Budget Highlights 2015

Budget Highlights Direct Taxes

Budget Highlights Indirect Taxes

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Disclaimer: These are a few of the Highlights of the Union Budget 2015. Expert advice
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India Union Budget 2015

 Income Tax rates remain the same for

individuals and corporates for the FY 201516. Corporate taxes are proposed to be
reduced from the existing rate of 30% to
25% over the next 4 years

Domestic Companies
Taxable Income

Non Corporate Assesses

Tax Rate

Assesses less than 60 years

FY 2015-16

Tax rate

0-250,000

Nil

250,001-500,000*

10%

500,001-1,000,000

20%

1,000,000+

30%

For senior citizen assesses 60 years or more

but less than 80 years
FY 2015-16

Tax rate

0-300,000

Nil

300,001-500,000*

10%

500,001-1,000,000

20%

1,000,000+

30%

FY
2014-15
30%

FY
2015-16
30%

Direct taxes

Corporate Assesses

Surcharge :
<10,000,000

>10,000,000 and
<100,000,000

5%

7%

>100,000,000

10%

12%

Foreign Companies
Taxable Income

FY
2014-15

FY
2015-16

Tax Rate

40%

40%

Surcharge :
<10,000,000

>10,000,000 and
<100,000,000

2%

2%

>100,000,000

5%

5%

Senior citizen assesses > 80 years

FY 2015-16

Tax rate

0-500,000

Nil

500,001-1,000,000

20%

1,000,000+

30%

Wealth tax
Abolish the levy of Wealth-tax with effect
from 2016-17 (Assessment Year)

Surcharge
Txbl Income

FY
2014-15

FY
2015-16

<10,000,000

>10,000,000

10%

12%

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The revenue loss on account of such

abolition is proposed to be compensated by
increase in the existing surcharge by 2% in
case of domestic companies and all non
corporate taxpayers.

India Union Budget 2015

Indirect taxes

Tax Rates

Budget 2015

Budget Highlights - Direct taxes

Key Changes in Income Tax

80C

Sukanya Samriddhi Scheme

Investments made by parent or
guardian

Nil

New

80D

Non senior citizen

Senior Citizen
Very Senior Citizen not eligible
for insurance

15000 Premium
20000 Premium
Nil

25000
30000
30000 ( Expenditure )

80DDB

Very Senior Citizens Specified

diseases * ( in the speech )

60000

80000

80DD

Maintenance, including medical

treatment of a dependant who is a
person with disability
Severe disability

50000

75000

100000

125000

50000
100000

75000
125000

80U

Person with disability

Severe disability

FY 2014-15
FY 2015-16
Rs 800 per month
Rs 1600 per month

80CCC

Contribution to a pension fund of

LIC or IRDA approved insurer

100000

150000

80CCD

Contribution by the employee to

National Pension Scheme (NPS)

100000

150000

Nil

100%

Deduction of upto Rs 50,000 over

and above the limit of Rs 1.50
lakh in respect of contributions
made to NPS
80G

Swachh Bharat Kosh

Clean Ganga Fund
National Fund for Control of
Drug Abuse

Tax deductions referred to in Budget

Deduction u/s 80C
Deduction u/s 80CCD
Interest onSelf Occupied property
80D Insurance premium
Transport allowance

1,50,000
50,000
2,00,000
25,000
19,200

Total

4,44,200

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India Union Budget 2015

Direct taxes

Applicability
Transport Allowance

Indirect taxes

Section

Budget 2015

Individuals

The term PoEM has been explained to mean a

place where key management and commercial
decisions that are necessary for the conduct of
the business of an entity as a whole are, in
substance made.
Value substantially from the assets in India
Section 9 (1)(i)(A) the term substantially from
the assets located in India would mean the
following:
1. Excess of Rs. 1 Crore and
2. Represents at least 50% of the value of
all the assets owned by the entity
Domestic Transfer Pricing
Section 92BA -increase the threshold limit for
applicability of transfer pricing regulations to
specified domestic transactions from Rs 5 crore
to Rs 20 crore
GAAR
Defer applicability of General Anti Avoidance
Rule (GAAR) by 2 years
2(15) of Income tax act
Yoga included as a specific category of
activity in the definition of charitable purpose
and also to provide relief for activities in the
nature of business undertaken by genuine
charitable organizations subject to the condition
that aggregate receipts from such activity is less
than 20% of the total receipts
Additional depreciation on P & M
Additional depreciation @ 20% is allowed on
new plant and machinery installed by a
manufacturing unit or a unit engaged in
generation and distribution of power.
If the asset is installed after 30th September of
the previous year only 10% of the additional
depreciation was allowed. Now the remaining
10% of the additional depreciation will be
allowed in the subsequent previous year.
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Tax Deduction at Source

Sec 194 C : Transport operators exemption
from TDS is only where the operator has 10 or
less than 10 goods carriages ( Pan to be
provided )
Sec 192 A : EPF Trustees while paying the
accumulated PF balance should deduct 10%
TDS ( for payments of Rs 30000 or more )
Sec 192 : The person responsible for making the
payment of salary has to obtain from the assesse
the evidence or proof or particulars of
prescribed claims (including claim for set-off of
loss).
Sec 194I : Payment of Rent to Real Estate
Investment Trust (REIT) is exempt from TDS
194LBA and LBB : TDS to be deducted at 10%
by the business trust/Investment Fund on
payments to its unit holders
Sec 195 : Details of international payments (
whether tax is applicable or not ) to be disclosed
in the return filed
Restrictions on Cash Transactions
Section 269SS and 269T of the Income-tax Act
- prohibit acceptance or re-payment of advance
in cash of Rs 20,000 or more for any transaction
in immovable property
Tax on Royalty and Technical Services
Sec 115A :Income of the non-resident by way
of Royalty or Fees for technical services - the
tax rate is reduced from 25% to 10%.
State of AP
Additional investment allowance (@15%) and
additional depreciation (@15%) to new
manufacturing units set-up during the period
01.04.2015 to 31.03.2020 in notified areas of
Andhra Pradesh and Telangana

India Union Budget 2015

Direct taxes

Sec 6 A Company is considered as resident in

India if its place of effective management
(POEM), at any time in that year, is in India

Indirect taxes

Residential Status

Budget 2015

Other Key Changes

80JJAA deduction
All manufacturing units are covered , shall be
available to a person deriving profits from
manufacture of goods in a factory and paying
wages to new regular workmen. The eligibility
threshold of minimum 100 workmen is reduced
to fifty
Minimum Alternate Tax

Budget 2015

Income from AOP and its corresponding

Expense is outside the ambit of MAT.
Also the amount of income and its
corresponding cost from transactions in
securities accruing or arising to an FII who has
invested in such securities in accordance with
the regulations made by SEBI
Administration

Direct taxes

Section 255 of the Income-tax Act - increase

the monetary limit from Rs 5 lakh to Rs 15 lakh,
for a case to be heard by a Single Member
Bench of the ITAT.
Requirement for TAN

Indirect taxes

An individual buying an immovable property

from a resident is required to deduct tax but is
not required to obtain TAN for depositing the
tax so deducted. The Same benefit of not
requiring TAN has been extended to an
individual or HUF purchasing an immovable
property from a non-resident
Trusts
Any trust or institution registered under sec
12 AA cannot claim exemption under
section 10 except under Sec 10 (23C).
Registration under sec 12AA is permissible
for claiming tax exemption for earlier years
also
Sec 12AA widened to give more power to
commissioner to cancel approval.

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India Union Budget 2015

Education Cess and Secondary & Higher

Education Cess leviable on excisable goods are
being subsumed in Basic Excise duty

An enabling provision to empower the Central

Government to impose a Swachh Bharat Cess
on all or certain taxable services at a rate of 2%
on the value of such taxable services. This Cess
will be effective from a date to be notified.

Consequently, Education Cess and Secondary

& Higher Education Cess leviable on excisable
goods are being fully exempted.

Graded increase in interest rates for delay

beyond 6 months from 24% & 30%. 18% upto
6 months

The standard ad valorem rate of Basic

Excise Duty is being increased from 12% to
12.5%

Registration to be done in 2 days

Customs Education Cesses will continue to be

levied on imported goods.

Withdrawals from negative list:

Compliance Facilitation:
Online Central Excise/Service Tax
Registration within two working days.
Time limit for taking CENVAT Credit on
inputs and input services is being increased
from six months to one year.
Central Excise/Service Tax assessees are
being allowed to issue digitally signed
invoices and maintain other records
electronically.

Exemptions withdrawn/restricted to

Exemption presently available on specified

services to the Government are restricted
further

Exemption to construction, erection,

commissioning or installation of original
works pertaining to an airport or port is
withdrawn

Exemption to services provided by a

performing artist in folk or classical art
form of music, or dance, or theatre is
limited only to such cases where amount
charged is up to Rs 1,00,000 for a
performance

Exemption to transportation of food stuff

by rail, or vessels or road is limited to food
grains including rice and pulses, flour, milk
and salt

Waiver of penalty if duty and interest is

paid within 30 days of the receipt of notice
and 15% penalty if paid after 30 days.
Section 11AC penalty without Mens Rea
shall be maximum 10% only
Clean Energy Cess
The Scheduled rate of Clean Energy Cess
levied on coal, lignite and peat is being
increased from Rs 100 per tonne to Rs 300
per tonne. The effective rate of Clean
Energy Cess is being increased from `100
per tonne to Rs 200 per tonne.

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Support Services provided by Government

or a Local Authority to a business entity
Access to Amusement Facilities.
Admission to Entertainment Events if fee
exceeds Rs. 500
Contract manufacturing /job work for
production of potable liquor for a
consideration
Betting, Gambling and Lottery

India Union Budget 2015

Budget 2015

Reduction in number of levies:

Rate increased from 12.36% to 14% with the

cess subsumed in the rate.

Direct taxes

Customs and Excise

Service Tax

Indirect taxes

Budget Highlights - Indirect taxes

Transportation of agricultural produce is

separately exempt, and this exemption
would continue

Sec 65B (23A) Chit Foreman commission

is to get covered by the definition for
Service[hereafter
this
cannot
be
Transaction in Money /Actionable Claim]

Reimbursements are taxable

Lottery
taxable

dealer/agents

commission

Reverse charge basis to be adopted by

AMC for services mutual fund agents,
mutual fund distributors and agents of
lottery distributor
Abatements
Uniform rate of 30% on services by Rail,
GTA Road and Vessel
60% on services by way of Air transport of
passengers by Business Class

is

Budget 2015

New Exemptions:
Service provided by way of exhibition of
movie by the exhibitor (theatre owner) to
the distributor or association of persons
consisting of such exhibitor as one of its
members

Direct taxes

Services by way of pre-conditioning, precooling, ripening, waxing, retail packing,

labelling of fruits and vegetables
Service provided by a Common Effluent
Treatment Plant operator for treatment of
effluent

Indirect taxes

Admission to a museum, zoo, national park,

wild life sanctuary, tiger reserve
Life insurance service provided by way of
Varishtha Pension Bima Yojna
Ambulance services
Goods Transport Agency concept is now
extended to Land Customs Station
Other Amendments
Differential amounts of Penalty for normal
and Fraud or collusion cases introduced
Manpower supply and security services
when provided by an individual, HUF or
partnership firm to a body corporate are to
be considered under full reverse charge

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India Union Budget 2015