The document summarizes key tax proposals in India's budget, including: 1) Increasing basic income tax exemption limits and deductions for investments, housing loans, and pension plans. 2) Raising long-term capital gains tax rates for mutual funds other than equity funds. 3) Clarifying real estate investment deductions only apply to one residential property in India. 4) Expanding transfer pricing provisions and certain service tax exemptions.

1. Budget
GANERIWALA & CO.

2. Table of Contents
A
• Non Corporate Tax proposals……………………… 3 & 4
• Capital Gains proposals…………………………………… 5
B
• Corporate Tax proposals………………………………….. 6
• TDS provisions…………………………………………………. 7
• Transfer pricing provisions……………………………….. 8
C
• Service Tax Provisions……………………………………… 9

3. Key Direct Tax Proposals:
› Basic Exemption limits increased:
› No change in Education Cess and Higher Education Cess
› Surcharge applicable @ 10% on total income exceeding Rs.1 crore.
Non Corporate Tax Provisions:
Assessee Previously Proposed
Individuals, HUF’s,
AOP & BOI
2,00,000 2,50,000
Senior Citizens 2,50,000 3,00,000
Super Senior
Citizens
5,00,000 5,00,000
A
3

4. › Sec 80C exemption limit on investments made in eligible instruments increased from 1 lakh to
1.5 lakhs. Investments in PPF increased from 1 lakh to 1.5 lakhs.
› Interest payment on housing loans deduction in respect of Self Occupied property has been
increased from 1.5 lakhs to 2 lakhs.
› Alternate Minimum Tax (AMT) credit u/s 115JD to be provided in the subsequent year to an
assessee who has paid AMT in any earlier previous year.
› Deduction u/s 80CCD - condition of joining service on or after 1st January 2004, not applicable
to private sector employees as in the case of Central Govt. employees.
A Non Corporate Tax Provisions:
4

5. Capital Gains provisions:
› It is clarified that relief u/s 54(1) is available only if investment is made in one residential house
situated in India. Similarly, sec 54F(1) deduction is available only if investment is made in one
residential house situated in India.
› Deduction u/s 54EC for investments in specified bonds to be restricted to 50 lacs even if six
months period from the date of transfer is spread over two financial years.
› Period of holding of an unlisted security and mutual fund units (other than equity oriented
mutual funds units) increased to 36 months from 12 months.
› Long Term Capital Gains tax on mutual fund units other than equity oriented units increased
from 10% to 20%.
› Transfer of Govt. Securities (carrying periodic payment of interest) from one Non-resident to
another Non-resident outside India through an intermediary would not be regarded as transfer,
thus no capital gain tax on such securities.
› Securities held by FII’s to be treated as Capital Assets.
A
5

6. Corporate Tax Provisions:
› No change in tax rates applicable to Companies, both domestic and other than domestic, partnership
firms, Co-operative societies and Local Authorities.
› Expenditure incurred on CSR activities is not an allowable expenditure u/s 37 as such expenses are
not deemed to have been incurred for the purpose of business. However, CSR expenditure of nature
described u/s 30-36 shall be allowed under those sections subject to fulfillment of prescribed
conditions.
› Presumptive income u/s 44AE increased to Rs.7,500/- every month (or part of a month) for all types
of goods carriages.
› Sec 35AC deduction to manufacturing companies for investments made in Plant and Machinery
extended for investment made upto 31st March 2017 for a minimum investment of Rs.25 crores.
› 15% tax on dividends received by Indian companies from specified Foreign companies continued.
B
6

7. TDS Provisions:
› Disallowance u/s 40(a)(ia) in case of non-deduction/non-payment of TDS on resident
payments to be restricted to 30% of expenditure amount as against 100%
disallowance earlier.
› Sec 40(a)(ia) disallowance to extend to all expenditure on which tax is deductible
under Chapter XVII-B, thereby bringing salary, director fees etc. under the
disallowance net.
› No Sec 40(a)(i) disallowance for non-resident payments in previous year if tax is
deducted during previous year and same is paid on or before return filing date u/s
139(1).
B
7

8. Transfer Pricing Provisions:
› Assumes transaction between an enterprise and a non-associated enterprise as deemed
international transaction:
› if there exists a prior agreement between associated enterprise of an enterprise and a
non-associated enterprise or the terms of the transaction are determined in substance
between non-associated enterprise and an associated enterprise of an enterprise,
› Wherein an enterprise or its associated enterprise or both are non residents irrespective or
whether a non-associated enterprise is a non resident or resident.
› Now even a transaction between two resident entities could fall under the ambit of
transfer pricing provisions.
Deemed international transaction: u/s 92B(2)
B
8

9. Key Indirect Tax Proposals:
› Sale of time or space for advertisement in broadcast media to include such sales in online and mobile
advertisement. Sale of space in print media remains excluded.
› Service Tax proposed on radio taxis or radio cabs, whether or not air conditioned. Abatement
prescribed for rent-a-cab extended to radio taxi service.
› Services rendered by Director to body corporate brought under reverse charge mechanism, Service
receiver will be liable to pay Service Tax.
› Service tax on loading, unloading, packing, warehousing, transport by vessel, rail or road of cotton
exempted.
› Credit on input and input services to be taken within six months from invoice date or other specified
document.
› Interest to be charged based on extent of delay, upto 6 months @ 18%; above 6 months upto 1 year
@ 24% and more than a year @ 30%
Service Tax Provisions:
C
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10. GANERIWALA & CO.
CHARTERED ACCOUNTANTS
About us:
Ganeriwala & Co. was established by Raj
Kamal Ganeriwala, in the year 1984, providing
Attestation, Consultancy and Compliance
services in Audit, Accounts, Management &
Taxation (both Direct tax and Indirect tax).
The firm is located at central business
district known as Majestic in the city of
Bangalore. Presently the firm is operating out
of more than 1300sqft, fully furnished office
premises and is equipped with state of the
art technology and operating with the
strength of more than 25 personnel including
Four full time Partners. The firm is presently
rendering services to MNC's, Bank branches,
Large Industries and SME sectors.
The firm specializes in providing aforesaid
services under one umbrella to SME Sector.
Contact Us:
#437 - 438, 2nd Floor, Alankar Pearl Plaza, K.G.
Road, Bangalore - 560009.
Telephone Nos. 080-22251743, 080-22955275,
E-mail: mail@ganeriwala.in,
Website: www.ganeriwala.in