- Unlisted Share Transfer: Inserted a new clause to provide that unlisted shares of company would be treated as short-term capital asset if it is held for a period of 24 months or less immediately preceding the date of its transfer.
- Eligible Start-up: As per Finance Bill, Section 80-IAC to provide 100 percent deduction for 3 assessment years to an ‘eligible Start-up’. The ‘eligible start-up’ is defined to mean a ‘company’ engaged in an eligible business. The Finance Bill, 2016 as passed by the Lok Sabha extends the definition of ‘eligible start-up’ to include ‘LLP’.
- Additional 10% tax of Dividends for tax payers receiving Dividend more than Rs.10 Lakhs: The aggregate amount of dividend (i.e., dividend paid or declared or distributed by one or more domestic companies) shall be considered for the limit of Rs.10 lakhs.
- TCS on motor vehicles purchase for value exceeding Rs.10 Lakhs: The tax shall be collected under Section 206C only at the time of receipt of consideration.
- Employers Contribution to EPF: Any contribution by employer in excess of 12% of salary to the recognized provident fund account of the employees shall be deemed as income of employee. The ceiling limit of Rs.1,50,000/- was there in the Finance Bill, 2016.
- Processing of return before scrutiny assessment: The Finance Bill, 2016 proposed mandatory processing of returns under Section 143(1) even when the scrutiny assessment notice is issued to the assessee. However, the finance bill as passed by the Lok Sabha provides that the processing of return is not necessary before the expiry of one year from the end of the financial year in which return is furnished, where a notice is issued for scrutiny assessment under Section 143(2).
- Benefit of 25% reduced tax rate extended to the companies engaged in research in relation to or distribution of article or thing manufactured or produced by it.
- Income Declaration Scheme: Income chargeable to tax is declared in the form of investment in any asset, the fair market value of such asset as on the date of commencement of this scheme shall be deemed to be the undisclosed income. The Finance Bill, 2016 as passed by the Lok Sabha provides that the cost of acquisition of such asset shall be deemed to be the fair market value taken into account for purposes of Income Declaration Scheme, 2016.
- Withdrawal of amendments related to retirement funds: The proposed amendment to tax withdrawal from EPF and Superannuation fund in the Finance Bill 2016, is withdrawn.
Karthik & Sunil 