Government proposed following 21 Major Changes in the Budget 2016-17
1. Registration of Companies should be given in one day – Companies Act proposed to be amended.
2. Relief under Section 87A proposed to be increased from Rs. 2,000 to Rs. 5,000
3. Deduction under Section 80GG for individuals paying rent but not receiving HRA proposed to be increased from Rs. 24,000 to Rs. 60,000.
4. FM increases the turnover limit of presumptive taxation Scheme to 2 crores.
5. Presumptive taxation scheme introduced for all professionals with receipts up to Rs. 50 lakhs.
6. Reduction in corporate tax – New manufacturing companies after March 1, 2016 have to pay tax at 25%.
7. Corporate tax reduced to 29% for small business having turnover less than 5 crores.
8. Sec. 80JJAA deduction extended from only manufacturing units to all assessees who are subject to tax audit.
9. Capital gain exemption proposed for investment in start-up.
10. POEM proposed to be deferred by 1 year.
11. FM has proposed to provide tax exemption on withdrawal of 40% from national pension Scheme at the time of retirement.
12. Krishi Kalyan Cess 0.5%to be levied on all taxable services.
13. Additional exemption of Rs. 50,000 for housing loans up to Rs. 35 lakh, provided cost of house is not above Rs. 50 lakh.
14. Surcharge raised from 12 to 15% on incomes above 1 Crore.
15. FM proposed to introduce limited period compliance window for domestic taxpayer to declare domestic black Money. Tax rate around 30% with interest and penalty capped at 7.5%. More details to follow.
16. FM has announced introduction of one time dispute resolution Scheme for cases already pending due to retro-amendment
17. A new dispute resolution scheme is introduced, no penalty upto disputed amount of 10 lacs.
18. Penalty u/s 271(1)(c) to be rationalised. Penalty of 50% to 200% of tax sought to be evaded.
19. FM proposes to amend Section 14A; disallowance under Sec. 14A should not increase the actual expenditure.
20. No higher withholding tax if non-resident does not have PAN but furnishes an alternative document.
21. Interest @ 9% on refunds if tax effect not given in 90 days and concerned ITO to be held accountable.
Theses are the 21 Major Changes Proposed in the Budget 2016-17 …