Budget -Direct Tax 2012-13 by pmishra88


									Highlights of key Direct Tax changes
presented by Hon’ble Finance Minister on
16th March 2016
Here is a look at the highlights of changes announced for Direct Taxes:

The following amendments were for Financial Year 2012-13,
Assessment Year 2013-14.

     Exemption limit for the general category of Individual Taxpayers
     proposed to be enhanced from Rs 1,80,000 to Rs 2,00,000.

     Therefore, For All Individual whether Male or Female who are in
     below age of 60yr the Basic Exemption Limit is
     Rs 2,00,000.

     Upper limit of 20% Tax slab proposed to be raised from
     Rs 8 lakh to Rs 10 lakh.

New Slab Rates for F.Y. 2012-13 (A.Y. 2013-2014)

Male/Female Below the Age of 60yrs

Income                   Tax Rate
Upto 2lakh                NIL
2lakh - 5lakh             10%
5lakh – 10lakh            20%
Above 10lakh              30%

By CA Sumit Mishra
Male/Female Above the Age of 60yrs.

Income                  Tax Rate
Upto 2.5lakh             NIL
2lakh - 5lakh            10%
5lakh – 10lakh           20%
Above 10lakh             30%

Male/Female Above the Age of 80yrs

Income                  Tax Rate
Upto 5lakh                NIL
5lakh – 10lakh           20%
Above 10lakh             30%

     Proposal to allow individual tax payers, a deduction of upto Rs
     10,000 for Interest from Savings Bank Accounts u/s 80TTA.

     Proposal to allow deduction of upto Rs 5,000 for preventive health
     check up.

     Senior citizens not having Income from Business proposed to be
     exempted from payment of advance tax.

     Turnover limit for compulsory Tax audit of account and
     presumptive taxation to be raised from Rs 60 lakhs to Rs 1 crore.

     Exemption from Capital Gains tax on sale of residential property,
     if sale consideration is used for subscription in equity of a
     manufacturing SME for purchase of new plant and machinery.

     Reduction in Securities Transaction Ta x (STT) by 20 per cent on
     Cash Delivery Transactions, which is reduced from 0.125% to

By CA Sumit Mishra
     Proposal to extend the levy of Alternate Minimum Tax (AMT) to
     All Persons, other than companies, claiming profit linked
     Deductions @ 18.5%


Presumptive Taxation not applicable to Profession, Income in nature of
Commission or Brokerage and Agency Business.

     Section 44AD of the Income-tax Act, shall not apply to—

(i) a person carrying on profession as referred to in sub-section (1) of
section 44AA;

(ii) a person earning income in the nature of commission or brokerage;

(iii) a person carrying on any agency business.”

     In Section 56 – Under the Definition of “Relatives” - in case of a
     Hindu undivided family, any member thereof.

     Where Company (Not being company in which public are
     substantially interested) receives any Consideration for issue of
     shares that exceeds the Face Value:

      1. Section 56 (Viib) - where a company, not being a company
     in which the public are substantially interested, receives, in any
     previous year, from any person being a resident, any consideration
     for issue of shares that exceeds the face value of such shares, the
     aggregate consideration received for such shares as exceeds the
     fair market value of the shares.

By CA Sumit Mishra
      2. The Said Clause is not applicable to Venture Capital

      Section 68- Unexplained Credit – Share Application Money
      received to be treated as Income:

1. Where Company (Not being company in which public are
substantially interested) and the sum so credited consists of share
application money, share capital, share premium or any such amount by
whatever name called, any explanation offered by
such assessee-company shall be deemed to be not satisfactory, unless—

(a) the person, being a resident in whose name such credit is recorded in
the books of such company also offers an explanation about the nature
and source of such sum so credited; and

(b) such explanation in the opinion of the Assessing Officer aforesaid
has been found to be satisfactory.

      Section 80-C – Deduction towards premium paid for life insurance
      policies issued on or after 1 April 2012, available only up to 10
      percent (20 percent for policies issued up to 31 March 2012) of the
      actual capital sum assured.
 Maturity proceeds from life insurance policies issued on or after 1 April 2012 exempt
only if premium does not exceed 10 percent (20 percent for policies issued up to 31
March 2012) of the actual capital sum assured.

      Section 80-D- Preventive Health Check-up of the parents
      additional deduction of Rs.5,000/- is allowable apart from
      Mediclaim premium.

By CA Sumit Mishra
     Section 80-G – For Donation more than Rs.10,000/- payment to be
     made by any mode other than Cash.

     Section 80-TTA - Deduction up to Rs.10,000 per annum towards
     interest on deposits (excluding time deposits) in a savings account
     with specified banks, co-operative societies and post offices, for
     Section 115BBE – Where Total Income Includes any Income
     referred to in sec 68, Sec 69, Sec 69A, Sec 69B, Sec 69C or Sec
     69D, then Income Tax payable shall be the aggregate of –

a) the amount of income-tax calculated on income referred to in section
68, section 69, section 69A, section 69B, section 69C or section 69D, at
the rate of thirty per cent.; and

(b) the amount of income-tax with which the assessee would have been
chargeable had his total income been reduced by the amount of income
referred to in clause (a).

     Section 115JB –
     a) Company who prepares P/L as per Part II of Sch VI
     b) Company to which section 211(2) is applicable, prepares its P/L
     as per Part II of Sch VI.

     Sec 115JBin Explanation 1, after clause (i),
  “(j) the amount standing in revaluation reserve relating to revalue
  asset on the retirement or disposal of such asset.

     In Chapter XII-BA of the Income-tax Act, in the heading, for the
     “PERSONS OTHER THAN A COMPANY” shall be substituted
     with effect from the 1st day of April, 2013:

     1. Sec 115JC shall be applicable to all persons other than Company
     where regular income tax payable is less than AMT (Alternate

By CA Sumit Mishra
     Minimum Tax) i.e 18.5%, Adjusted Total Income shall be deemed
     to be Total Income.

     2. Adjusted Total Income = Total Income + Deduction under
     Chapter VI –C (other than 80-P) + Deduction U/s 10AA.

     3. Above person shall obtain report from Accountant.

     4. The above provision will not apply to an Individual, HUF,
     AOP, BOI or an Artificial Judicial Person if the adjusted total
     income of such person does not exceed 20,00,000.

    5. Thus, Partnership Firm will have to pay Minimum Tax @18.5%.

     Section 143 - The processing of returns for issue of intimation
     would not be necessary if an assessment notice is issued. (To be in
     effect from 1st Day of July 2012).

     Section 156- From 1 July 2012, the Intimation issued U/s 143 (1)
     or after processing of TDS statement U/s 200A(1) would be
     deemed to be a Notice of Demand and can be subject to
     rectification or an appeal before the CIT(A).

     Section 194(J) – W.e.f 1st July 2012, Any amount payable to a
     director of a company, by way of remuneration or fees or
     commission, which is not in the nature of salary, shall be liable for
     tax deduction under Section 194(J) at the rate of 10%.

     Section 194LAA – TDS to be Deducted for Transfer/Sales of
     Immovable Property @ 1%.

By CA Sumit Mishra
     1. W.e.f 1st October 2012, Consideration payable to any resident of
     Rs.50 lakh or more in specified area and Rs 20 lakh or more in
     other area, towards acquisition of any immovable property (other
     than agricultural land) subject to withholding tax rate (TDS) at the
     rate of 1 percent. In case the consideration is less than the stamp
     duty valuation, then such stamp duty value to be considered for the
     purpose of withholding tax.

     2. The registering officer not to register the transfer of such
     immovable property, unless the transferee furnishes the proof of
     withholding tax and payment thereof.

     Section 206C (1D) –

     1. The TCS provisions widened to cover minerals such as coal,
     lignite, iron ore and bullion and jewellery (exceeding Rs 200,000)
     and TCS at rate of one percent to be collected by the seller from
     the buyer.
     2. However, NO TCS to be collected where a buyer in the retail
     sale of such goods purchased by him for personal Consumption.


By CA Sumit Mishra
     In his Union Budget 2012-13 speech finance minister Pranab
     Mukherjee said that the Goods and Services tax (GST) will be
     operational by August 2012.

     Service Tax increased from 10 to 12%
     eg.Works contracts rate: Increased from 4 to 4.8 percent.

     A proviso to Section 68(2) governing ‘reverse charge mechanism’
     inserted to provide that both the service provider and service
     receiver will be considered as persons liable to pay tax on notified
     taxable services and to the extent specified against each one of
     them. Initially this scheme is proposed to be made applicable (from
     a date to be notified after the enactment of the Finance Bill 2012)
     where the service provider is an individual, firm or LLP and the
     service recipient is a body corporate.

     Section 80 amended to provide for penalty waiver on Service tax
     payable on renting of immovable property as on 6 March 2012,
     subject to the condition that Service tax and interest are paid in full
     within a period of six months from the date of enactment of the
     Finance Bill.

By CA Sumit Mishra

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