National Pension System (NPS) referred to in section 80CCD is Exempt, Exempt and Tax (EET) i.e., the monthly/periodic contributions during the pension accumulation phase are allowed as deduction from income for tax purposes; the returns generated on these contributions during the accumulation phase are also exempt from tax; however, the terminal benefits on exit or superannuation, in the form of lump sum withdrawals, are taxable in the hands of the individual subscriber… Read more

Section 87A – Rs. 5000

#Budget 2016- Rationalization of limit of rebate in income-tax allowable under Section 87A The existing provisions of section 87A of Income-tax Act, provide for a rebate of an amount equal to hundred per cent of such income-tax or an amount of two thousand rupees, whichever is less, from the amount of income-tax to an individual resident in India whose total income does not exceed five hundred thousand rupees. With the objective to provide relief to resident individuals in the lower income slab, it is proposed to amend section 87A so as to increase the maximum amount of rebate available under… Read more