Overview of union budget 2015

2015 UNION BUDGET2015 UNION BUDGET

R. Venkatakrishnan & Associates

Overview of Budget 2015

RVK Associates Location – Chennai, Bangalore, Hyderabad, Salem & Devanahalli

Economic Highlights

GDP growth in 2015-16 projected 8 to 8.5%

Real GDP growth to be 7.4%

Monetary policy framework with RBI

MUDRA Bank to finance small & Medium entrepreneurs

GAAR implementation deferred – to apply prospectively on or after 1.4.2017

Jan dhan, Aadhar and Mobile (JAM) for direct benefit transfer














Economic Highlights… cont’d

Move to amend the RBI act this year and provide monetary policy committee.

To allow foreign investment in alternative investment funds

To establish an autonomous bank board bureau to improve management of publicsector banks

To launch national skills mission soon to enhance employability in rural youth

Plans to revamp direct tax regime to make it internationally competitive with ratecuts and sans exemption












Economic Highlights… cont’d

Tax-free infrastructure bonds for projects in roads, rail and irrigation projects

Employees PF contributions to be made optional. However employer’s contribution tothe PF to continue

To do away with different types of foreign investment and replace them withcomposite caps

Govt to make Indian Gold Coins to reduce demand of foreign coins










Direct Tax Proposals


General Provisions Direct Tax Code is not going to be implemented as most of the aspects are covered n the current

Income Tax act itself

Benami Transactions (Prohibition) Bill to be introduced later.

Wealth tax abolished (for all types of assessees)

PAN to be made mandatory for purchase of immovable property above Rs.1 lakh. Advance orreturn of advance by cash above Rs.20,000 for purchase of immovable property prohibited.

Carrying on Yoga activity is included as an object of general public utility for charitablepurposes.

Ceiling on receipts from trading activities to be 20% of total receipts instead of Rs.25 lakhs forcharitable organizations

Direct Tax Code is not going to be implemented as most of the aspects are covered n the currentIncome Tax act itself






Direct Tax Code is not going to be implemented as most of the aspects are covered n the currentIncome Tax act itself







Individuals, HUF… Tax

No change in rate of personal tax slabs. Surcharge increased to 12% in caseincome exceeds Rs.1 Crore. 3% Cess to continue.

Health insurance premium (80D) increased from Rs.15000 to Rs.25000 , for seniorcitizens it is increased from Rs.20000 to Rs.30000

Seniors citizens above the age of 80 yrs who are not / could not be covered byhealth insurance be allowed a deduction of Rs.30000 towards medicalexpenditures. (80D)

Transport allowance increased from Rs.800 to 1600 per month

Additional deduction of Rs.25000/- for differently abled persons.












Individuals, HUF Tax… cont’d

Contribution to pension fund and new pension scheme increased from Rs.1 lakhs toRs.1.5 lakhs

Non disclosure / Evasion of tax in relation to foreign assets to have punishment ofrigorous Imprisonment upto 10 yrs , penalty 300% & non-compoundable offence.

Non-filing of returns/filing of returns with inadequate disclosure – 7 yrsimprisonment.

Voluntary Disclosure Scheme expected in 3 months time for disclosure of foreignAssets

100% tax deduction for donation to clean ganga Yojan and Swatch Bharath Yogan(for all assessees)












Corporate Tax

Rate of corporate tax rate to be reduced from 30% to 25% over next 4 years.

Provision to tackle splitting of reportable transactions

Additional investment allowance (15%) & Additional Depreciation (35%) for newunits in AP& Telengana

Rate of Income tax on Royalty & fees for technical services paid to non residentsreduced to 10% from 25%










Corporate Tax… cont’d

Domestic Transfer pricing limit increased to Rs.20 Cr from 5 Cr

Confidence is given that no retrospective taxation as far as possible

Donation to NFCDA to be eligible for 100% deduction u/s 80G

Mere presence of Fund Manager of Offshore Funds shall not constitute ofPermanent Establishment

Domestic Transfer pricing limit increased to Rs.20 Cr from 5 Cr

Confidence is given that no retrospective taxation as far as possible

Donation to NFCDA to be eligible for 100% deduction u/s 80G

Mere presence of Fund Manager of Offshore Funds shall not constitute ofPermanent Establishment


Indirect Tax Proposals


Goods & Service Tax (GST)

As promised, GST to come into effect from 01.04.2016As promised, GST to come into effect from 01.04.2016


Service Tax

Service Tax Rates Increased to 14% from 12.36% (No more Education Cess & SHECess)

Enabling provision to levy Swachh Bharat Cess at 2% of the value of taxableservice is empowered

Time limit for taking CENVAT Credit on inputs and input services is being increasedfrom six months to one year

Service Tax to be levied on service by way of admission to entertainment event ofconcerts, non-recognized sporting events, pageants, music concerts, award functions,if the amount charged is more than Rs 500 for right to admission to such an event










Service Tax… cont’d

Support Services provided by the Government or local authority to a business entitywill be taxable now

Service tax on Services provided by amusement facilities, water parks etc is removedfrom Negative List. These services will be taxable now

Uniform abatement for transport of Goods by Rail, Road & Vessel. Servicetax shallbe payable on 30% wherein CENVAT Credit on Inputs, Capital Goods and Serviceswill not be available (w.e.f 1.4.15)

Transportation of agricultural produce to remain exempt from Service-tax











Service tax under Reverse Charge Mechanism (RCM) for supply of Manpower to betaxed at 100% instead of 75%

Provision for issuing digitally signed invoices are being added along with the optionof presentation of records in electronic form.

Due to increase in ST Rate from 12.36% to 14%, ST on air travel agent, insuranceservice and service provided by lottery distributor and selling agent will increaseproportionately

RCM is applicable on Service tax on Mutual fund agents and lottery distributors

Abatement on Service tax on Air travel other than economy class will be reducedfrom 60% to 40% (w.e.f 1.4.15)













As per the Negative list, ST is not levied on any process amounting to manufactureor production of goods. However, now Service Tax will be levied on contractmanufacturing/job work for production of potable liquor for a consideration.

Condition of availing CENVAT Credit on RCM only after making payment to theservice provider is deleted. Accordingly, CENVAT Credit can be claimed on accrualbasis.

Service-tax exemption to construction, erection, commissioning or installation oforiginal works pertaining to an airport or port withdrawn

Penalty provisions under Section 73 & Section 76 & Section 78 has been amendedto bring in more clarity










Excise Duty Online Central Excise/Service Tax Registration within two working days

Ad Valorem Duty of Excise Increased to 12.50% from 12% (Education Cess & SHE Cessis no more applicable)

Excise duty on leather footwear, of Retail Sale Price of more than Rs.1000 per pair isbeing reduced from 12% to 6%.

Duty of Excise on Mineral water and aerated waters, containing sugar or othersweetening matter or flavoured increased form 12% to 18%

Duty of excise on cigarettes is being increased by 25% for cigarettes of length notexceeding 65 mm and by 15% for cigarettes of other lengths. Increase in duty rates isalso proposed on cigars, cheroots and cigarillos

Online Central Excise/Service Tax Registration within two working days





Online Central Excise/Service Tax Registration within two working days






Excise Duty… cont’d Excise duty on cut tobacco is being increased from Rs 60 per kg to Rs 70 per kg

Additional Duty of Excise (commonly known as Road Cess) levied on Petrol and HighSpeed Diesel Oil is being increased from Rs 2 per litre to Rs 8 per litre

Excise duty on wafers for manufacture of integrated circuit (IC) modules for smart cardsis being reduced from 12% to 6%,

Excise duty structure for mobiles phones is being changed from 1% without CENVATcredit or 6% with credit to 1% without credit or 12.5% with credit

Excise duty on Tablet Computers 2% without CENVAT credit or 12.5% with credit

Artificial heart exempt from basic custom duty of 5% and CVD.

Excise duty on cut tobacco is being increased from Rs 60 per kg to Rs 70 per kg






Excise duty on cut tobacco is being increased from Rs 60 per kg to Rs 70 per kg







Excise Duty… cont’d Excise duty structure of NIL without CENVAT credit or 12.5% with credit is being

prescribed for solar water heater and system

Excise duty on sacks and bags of polymers of ethylene, other than for industrial use, isbeing increased to 15%.

Inputs for use in the manufacture of LED drivers and MCPCB for LED lights, fixtures andLED lamps from 12% to 6%

Concessional customs and excise duty rates on specified parts of Electrically OperatedVehicles and Hybrid Vehicles, presently available upto 31.03.2015, is being extendedupto 31.03.2016

Excise duty on chassis for ambulances is being reduced from 24% to 12.5%

Excise duty structure of NIL without CENVAT credit or 12.5% with credit is beingprescribed for solar water heater and system





Excise duty structure of NIL without CENVAT credit or 12.5% with credit is beingprescribed for solar water heater and system






Customs Duty

With the change in excise rates, the effective customs duty would increase from28.85% to 29.44% from 1.3.2015

Motor vehicle for transport of ten or more person including vehicle for transportgoods, including driver increased from 10% to 20%

The tariff rate of basic customs duty on goods that is iron and steel and articles ofiron or steel, is being increased from 10% to 15%

The tariff rate of Basic Customs Duty on Commercial Vehicles is being increasedfrom 10% to 40%










Customs Duty… cont’d

Basic Customs Duty and CVD is being fully exempted on artificial heart (leftventricular assist device)

Improving the quality of life and public health through Swachh Bharat Initiatives.

The Schedule rate of Clean Energy Cess levied on coal, lignite and peat is beingincreased from Rs. 100 per tonne to Rs. 300 per tonne. The effect rate of CleanEnergy Cess is being increased from Rs. 100/- tonne to 200/tonne

Basic Customs Duty and CVD is being fully exempted on artificial heart (leftventricular assist device)

Improving the quality of life and public health through Swachh Bharat Initiatives.

The Schedule rate of Clean Energy Cess levied on coal, lignite and peat is beingincreased from Rs. 100 per tonne to Rs. 300 per tonne. The effect rate of CleanEnergy Cess is being increased from Rs. 100/- tonne to 200/tonne


Other Laws


Prevention of Money Laundering Act

Definition of “proceeds of crime” to include property taken or held outside India

Limit specified under Part B for Scheduled offences increased from Rs.30 lakhs ormore to Rs.100 lakhs or more

False declaration, false documents, etc. under section 132 of Customs Act, 1962have been included as Part B of Scheduled offence








Contact UsChennai

+ 91 44 24618778 [email protected]

Bangalore

+9 1 80 23418753 [email protected]

Hyderabad

+91 40 66620039 [email protected]

Salem


Devanahallai


Contact UsChennai

+ 91 44 24618778 [email protected]

Bangalore


Hyderabad


Salem


Devanahallai


http://www.rvkassociates.com

Disclaimer

This information contained herein is of general nature and is not an exhaustive analysis ofthe topics covered. Further, contents of this document are subject to approval of FinanceBill by the Parliament and its assent by the President of India.

This document is prepared only as guiding tool reflecting highlights of Union Budget2015. While every care has been taken in the preparation of this document, it maycontain inadvertent errors for which we shall not be held responsible. No one should act onsuch information without appropriate professional advice. We accept no responsibility forloss arising from any action taken or not taken by anyone using this material andinformation.






Overview of union budget 2015

Economy & Finance

Transcript of Overview of union budget 2015