I. Foreign Direct Investment (FDI) through Automatic route.

• 49% in Insurance and Pension Sectors
• 100% in Asset Reconstruction Companies

II. 100% FDI will be allowed through FIPB route in marketing of food products produced and manufactured in India

III. Investment limit for foreign entities in Indian stock exchanges will be enhanced from 5 to 15% on par with domestic institutions

IV. The existing 24% limit for investment by FPIs in Central Public Sector Enterprises, other than Banks, listed in stock exchanges, will be increased to 49% to obviate the need for prior approval of Government for increasing the FPI investment.

Withdrawal up to 40% of the corpus at the time of retirement to be tax exempt in the case of National Pension Scheme (NPS).

Annuity fund which goes to legal heir will not be taxable.

In case of superannuation funds and recognized provident funds, including EPF, the same norm of 40% of corpus to be tax free will apply in respect of corpus created out of contributions made on or from 1.4.2016.

Limit for contribution of employer in recognized Provident and Superannuation Fund of ` 1.5 lakh per annum for taking tax benefit.

Exemption from service tax for Annuity services provided by NPS and Services provided by EPFO to employees.

Reduce service tax on Single premium Annuity (Insurance) Policies from 3.5% to 1.4% of the premium paid in certain cases.

Corporate Tax rate proposals:

1. New manufacturing companies incorporated on or after 1.3.2016 to be given an option to be taxed at 25% + surcharge and cess provided they do not claim profit linked or investment linked deductions and do not avail of investment allowance and accelerated depreciation.

2.  Lower the corporate tax rate for the next financial year for relatively small enterprises i.e companies with turnover not exceeding ` 5 crore (in the financial year ending March 2015), to 29% plus surcharge and cess.

3. 100% deduction of profits for 3 out of 5 years for startups setup during April, 2016 to March, 2019. MAT will apply in such cases.

4. 10% rate of tax on income from worldwide exploitation of patents developed and registered in India by a resident.

5. Complete pass through of income-tax to securitization trusts including trusts of ARCs. Securitisation trusts required to deduct tax at source.

6.Period for getting benefit of long term capital gain regime in case of unlisted companies is proposed to be reduced from three to two years.

7. Non-banking financial companies shall be eligible for deduction to the extent of 5% of its income in respect of provision for bad and doubtful debts.

8. Determination of residency of foreign company on the basis of Place of Effective Management (POEM) is proposed to be deferred by one year.

9. Commitment to implement General Anti Avoidance Rules (GAAR) from 1.4.2017.

10. Exemption of service tax on services provided under Deen Dayal Upadhyay Grameen Kaushalya Yojana and services provided by Assessing Bodies empanelled by Ministry of Skill Development & Entrepreneurship.

11. Exemption of Service tax on general insurance services provided under ‘Niramaya’ Health Insurance Scheme launched by National Trust for the Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disability.

12. Basic custom and excise duty on refrigerated containers reduced to 5% and 6%.

Accelerated depreciation wherever provided in IT Act will be limited to maximum 40% from 1.4.2017

Benefit of deductions for Research would be limited to 150% from 1.4.2017 and 100% from 1.4.2020

Benefit of section 10AA to new SEZ units will be available to those units which commence activity before 31.3.2020.

The weighted deduction under section 35CCD for skill development will continue up to 1.4.2020

 

1. 40% of withdrawal at the time of retirement under National Pension Scheme to be tax exempt.
2. Fiscal deficit at 3.5% of GDP in 2016-17.
3. Rs. 25,000 crore for recapitalisation of public sector banks. General insurance companies owned by the govt to be listed in stock exchanges.
4. Small shops should be given the choice to remain open on all 7 days a week.
5. Hub to support SC/ST entrpreneurs.
6. LPG connection for women members of rural homes.
7. Infrastructure and agriculture cess to be levied.

1. New cess introduced for Petrol & Diesel Cars
2. Income Tax surcharge increased to 15% from 12% for those having income above a crore

1 Cenvat Credit Rules Amended

2. TDS provisions rationalized

3. TDS on NRI on non furnishing PAN – 20% rate will not apply on furnishing certain documents

1. Duty on Tobacco to be increased by 10-15%
2.  Limited Period Compliance Window for undisclosed income/assets – 30% Tax, Surcharge 7.5% and penalty 7.50% . The period will be 01-06-2016 to 30-09-2016, with time to pay within 2 months.
3. New dispute resolutions scheme – Dispute up to Rs.10 Lakhs without paying penalty and if disputed amount Rs.10 Lakhs, 25% penalty. For penalty related appeals can be settled by paying 25% on minimum imposable penalty
4. Penalty provisions amended

1. First Home buyers additional Rs.50,000/-interest allowance – Loan amount should be Rs.35L and House cost should be Rs.50L
2. Dividend Distribution Tax: Tax @ 10% on dividend if total dividend received Rs.10 Lakhs
3. Tax Collected At source – For motor cars if value exceed Rs.10 L
4. New Cess @ 0.5% Krishi Kalyan Cess w.e.f. 01-06-2016