India Budget Series

India Budget Series April 30, 2016

TAX INCENTIVES TO INTERNATIONAL FINANCIAL SERVICES CENTRE

In order to provide a fill-up to the growth of International Financial Services Centre, following proposals are made:- -Capital gains arising from transaction undertaken in foreign currency on recognised stock exchange located in the International Financial Services Centre (IFSC) shall be exempt from tax even when STT is not paid in respect of such transactions. […]

India Budget Series April 30, 2016

MODIFICATION OF CONDITIONS FOR OFF SHORE FUNDS

  In the above case, the investors invest in an offshore fund that is located outside India. The fund, in turn, appoints a consultant outside India. Further, consultant, in turn, from its office outside India, appoints a fund manager in India to take care of its Indian Portfolio. In this case, if the fund is […]

India Budget Series April 30, 2016

TAXATION OF BUY BACK OF SHARES

It is proposed to amend Section 115QA to provide for: -taxation of distributed income in case of buy back of shares by an unlisted company under any law relating to companies (currently it refers to only Companies Act 1956) and -providing clarity on the method of determination of consideration received by the company at the […]

India Budget Series April 30, 2016

AMORTISATION OF SPECTRUM FEE FOR PURCHASE OF SPECTRUM

Territory of India is not limited to land and sea but it includes air as well. There is a levy of Spectrum fee for auction of air waves. There are uncertainties in tax treatments in relation to payments in respect of Spectrum. In order to provide clarity and avoid any future litigation and controversy, it […]

India Budget Series April 30, 2016

TAXATION OF NON-COMPETE FEES AND EXCLUSIVITY RIGHTS IN CASE OF PROFESSION

Under the existing provisions of the Income Tax Act, there are provisions in relation to taxation of non-compete fees and exclusivity rights in relation to Business but there are no such provisions in relation to Profession. Thus, it is proposed to make the following considerations:- -Non-compete fees received/receivable, recurring in nature, in relation to not […]

India Budget Series April 30, 2016

EXTENSION OF SCOPE OF SECTION 43B

With a view to ensure the prompt payment of dues to Railways for use of the Railway assets, it is proposed to amend Section 43B so as to expand its scope to include payments made to Indian Railways for use of Railway assets. Thus, payments made to Indian Railways, for use of Railway assets, shall […]

India Budget Series April 30, 2016

RATIONALISATION OF SCOPE OF TAX INCENTIVE UNDER SECTION 32AC

The existing provision of Section 32AC(1A) provides for an investment allowance at the rate of 15% for purchase of new plant and machinery exceeding Rs.25 crores by a company engaged in manufacturing or production of any article provided that acquisition and installation of the said plant and machinery is done in the same previous year. […]

India Budget Series April 30, 2016

DEDUCTION IN RESPECT OF BAD AND DOUBTFUL DEBTS IN CASE OF NBFCS

The existing provisions of Section 36(1) (viia) allows for a deduction of maximum 5% of the Gross Total Income (before claiming deduction under this clause and chapter VI-A) in respect of provision for bad and doubtful debts for a Public Financial Institution, State Financial Corporation and State Industrial Investment Corporations. It is proposed to extend […]

India Budget Series April 30, 2016

INCREASE IN THRESHOLD LIMIT OF PRESUMPTIVE TAXATION SCHEME FOR PERSONS HAVING BUSINESS INCOME

The existing provision of Section 44AD states that eligible businesses having gross receipts not exceeding Rs.1 crore shall be presumed to have an income equal to 8% of the gross receipts. It is proposed to increase this limit for presumptive taxation from Rs.1 crore to Rs.2 crores. It is further proposed that expenditure in the […]

India Budget Series April 30, 2016

INCREASE IN THRESHOLD LIMIT FOR AUDIT OF PROFESSIONALS

The existing provision of Section 44AB provides for compulsory audit for professionals whose gross receipts exceed Rs.25 lakhs. It is proposed to amend the said Section and raise the audit limit from Rs.25 lakhs to Rs.50 lakhs. The increase in threshold for audit of businesses has not been increased from 100 lakhs to 200 lakhs […]

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