TAX PROPOSALS 2013 AT A GLANCE ON DIRECT TAX MANOJ KUMAR MITTAL & CO

TAX PROPOSALS TAX PROPOSALS 2013 AT A GLANCE2013 AT A GLANCE

ON DIRECT TAXON DIRECT TAX

MANOJ KUMAR MITTAL & CO.MANOJ KUMAR MITTAL & CO.


INDIVIDUAL (OTHER THAN SENIOR CITIZEN & senior most Citizen)

Including WOMAN & HUF, AOP, BOI- TAX SLAB –Same as in PY

UPTO 200000UPTO 200000NILNIL

ABOVE 2000000 TO 500000ABOVE 2000000 TO 500000 10%10%

ABOVE 500000 TO 1000000ABOVE 500000 TO 1000000 20%20%

ABOVE 1000000ABOVE 1000000 30%30%

MANOJ KUMAR MITTAL & CO.MANOJ KUMAR MITTAL & CO.MANOJ KUMAR MITTAL & CO.MANOJ KUMAR MITTAL & CO.

Senior Citizen from the age of 60 years to less than80 years

UPTO 2,50,000UPTO 2,50,000NILNIL

ABOVE 250000 TO 500000ABOVE 250000 TO 500000 10%10%

ABOVE 500000 TO 1000000ABOVE 500000 TO 1000000 20%20%

ABOVE 1000000ABOVE 1000000 30%30%

Senior Citizen of 80 years and above :TAX SLAB

UPTO 500000UPTO 500000NILNIL

ABOVE 500000 TO 1000000ABOVE 500000 TO 1000000 20%20%

ABOVE 1000000ABOVE 1000000 30%30%


SurchargeSurcharge

Surcharge of 10% in case of person Surcharge of 10% in case of person

(other than company) having (other than company) having total total incomeincome exceeding 1.00 crores exceeding 1.00 crores however subject to limit of amount however subject to limit of amount more than 1 crores rupees.more than 1 crores rupees.

In the case of In the case of domestic companies domestic companies having total income more than 1 having total income more than 1 crores but less than Rs. 10.00 crores, crores but less than Rs. 10.00 crores, surcharge @ 5% in case income surcharge @ 5% in case income exceeds 10.00 crores, surcharge @ exceeds 10.00 crores, surcharge @ 10% subject to marginal relief.10% subject to marginal relief.


In the case of In the case of companies other than companies other than domestic companiesdomestic companies having total having total income more than 1 crores but less income more than 1 crores but less than Rs. 10.00 crores, surcharge @ than Rs. 10.00 crores, surcharge @ 2%, in case income exceeds 10.00 2%, in case income exceeds 10.00 crores, surcharge @ 5%.crores, surcharge @ 5%.

Marginal relief will be available.Marginal relief will be available.


No change in Education & Secondary No change in Education & Secondary Higher Education Cess of 3%Higher Education Cess of 3%


Commodity Transaction Tax Commodity Transaction Tax (CTT)-Chapter VII of FA,2013(CTT)-Chapter VII of FA,2013

A new tax called CTT is levied on A new tax called CTT is levied on taxable taxable commodities transaction commodities transaction entered in a recognized entered in a recognized association association @0.01% payable by [email protected]% payable by seller.

Taxable Commodities transaction means a transaction Taxable Commodities transaction means a transaction of sale of commodity derivatives in respect of of sale of commodity derivatives in respect of commodity, other than agriculture produce, traded in a commodity, other than agriculture produce, traded in a recognized association.recognized association.

Procedural requirement relating to collection, filling of Procedural requirement relating to collection, filling of return, assessment procedure, chargeability of interest, return, assessment procedure, chargeability of interest, appeal is also provided.appeal is also provided.


Applicable from the date notifiedApplicable from the date notified

Deductible u/s 36 (xvi) if the income arising Deductible u/s 36 (xvi) if the income arising from such taxable commodity transaction is from such taxable commodity transaction is computable under profit from business or computable under profit from business or profession.profession.

Amendment in Section 36(xvi) w.e.f 01.04.2014.Amendment in Section 36(xvi) w.e.f 01.04.2014.


Taxation of income by way of royalty or fee Taxation of income by way of royalty or fee for technical servicefor technical service

Section 115A-Section 115A- The rate of tax has been increased The rate of tax has been increased

from 10% to 25% in respect of royalty from 10% to 25% in respect of royalty or FTS paid to non resident for the or FTS paid to non resident for the agreement entered on or after agreement entered on or after 01.06.2005.01.06.2005.

W.e.f.01.04.2014W.e.f.01.04.2014


Sec 32AC-Investment in P&MSec 32AC-Investment in P&M

If a company invest more than 100 crores in If a company invest more than 100 crores in new assets (being P&M) during the F.Y.2013-14 new assets (being P&M) during the F.Y.2013-14 and 2014-15, deduction of 15% of the aggregate and 2014-15, deduction of 15% of the aggregate amount of actual cost of new assets will be amount of actual cost of new assets will be allowed.allowed.

No transfer of such assets for next five years No transfer of such assets for next five years except for amalgamation or merger.except for amalgamation or merger.

W.e.f.01.04.2014W.e.f.01.04.2014


Sec 80IA(4)(iv)- Extension of sun Sec 80IA(4)(iv)- Extension of sun set date to power sectorset date to power sector

The deduction of profit under this is available to The deduction of profit under this is available to the undertaking engaged in generation or the undertaking engaged in generation or distribution of power or transmission or distribution of power or transmission or distribution by laying new lines or substantial distribution by laying new lines or substantial renovation or modernization in this area.renovation or modernization in this area.

This benefit is extended for A.Y.2014-15 also This benefit is extended for A.Y.2014-15 also


Section 87A- Rebate Section 87A- Rebate

An individual resident having total An individual resident having total income up to Rs. 5 lakh will be income up to Rs. 5 lakh will be allowed a rebate of Rs. 2000/- from allowed a rebate of Rs. 2000/- from income tax.income tax.


Sec 80EE- deduction in respect Sec 80EE- deduction in respect of interest on housing loanof interest on housing loan

If an assessee being individual first times takes a home loan, he will If an assessee being individual first times takes a home loan, he will be allowed deduction of Rs. 1.00 lacs on interest on loan taken from be allowed deduction of Rs. 1.00 lacs on interest on loan taken from financial institution for residential house property for A.Y.2014-15 financial institution for residential house property for A.Y.2014-15 and if the interest is less than 1.00 lacs then balance will be and if the interest is less than 1.00 lacs then balance will be allowed in A.Y.2015-16.allowed in A.Y.2015-16.

This deduction is subject to following condition:This deduction is subject to following condition: 1- The loan is from Financial Institution during 2013-14.1- The loan is from Financial Institution during 2013-14. 2-The amount of loan does not exceed Rs. 25.00 lacs.2-The amount of loan does not exceed Rs. 25.00 lacs. 3- The value of Residential house not to exceed Rs. 45 lacs3- The value of Residential house not to exceed Rs. 45 lacs 4- The assessee does not own any other residential house on the 4- The assessee does not own any other residential house on the

date of sanction of loan.date of sanction of loan. W.e.f. 01.04.2014W.e.f. 01.04.2014


Sec 10(10D) and 80C(3A)- Raising the limit of Sec 10(10D) and 80C(3A)- Raising the limit of premiumpremium

In case the person is suffering from disability u/s In case the person is suffering from disability u/s 80U or from diseases u/s 80DDB, then limit of 80U or from diseases u/s 80DDB, then limit of premium of the capital sum assured including premium of the capital sum assured including bonus has been increased from 10% to 15%.bonus has been increased from 10% to 15%.

W.e.f.01.04.2014W.e.f.01.04.2014


Sec-80D-MediclaimSec-80D-Mediclaim

The list of contribution to various The list of contribution to various organization for health of assessee or organization for health of assessee or his family has been extended to his family has been extended to various health scheme of the central various health scheme of the central government or state government as government or state government as may be notified.may be notified.

W.e.f 01.04.2014W.e.f 01.04.2014


80CCG- Investment in listed 80CCG- Investment in listed equity shares of a companyequity shares of a company

A resident individual who invest in listed equity shares A resident individual who invest in listed equity shares as per scheme notified by the govt is allowed a as per scheme notified by the govt is allowed a deduction of 50% of the amount invested subject to deduction of 50% of the amount invested subject to limit of allowability of Rs. 25000/-. This deduction is one limit of allowability of Rs. 25000/-. This deduction is one time deduction. This is available to new retail investors time deduction. This is available to new retail investors whose gross income does not exceed Rs. 10 lacs.whose gross income does not exceed Rs. 10 lacs.( RGESS)( RGESS)

The benefit under this has been extended for The benefit under this has been extended for three three consecutive yearsconsecutive years beginning from the year in which the beginning from the year in which the investment is made first time by new retail investor and investment is made first time by new retail investor and whose income does not whose income does not exceed Rs. 12 lacs.exceed Rs. 12 lacs.

W.e.f. 01.04.2014W.e.f. 01.04.2014


80G-Donation to National Children’s Fund80G-Donation to National Children’s Fund

Under Section 80G- A new clause (iiib) Under Section 80G- A new clause (iiib) has been inserted providing for 100% has been inserted providing for 100% deduction to contribution to National deduction to contribution to National Children’s fund.Children’s fund.

W.e.f. 01.04.2014W.e.f. 01.04.2014


115BBD- Dividend from specified foreign 115BBD- Dividend from specified foreign companycompany

The rate of taxation is 15% as The rate of taxation is 15% as provided by the finance Act 2012 and provided by the finance Act 2012 and it will continue for A.Y.2014-15.it will continue for A.Y.2014-15.


115O-Dividend Distribution Tax-removing of cascading 115O-Dividend Distribution Tax-removing of cascading effectseffects

Where tax on dividend received by a domestic Where tax on dividend received by a domestic company from a foreign subsidiary (in which the company from a foreign subsidiary (in which the domestic company holds more than 50% of domestic company holds more than 50% of equity share capital) is payable u/s 115BBD by equity share capital) is payable u/s 115BBD by the holding company, then any dividend the holding company, then any dividend distributed by the holding company, distributed by the holding company, in the same in the same year, to the extent of such dividends year, to the extent of such dividends shall not shall not be subject to DDT U/S 115O.be subject to DDT U/S 115O.

W.e.f.01.06.2013W.e.f.01.06.2013


194LC-Concessional rate of withholding tax-194LC-Concessional rate of withholding tax-Benefit extendedBenefit extended

It provides that if an Indian company borrows money in foreign It provides that if an Indian company borrows money in foreign currency from non resident, it will be subject to TDS @5%.currency from non resident, it will be subject to TDS @5%.

It is now provided that where a non resident deposits foreign It is now provided that where a non resident deposits foreign currency in designated bank account and such money as converted currency in designated bank account and such money as converted in Indian rupees is utilized for subscription to long term in Indian rupees is utilized for subscription to long term infrastructure bond issue of an Indian company, then borrowing for infrastructure bond issue of an Indian company, then borrowing for the purpose of this section shall be deemed to be in foreign the purpose of this section shall be deemed to be in foreign currency and interest on that shall be subject to 5% TDS.currency and interest on that shall be subject to 5% TDS.

W.e.f 01.06.2013 W.e.f 01.06.2013


Taxation of Securitisation trust-Chapter XII-Taxation of Securitisation trust-Chapter XII-EA, Sec 115TA to 115TDEA, Sec 115TA to 115TD

The income of it will be exempt u/s 10(23DA)The income of it will be exempt u/s 10(23DA) Additional tax on income distributed to Additional tax on income distributed to

individual or HUF @25%individual or HUF @25% In other case,30% on the income distributed.In other case,30% on the income distributed. No addition tax for person if income below No addition tax for person if income below

taxable limit.taxable limit. In hand of other investors, it shall be tax free.In hand of other investors, it shall be tax free. W.e.f 01.06.2013W.e.f 01.06.2013


Sec-98 of FA for securities Transaction Tax, Sec-98 of FA for securities Transaction Tax, w.e.f.01.06.2013w.e.f.01.06.2013

S.NO.

Nature of taxable securities transaction

Payable by Existing rateIn percent

Proposed rateIn percent

1 2 3 4 5

1 Delivery based purchase of units of an equity oriented fund entered into in a recognized stock exchange

Purchaser 0.1 Nil

2 Delivery based sale of units of an equity oriented fund entered into in a recognized stock exchange

Seller 0.1 0.001

3 Sale of futures in securities Seller 0.017 0.01

4 Sale of units of EOF to MF Seller 0.25 0.001


194-IA- TDS on transfer of certain 194-IA- TDS on transfer of certain immovable propertyimmovable property

It is proposed to provide tds @1% by It is proposed to provide tds @1% by purchaser if the value of property purchaser if the value of property exceeds Rs. 50.00 lacs.exceeds Rs. 50.00 lacs.

W.e.f.01.06.2013W.e.f.01.06.2013


Chapter XII-DA-DDT on buy back of unlisted Chapter XII-DA-DDT on buy back of unlisted shares of a company Sec-115QA to 115QCshares of a company Sec-115QA to 115QC

If a company buy back its own unlisted shares at a If a company buy back its own unlisted shares at a consideration which is more than the amount received consideration which is more than the amount received by the company at the time of issue of shares, then by the company at the time of issue of shares, then company will deduct DDT @20% of the distributed company will deduct DDT @20% of the distributed income to the shareholders.income to the shareholders.

The income received by the shareholders is exempt The income received by the shareholders is exempt from tax in the hand of shareholders.from tax in the hand of shareholders.

w.e.f.01.06.2013w.e.f.01.06.2013


Sec-43CA- Computation of income on transfer of Sec-43CA- Computation of income on transfer of immovable property held as stock in tradeimmovable property held as stock in trade

Where there is a transfer of an assets(other than capital Where there is a transfer of an assets(other than capital assets) being land or building assets) being land or building held as stock in trade held as stock in trade and and consideration is less than stamp duty value, then consideration is less than stamp duty value, then consideration shall be taken as stamp duty value ( 50C consideration shall be taken as stamp duty value ( 50C brought in case of stock in trade).brought in case of stock in trade).

Where there is a difference between date of transfer of Where there is a difference between date of transfer of an agreement and date of registration of transfer. The an agreement and date of registration of transfer. The SDV shall be taken of the date of transfer of an SDV shall be taken of the date of transfer of an agreement where the consideration or part thereof has agreement where the consideration or part thereof has been received on or before the date of agreement other been received on or before the date of agreement other than in cash.than in cash.

w.e.f 01.04.2014w.e.f 01.04.2014


Sec 56(2)(vii)-taxability of immovable property Sec 56(2)(vii)-taxability of immovable property received for inadequate considerationreceived for inadequate consideration

Where an individual or HUF purchases an immovable Where an individual or HUF purchases an immovable property for a consideration which is less than SDV, then property for a consideration which is less than SDV, then difference will be assessed as income from other difference will be assessed as income from other

sourcesource.. Where there is a difference between date of transfer of Where there is a difference between date of transfer of

an agreement and date of registration of transfer. The an agreement and date of registration of transfer. The SDV shall be taken of the date of transfer of an SDV shall be taken of the date of transfer of an agreement where the consideration or part thereof has agreement where the consideration or part thereof has been received on or before the date of agreement other been received on or before the date of agreement other than in cash.than in cash.

w.e.f 01.04.2014w.e.f 01.04.2014


Chapter X-A- Section 144BAChapter X-A- Section 144BA

GAAR will come effect from GAAR will come effect from 01.04.2016.01.04.2016.


Sec 115R- Rationalization of tax on distributed income by Sec 115R- Rationalization of tax on distributed income by mutual fund, w.e.f.01.06.2013mutual fund, w.e.f.01.06.2013

S.no.

Particulars Existing rate of DDT in percnet

Proposed rate of DDT in percent

1 Distribution of income by a fund other than equity oriented fund to an individual or HUF

12.5 or 25 depending upon nature of fund

25

2 In case of infrastructure debt fund set up by NBFC, on distribution of income to non resident as on payment of interest in case of loan from NR is 5%

12.5 or 25 depending upon nature of fund

5


Sec-2(14)-Change in the defination of capital Sec-2(14)-Change in the defination of capital assetsassets The Section 2(14)(iii)(b) has been amended to provide that the land The Section 2(14)(iii)(b) has been amended to provide that the land

situated in any area within the distance, measured aerially(shortest situated in any area within the distance, measured aerially(shortest aerial distance),aerial distance),

I) not being more than two kilometers, from the local limits of any I) not being more than two kilometers, from the local limits of any municipality or cantonment board referred to in item(a) and which municipality or cantonment board referred to in item(a) and which has a population of more then ten thousand but not exceeding one has a population of more then ten thousand but not exceeding one lakh orlakh or

II) not being more than 6 kilometers from the local limits of any II) not being more than 6 kilometers from the local limits of any municipality or cantonment board referred to in item a and which municipality or cantonment board referred to in item a and which has a population of more than 1 lakh but not exceeding 10 lakh or has a population of more than 1 lakh but not exceeding 10 lakh or

III) not being more than 8 kilometers from the local limits of any III) not being more than 8 kilometers from the local limits of any municipality or cantonment board referred to in item (a) and which municipality or cantonment board referred to in item (a) and which has a population more than 10 lakh has a population more than 10 lakh

Shall form part of capital assetsShall form part of capital assets W.e.f 01.04.2014W.e.f 01.04.2014


Sec 10(10D)-Taxability of key Sec 10(10D)-Taxability of key man insurance policiesman insurance policies

This section provides that if any amount is received from life This section provides that if any amount is received from life insurance policy, it is exempt from tax except key man insurance insurance policy, it is exempt from tax except key man insurance policy.policy.

Generally, the key man insurance policy is assigned to the person Generally, the key man insurance policy is assigned to the person before his maturity and he pays certain premium and claims tax before his maturity and he pays certain premium and claims tax exemption on the ground that it is not a key man insurance policy. exemption on the ground that it is not a key man insurance policy. It is so held by courts also.It is so held by courts also.

To club this loopholes, it is provided that a keyman insurance policy To club this loopholes, it is provided that a keyman insurance policy which has been assigned to any person during his term with or which has been assigned to any person during his term with or without consideration, it shall continue to be treated as a Keyman without consideration, it shall continue to be treated as a Keyman Insurance Policy.Insurance Policy.

W.e.f. 01.04.2014 W.e.f. 01.04.2014


Sec 80GGB and 80GGC-Contribution to political Sec 80GGB and 80GGC-Contribution to political party or electoral trustparty or electoral trust

The contribution made in cash will be The contribution made in cash will be disallowed disallowed

W.e.f. 01.04.2014W.e.f. 01.04.2014


Sec 179 and 167C- Meaning of Sec 179 and 167C- Meaning of Tax DueTax Due

Tax due means for the purpose of this Tax due means for the purpose of this definition is tax due includes penalty, definition is tax due includes penalty, interest or any other sum payable interest or any other sum payable under the act.under the act.

w.e.f.01.06.2013w.e.f.01.06.2013


80JJAA- Deduction for additional 80JJAA- Deduction for additional wageswages

This section provides for deduction of an This section provides for deduction of an amount equal to 30% of the additional wages amount equal to 30% of the additional wages paid to the new regular workman employed in paid to the new regular workman employed in industrial undertaking engaged in production or industrial undertaking engaged in production or article or things.article or things.

Now it is changed that it will be provided to Now it is changed that it will be provided to Indian company engaged in manufacture of Indian company engaged in manufacture of goods in factory.goods in factory.

W.e.f. 01.04.2014W.e.f. 01.04.2014


Sec 90 & 90A-Tax Residency certificateSec 90 & 90A-Tax Residency certificate

It is clarifactory in nature providing that It is clarifactory in nature providing that submission of tax residency certificate is submission of tax residency certificate is necessary but not an essential condition for necessary but not an essential condition for claiming benefits under the DTAA.claiming benefits under the DTAA.

W.e.f.01.04.2013W.e.f.01.04.2013


Sec 132B- Application of seized Sec 132B- Application of seized assetsassets

The section provides for adjustment of seized The section provides for adjustment of seized assets under section 132B against assets under section 132B against existing existing liability liability under income tax Act, Wealth tax act under income tax Act, Wealth tax act and interest tax act etc.and interest tax act etc.

The The existing liabilityexisting liability is clarified to include all is clarified to include all outstanding tax/interest/penalty and not outstanding tax/interest/penalty and not advance tax liability only.advance tax liability only.

w.e.f.01.06.2013w.e.f.01.06.2013


Sec 139(9)-Extending the scope of defective Sec 139(9)-Extending the scope of defective returnreturn

The scope of defective return has The scope of defective return has been enhanced to include the return been enhanced to include the return where tax together with interest is not where tax together with interest is not paid u/s 140A along with return.paid u/s 140A along with return.

W.e.f. 01.06.2013W.e.f. 01.06.2013


Sec 142(2A)-Direction for special auditSec 142(2A)-Direction for special audit

The section provides power to AO to give direction of audit having The section provides power to AO to give direction of audit having regard to the regard to the nature and complexity of accounts and interest of nature and complexity of accounts and interest of revenuerevenue..

The list of causes for audit has been expanded to includeThe list of causes for audit has been expanded to include– Nature and complexity of accountsNature and complexity of accounts– Volume of accountsVolume of accounts– Doubts about the correctness of accountsDoubts about the correctness of accounts– Multicipility of transaction in accountsMulticipility of transaction in accounts– Specialized nature of business activity of assesseeSpecialized nature of business activity of assessee– Interest of revenueInterest of revenue

– W.E.F. 01.06.2013W.E.F. 01.06.2013

MANOJ KUMAR MITTAL MANOJ KUMAR MITTAL & CO.& CO.

Sec 271FA- Penalty for non filling of Annual information Sec 271FA- Penalty for non filling of Annual information returnreturn

If a person fails to furnish AIR within the time prescribed If a person fails to furnish AIR within the time prescribed under that section then AO under that section then AO maymay direct the assessee to direct the assessee to pay penalty at Rs. 100 per day for the default continues.pay penalty at Rs. 100 per day for the default continues.

It is provided further, that if the return is not filed within It is provided further, that if the return is not filed within the period prescribed in notice u/s 285BA(5), then the period prescribed in notice u/s 285BA(5), then assessee assessee shallshall pay penalty under section 271FA @ 500 pay penalty under section 271FA @ 500 per day from day immediately following the day on per day from day immediately following the day on which the time specified in such notice for furnishing the which the time specified in such notice for furnishing the return expires.return expires.

W.e.f 01.04.2014W.e.f 01.04.2014

MANOJ KUMAR MITTAL & COMANOJ KUMAR MITTAL & CO..

Sec 14A and 14B- Annexure less Sec 14A and 14B- Annexure less return under wealth Tax Actreturn under wealth Tax Act

The amendments is provided to The amendments is provided to enable filling e wealth tax return enable filling e wealth tax return without annexure.without annexure.

W.e.f. 01.04.2013W.e.f. 01.04.2013


THANKSTHANKS From Manoj Kumar Mittal & Co.From Manoj Kumar Mittal & Co. Chartered AccountantsChartered Accountants 305, Dakha Chamber, 2068/38305, Dakha Chamber, 2068/38 Nai Wala. Karol Bagh, New Delhi-110005Nai Wala. Karol Bagh, New Delhi-110005 Ph: 011-28756284, 41557022, 9810764620Ph: 011-28756284, 41557022, 9810764620


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TAX PROPOSALS 2013 AT A GLANCE ON DIRECT TAX MANOJ KUMAR MITTAL & CO