Amendments made by Finance Act 2016 incorporating clarification made by department till 22nd June 2016

1. Surcharge raised from
12% to 15% for
individuals with
incomes above 1 Crore
Income Disclosure
Scheme 2016/
Dispute resolution
scheme 2016
Presumptive
taxationscheme introduced for
allprofessionals with
receiptsup to Rs. 50
lakhs.
POEM to be
applicable
from
1.4.2017
Capital
gains/
Income Taxexemptions
proposed for start-
up
POEM proposed
to be deferred by
1 year
Govt. will pay
8.33% PF for new
government
employees for first
3 years
All Buy backs liable to
Buyback distribution
tax
Scheme increased
to 50 lakh/ 2 crores
No higher
withholding tax if
non-resident does
not have PAN
Optional Reduction in
corporate tax for New
manufacturing companies
registered after March 1,
2016
to 25%
Turnover limit of
presumptive
taxation
Corporate tax
reduced to 29% for
companies
having turnover
not exceeding 5
crores
Relief u/s 87A
proposed to be
increased from
Rs. 2,000 to
Rs. 5,000
Phase out of
tax
deductions/profi
t linked
incentive
CA. Vijay Maheshwari
Country by Country reporting introduced
Patent Box
regime
proposed
income from
storage & sale of
crude oil exempt
from tax
Dividend in excess of
10 lakh taxable @
10%
Foreign
company

2. Tax
Rates

3. Tax Rates of Individuals
Income Other individuals Senior Citizen Super Senior Citizen
Up to Rs. 2,50,000 Nil Nil Nil
Rs. 2,50,001 to
Rs. 3,00,000
10% Nil Nil
Rs. 3,00,001 to
Rs. 5,00,000
10% 10% Nil
Rs. 5,00,001 to
Rs. 10,00,000
20% 20% 20%
Above Rs. 10,00,000 30% 30% 30%
• Surcharge at 15% if TI > Rs. 1 Crore(Earlier it was 12%)
• EC & SHES -3% of IT +Sur

4. Tax Rates of Firm
Tax
Rate
30%
• Surcharge @ 12% if TI > Rs. 1 Crore.
• EC & SHES -3% of IT +Sur

5. Tax Rates of Domestic
Company
29
%
18.5
%
Tax Rate MAT
• Surcharge @ 7% if TI > Rs. 1 Crore, and 12% if TI > Rs. 10 Crores
• EC & SHES - 3% of IT +Sur
TO < 5
Crores
TO < 5
Crores
30
%

6. Special Rate for newly Established
Manufacturing Company – Sec.
115BA
25
%
Tax
Rate
• Domestic Company registered on or after 1st of March, 2016.
• Not engaged in any business other than the business of
manufacture or production of any article or thing; research in
relation to, or distribution.
• Company has not claimed any benefit under section 10AA,
Section 32, 32AC, 32AD, 33AB, 33ABA, 35(2AA) & (2AB), 35AS,
35CCC or 35CCD (additional depreciation, investment
allowance, expenditure on scientific research) and any
deduction under Part-C of Chapter-VI-A (Except Sec. 80JJAA)
• Furnishes irrevocable option to claim this benefit before
139(1)

7. Tax Rates of Foreign Company
40
%
Tax
Rate
18.5
%
MAT (if
applicabl
e)
• Surcharge at 2% if TI > Rs. 1 Crore and 5% TI > Rs. 10 Crores
• EC & SHES - 3% of IT +Sur

8. Presumptive
Taxation

9. Increase in threshold limit for
presumptive taxation scheme for
persons having income from business
Presumptive
Scheme
applicable -
Total turnover
or gross
receipts not
exceeding
Rs. 1 crore
Old
provision
s
Presumptive
Scheme
applicable -
Total turnover
or gross
receipts not
exceeding
Rs. 2 crore
amendment
Salary, remuneration, interest etc. paid to the partner shall not be deductible while
computing income under section 44AD – Advance tax to be paid by March
15 of the FY

10. Old Provision –Section 44AD
• Eligible Assessee engaged in eligible business.
• Income @ 8% or higher income declared.
• No deduction U/s 30 to 38 will be allowed. (SS-2)
• However Interest and Salary subject to Sec. 40(b) in case of firm would be allowed. (Prov
to SS2)
• Depreciation deemed to been have been allowed.
• Advance tax provision shall not be applicable (XVII-C) (Subsec. 4)
• If claims lesser income and TI > maximum amount not chargeable to tax, Shall require to
keep & maintain books of accounts as per Sec. 44AA and get his accounts audited and
furnish report U/s 44AB. (Subsec. 5)
• Not applicable on a person carrying profession [44AA(1]/Agency Business or earning
Commission or brokerage.

11. Old Provision –Section 44AD
Eligible Assessee :
 Resident Ind/HUF/Firm (Not LLP)
 Not claimed deduction U/s 10A, 10AA,10B, 10BA or Chapter VIA-C
Eligible business
 Except business of plying, hiring or leasing goods carriage (Sec. 44AE)
 Turnover or receipt not more than Rs 1 Croes

12. Old Provision –Section 44AA &44AB
Clause d of Sec. 44AA(2) (iv) & 44AB Maintenance of Books of accounts and
to it Audited
 Carrying on business mentioned in Sec. 44AD;
 Claimed income lower than deemed income and
 TI > Maximum amount not chargeable to tax

13. Amended Provision –Section 44AD
• In eligible business limit of 1 Cr. Uplifted to 2 crore.
Effect :
Now an assessee having TO upto 2 crore can take benefit of Sec. 44AD.
• Proviso to Sec. 2 omitted .
Effect :
No Interest and Remuneration in case of firm is allowed now
• Sub section 4 & 5 substituted.
•Effect :
•Advance tax provisions are applicable now

14. Amended Provision –Section 44AD
• New Sub-Section 4
If deemed provision opted in a PY
In any PY within next 5 PY not opted deemed provision
Shall not be eligible for deemed provision for next 5 PY (from PY of not
opting)
• New Sub-Section 5
If sub-section 4 are applicable and
TI > maximum amount not chargeable to tax, Shall require to keep &
maintain books of accounts as per Sec. 44AA and get his accounts audited
and furnish report U/s 44AB.

15. Amended Provision –Section 44AA &
44AB
Example
• Mr. X carrying eligible business having following :-
•Question :
•1. Can he opt 44AD in PY 2018-19?
•2. Till which PY he can not opt 44AD?
•3. Whether he has to keeps books of accounts and get accounts audited in different PY?
•4. Suppose in FY 2017-18 his TO is 201 Lacs, then what would be situation in different PY?
PY T.O. in Las Rs. Income declared
2016-17 150 12
2017-18 200 10
2018-19 100 8

16. Amended Provision –Section 44AA &
44AB
Example –Continue ….
• In same example :-
•5. Suppose X is a partnership firm, what would be TI?
•6. Suppose X is a LLP, what would be implication?
•7. Suppose X earns commission income, what would be situation in different years?
•7. Whether advance tax provisions would be applicable? If yes what would be due dates?

17. Presumptive taxation scheme for persons
having income from profession –
New Sec.
44ADA• Assessee engaged in the Specified profession (Section 44AA)
• Total gross receipts does not exceed 50 lakh rupees in a P.Y.,
• 50% of the gross receipts to be Taxable income on presumptive basis
• No deduction U/s 30 to 38 will be allowed.
• Depreciation deemed to been have been allowed.
• If claims lesser income and TI > maximum amount not chargeable to tax, Shall require to
keep & maintain books of accounts as per Sec. 44AA and get his accounts audited and
furnish report U/s 44AB.

18. Presumptive taxation scheme for persons
having income from profession –
New Sec.
44ADA
Consequential amendment to Sec. 44AB in Clause d
In place of Business the word profession substituted and in place of Sec. 44AD, Sec. 44ADA
substituted.
Limit of audit uplifted to 50 lacs as against 25 lacs (Clause (b) of Sec. 44AB)
•Key Notes :
•1. Despite Section 44AD, 44ADA applies on LLP also.
•2. No interest and salary to partners are allowed in case of professional firm opting this section.
•3. Advance tax liability is at par with normal provision (like 44AD no special provision), AT to be paid
in 4 installments.
•4. No dis-countinuance and in eligibility clause like 44AD. Professional is free to opt or not in each
PY.
•5. Very higher presumptive income as against recommendation of Eswar Committed (33.33%)

19. Changes in TDS & TCS

20. Increase in threshold limit for TDS
Present
Section
Heads Old Threshold Limit
(Rs.)
New Threshold
Limit (Rs.)
192A Payment of accumulated
balance of Provident Fund due
to an employee
30,000 50,000
194BB Winnings from Horse Race 5,000 10,000
194C Payments to Contractors Aggregate annual limit
of 75,000
Aggregate annual limit
of 1,00,000
194LA Payment of Compensation on
acquisition of certain
Immovable Property
2,00,000 2,50,000
194D Insurance commission 20,000 15,000
194G Commission on sale of lottery tickets 1,000 15,000
194H Commission or brokerage 5,000 15,000

21. Revision in TDS rates
Present
Section
Heads Old Rate of TDS (%) New Rate of TDS
(%)
194DA Payment in respect of
Life Insurance
Policy
2% 1%
194EE Payments in respect of
NSS Deposits
20% 10%
194D Insurance commission Rate in force (10%) 5%
194G Commission on sale of
lottery tickets
10% 5%
194H Commission or brokerage 10% 5%

22. TCS on Sale of Goods & Services (Sec
206C)Sub-Section (1D) amended
Every person being a Seller
Who receives any amount in cash as consideration for sale of Bullion or Jewellery or
Any other goods or providing any service
Shall at the time of receipt of such amount in cash
Collect 1% of Sale Consideration
If such consideration exceeds
2L, 5L & 2L respectively.
Sub-Section (1F) inserted
Every person being a Seller
Who receives any amount as consideration for sale of motor vehicle of the value
>10L Shall at the time of receipt of such amount Collect 1% of Sale Consideration

23. TCS on Sale of Goods & Services (Sec
206C)Analysis by creating different Situations
 Goods having value of 5L & money received in Bank account (by NEFT)?
 Goods having value of 5L & money received in Bank account (Cash deposited by
Customer directly)?
 Consideration by bearer cheque, un-crossed cheque?
 Goods exchanged (Barter system)?
 In above if a part is received in cash?
 Buyer bought goods for personal consumption?
 Invoice raised later on 15-06-16 and cash received on 01-06-2016?
 Sale completed/Services rendered and Invoice issued before 01-06-2016 but
payment received in cash on or after 01-06-2016?
 Sale completed/Services rendered but Invoice issued and payment received in cash
on or after 01-06-2016?
 Consideration without ST- 200000/- plus ST 15000/- ?

24. TCS on Sale of Goods & Services (Sec
206C)Analysis by creating different Situations Continue ….
 Goods and Services both included in an invoice, value of Rs. 105000/- each ?
 On Service TDS is deducted by payer, will TCS apply?
 TDS deducted in part ? i.e. Value of service Rs. 250000/-, TDS made on Rs.
200000/-, cash received Rs. 50000/-?
 In above example no receipt in cash?
 In above example Rs. 45000 in cash & Rs. 205000/- cheque received?

25. TCS on Sale of Vehicle (Sec 206C)
Analysis by creating different Situations
 Car sold of Rs. 1200000/-, receipts in cheque?
 Car sold of Rs. 1200000/-, receipts in cheque Rs. 1000000/- & in Cash 200000/-?
 5 cars sold each having value of Rs. 500000/-?
 When to collect TCS, booking amount received on 01-06-2016 Rs. 200000/-, Sale
made and balance Rs. 10,0000/- received on 30-06-2016?
 Entire amount received from Financer directly?
 Vehicle sold through sub-dealer?
 Booking cancelled, TCS to be refunded?
 Buyer not having PAN, higher rate of TDS applicable?

26. TCS on Sale of Vehicle (Sec 206C)
Clarification By department (Cir No. 22/2016 dated 08-06-2016)
 TCS on Motor vehicle : Not on dealer but on retail sale
 Sale to, Govt deptt, Embassies, UN : TCS does apply
 TCS U/s (AD) Vs (IF) if MV is having value of Rs. 8 Lacs : (1D) applies
 TCS on Motor Vehicle : Payment received in installments : on Each inst @1%

27. Deeming fiction [Sec 50C & 43CA]
50C -Capital Assets w.e.f. 01-04-2003
43CA- Others [PGBP] w.e.f. 01-04-2013
•Language of both the provisions are same.
•Judicial pronouncement in respect of Sec. 50C would also be applicable on Sec.
43CA
2723-Jun-16

28. Deeming fiction [Sec 50C]
•The assets transferred is a capital asset.
•Asset is Land or Building or Both
•There is a value adopted, assessed or assessable by any authority of State govt for
the purpose of stamp duty.
•The actual consideration is less than the value of such authority.
Then
•Such value will be consideration for transfer of the asset.
2823-Jun-16

29. Prior amendment position Sec 50C
Date for the purpose of Valuation
•Normally date of registration of conveyance deed
but
Case covered Us/ 2(47) (v) i.e. (53A)
•Sale agreement executed
•Full value paid
•Possession of property handed over
Then date of sale agreement shall be date for Circle rate.
Dy CIT Vs. S Venkat Reddy (2013) 32 Taxmann.com 24 (Hyd.)
ITO .v. Modipon Ltd. (Delhi)(Trib.) (2015) www.itatonline.org
CA. Vijay Maheshwari 2923-Jun-16

30. Prior amendment position Sec 50C
Date for the purpose of Valuation
•Normally date of registration of conveyance deed
but
Case covered Us/ 2(47) (v) i.e. (53A)
•Sale agreement executed
•Full value paid
•Possession of property handed over
Then date of sale agreement shall be date for Circle rate.
Dy CIT Vs. S Venkat Reddy (2013) 32 Taxmann.com 24 (Hyd.)
ITO .v. Modipon Ltd. (Delhi)(Trib.) (2015) www.itatonline.org
CA. Vijay Maheshwari 3023-Jun-16

31. Post amendment position Sec 50C
Insertion of proviso to SS (1)
Seller
• Value on date of agreement may
be taken as Full value of
Consideration.
• Consideration or part
received in a/c payee Cheque/DD
or ECS on or before date of
agreement
Buyer
Date of agreement - 31-3-2016,
token money by A/c payee
cheque of Rs. 1L
Date of Registration - 30-6-2016
Transfe
r
Difference in language of Sec. 50C and
43CA?
Otherwise than in cash
By special mode
Impact ?

32. TAXATION OF DIVIDEND INCOME IN HANDS OF RECEIPIENT
– SECTION 115BBD AND SECTION 10(34)
ICO 1
Resident
Individual/
Firm / HUF
:APPLICABILITY
-
• Recipient Resident :-
• Individuals
• HUF
• Firm
• Dividend could be
:- • Declared, distributed or paid by domestic
company
• As per Section 2(22) excluding 2(22)(e)
TAX TREATMENT :-
• Income in excess of Rs. 10,00,000 shall be
chargeable to tax @ 10% , without any :-
• Deduction for any
expenses/allowances;
• Set off of losses
DIVIDEND > 10 LAKH DIVIDEND > 10 LAKH

33. Tax benefits for individuals
Small taxpayer relief u/s 87A – Income upto Rs. 5
lakhs
Tax relief u/s 87A has been increased from Rs. 2,000 to Rs. 5,000 (subject to
tax due)
Relief under Section 80GG – Deduction for rent – No
HRA
The limit for deduction has been increased from Rs. 2000 p.m to Rs.
5000 p.m.

34. Time limit for acquisition/construction of self
occupied property - Deduction of Interest-
Section 24(b)
Completion/
acquisition of
house property
should be
completed within
3 years from
the end of the
F.Y. in which
capital was
borrowed.
Old
provision
s
Completion/
acquisition of
house property
should be
completed within
5 years from
the end of the
F.Y. in which
capital was
borrowed.
amendment

35. Deduction for acquisition of
residential property –
Section 80EECondition : -
• Assessee : Individual
• Loan sanctioned by financial institution between 1.4.2016
and 31.3.2017
• Loan for the purpose of acquisition of residential house
property.
• Property value less than 50 lakh and loan amount not
exceeding 35 lakh
• On date of sanction of loan assessee doesn’t own any
residential houseDeduction – Till the repayment of loan continues : -
• Deduction of interest on loan taken for residential house property shall not
exceed 50,000.
• No deduction shall be allowed under any other provision of the Act for such
interest.
• Limit over and above limit of Rs. 200,000 for self occupied property under Section
24.

36. Advance Tax (Sec. 211 & 234C)
Due
date
For normal
assessee
For 44AD “Eligible
business”
15th Jun 15% Nil
15th Sep 45% Nil
15th Dec 75% Nil
15th Mar 100% 100%

37. Charitable organization – Cease to exist or
Converts to non- charitable organization –
Chapter XII- EB - June 1, 2016
Charitable
organizatio
n
• Additional income-tax at maximum
marginal rate shall be levied in case of : -
• Conversion of a charitable organization
into any form not eligible for registration
u/s 12AA
• Merger with, any entity not registered
u/s 12AA or having different objects
or
• Non distribution of assets of a
charitable organization on its
dissolution to another charitable
institution registered u/s 12AA or
approved u/s 10(23C), within 12 months
of dissolution
Non-
Charitable
organizatio
n
Merger/
Conversio
n
Transfer of
Asset on
dissolution

38. Other applicable Conditions
• Accreted Income = Fair market value of Total Assets (Valued in prescribed
manner) – Liabilities on specified date
• No credit for tax and leviable even if trust or institution does not have any other
income chargeable to tax in the relevant previous year.
• Principal officer or the trustee and the trust or the institution shall be deemed to be
assessee in default
• Further, the recipient of assets, which is not a charitable organization, shall also
be liable to be held as assessee in default in case of non-payment of tax and
interest, to the extent of the assets received.

39. Start up Tax incentives

40. START UPS – TAX
INCENTIVES
100% profits
deduction for 3
out of 5 years
LTCG exemption to
assessee investing
in Fund of Funds
under Start up
India Action Plan
Capital gains on
transfer of
residential
property exempt
from tax if invested
in eligible start up

41. Section 54EE – Investment into units of “Fund of
Funds” under Start up India Action
Plan
Long term
capital
asset
Taxpayer
• Capital Gains from transfer of a long-term capital
asset
• Investment of whole or any part of capital gains in
the long-term specified asset (LTSA), within 6
months from such transfer – Maximum Rs. 50
lakh
• Quantum of
exemption :-• Cost of Asset > Capital Gains – Entire gains
exempt
• Cost of Asset < Capital Gains – (Entire
Capital Gains) * (Amount
Invested/Entire gains)• LTSA transferred before 3 years – Capital gains
exempt earlier chargeable to tax in year of
transfer of long-term specified asset
• LTSA – Units of notified fund issued before April 1 ,
2019
Long
term
specified
Asset
Transfer
of
Investme
nt in

42. Section 54GB – Investment into shares of qualified
company
– AY 2017-18
Residenti
al
Property
Individual
or HUF
• Capital Gains from transfer of residential
property
• Subscription of shares of a company in eligible
business/ eligible start up, until 31.3.2019
• Eligible business/eligible start up defined as per
Section 80-IAC
• New asset that can be acquired by the start up out
of invested funds can include computer/computer
software• Available to technology driven start-up so
certified by the Inter-Ministerial Board of
Certification notified by the Central
Government in the Official Gazette
• Acquire new asset before due date of return
filing for investor
• Taxpayer owns more than 50% shares of the
company
Eligibl
e Start
up
Transfer
of
Investme
nt in

43. Start up Income exemption - Section
80IAC
Indi
a I Co.
Offshor
e
Offshor
e
Fund
APPLICABILITY :-
• An eligible start-up derives profits and gains
from eligible business
• Deduction of 100% of profits and gains
for 3 consecutive AY, out of first 5 years
since incorporation
• Eligible startup should not be formed by split
up or reconstruction etc of business
• “Eligible business” means a business which
involves innovation, development,
deployment or commercialization of new
products, processes or services driven by
technology or intellectual property;India
Investmen
ts
Oversea
s
Investmen
ts

44. Start up Income exemption - Section
80IAC
Turnover <
25 crores for
every
individual year,
between
1.4.2016
to 31.3.2021
Turnove
r
Certificate of
eligible
business from
the Inter-
Ministerial
Board of
Certification
Incorporation
– 1.4 2016 to
31.3.
2019
Incorporatio
n
Certificat
e

45. Filing of return of Income
Section Earlier Now
139(1) Person not obligated to include income
exempt u/s 10(38) , to ascertain whether
his income exceeds the maximum
amount which is not chargeable to
income tax .
Specific exclusion to provide that effect of
Section 10(38) shall not be considered to
arrive at income, which shall be
considered to arrive at whether a person
is liable to file ITR.
139(4) Belated return can be filed at any
time before : -
• One year from the end of the relevant
assessment year or
• Completion of assessment,
whichever is earlier.
Belated return can be filed at any time
before : -
• End of the relevant assessment year or
• Completion of assessment,
whichever is earlier.

46. Filing of return of Income
Section Earlier Now
139(5) Belated return couldn’t be revised. Belated return can also be revised.
139(9)(aa) Non payment of self-assessment
tax together with interest, on or
before the date of furnishing of return
could result in the ROI being
considered defective
It shall not be considered as defective

47. Payment to Railways
covered for
disallowance u/s 43B
•Taxes
•Employers Cont
•Bonus or Comm
•Interest on Loan
to FI/Sch. Banks
•Leave
Encashment
Old
provision
s
Due to
Railways
for using the
assets of
the
Railways
covered
amendme
nt

48. Tax Incentive for employment generation –
Section 80JJAA – AY 2017-18
Cost incurred on any employee whose total emoluments are less than or equal to
twenty five thousand rupees per month – 30% of emoluments allowed as a
deduction
No deduction where Government pays for
EPF
Minimum number of days of employment in a financial year reduced from 300
days to 240
Condition of 10% increase in number of employees every year is proposed to be
done away
All employers who are required to get accounts audited u/s 44AB covered for this
exemption

49. Phase out plan of incentives (Profit linked
Deduction/ Weighted deduction) &
Additional deduction

50. Phase out plan of incentives (Profit linked
Deduction/ Weighted deduction)
Section Existing Proposal
10AA- Special
provision in respect
of newly established
units in Special
economic zones
(SEZ)
Profit linked deductions for units in
SEZ for profit derived from export of
articles or things
No deduction shall be available
to units commencing
manufacture or production of
article or thing or start
providing services on or after
1st day April,2020. (from
previous year 2020-21
onwards).
35AC-Expenditure
on eligible projects
or schemes.
Deduction for expenditure incurred
by way of payment of any sum to a
public sector company or a local
authority or to an approved
association or institution, etc. on
certain éligible social development
project or a scheme
No deduction shall be
available with effect from
1.4.2017 (i.e from previous
year 2017-18 and subsequent
years).

51. Phase out plan of incentives(Profit linked
Deduction/ Weighted deduction)
Section Existing Proposal
35CCD-Expenditure on
skill development project.
Weighted deduction of 150 per cent
on any expenditure incurred (not
being expenditure in the nature of
cost of any land or building) on any
notified skill development project
by a company.
Deduction shall be restricted
to 100 per cent from
01.04.2020 (i.e. from previous
year 2020-21 onwards).
Section 80IA; 80IAB, and
80IB
-
Deduction in respect of
profits derive
from
a) development, operation
and maintenance of an
infrastructure
facility (80-IA)
(b)development of
special economic
zone (80-IAB)
(c)production of mineral
oil and natural
gas [80-IB(9)]
100 per cent profit linked deductions
for specified period on eligible
business carried on by industrial
undertakings or enterprises referred
in section 80IA; 80IAB, and 80IB.
No deduction shall be
available if the specified
activity commences on or
after 1st day April, 2017. (i.e
from previous year 2017-18
and subsequent years).

52. Phase out plan of incentives (Accelerated
Depreciation/ Weighted Deduction)
Section Existing Proposal
Section 32 read with Accelerated depreciation is provided
to
To amend the new Appendix IA read
rule 5 of Income-tax certain Industrial sectors in order to with rule 5 of Income-tax Rules,
1962 to
Rules, 1962- give provide that highest rate of
depreciation
Accelerated impetus for investment. The under the Income-tax Act shall be
Depreciation. depreciation restricted to 40% w.e.f 01.4.2017. (i.e
under the Income-tax Act is
available
from previous year 2017-18 and
up to subsequent years).
100% in respect of certain block of The new rate is proposed to be
made
assets. applicable to all the assets (whether
old
or new) falling in the relevant block
of
assets.

53. Phase out plan of incentives (Accelerated Depreciation/
Weighted Deduction)
Section Existing Proposal
35(1)(ii)-
Expenditure on
scientific research.
Weighted deduction from the
business income to the extent of
175 per cent of any sum paid to an
approved scientific research
association which has the object of
undertaking scientific research.
Similar deduction is also available
if a sum is paid to an approved
university, college or other
institution and if such sum is used
for scientific research.
Weighted deduction shall be
restricted to 150 per cent from
01.04.2017 to 31.03.2020 (i.e. from
previous year 2017-18 to previous
year 2019-20) and deduction shall
be restricted to 100 per
cent from 01.04.2020 (i.e. from
previous
year 2020-21 onwards).
35(1)(iia)-
Expenditure on
scientific
research.
Weighted deduction from the
business income to the extent of
125 per cent of any sum paid as
contribution to an approved
scientific research company.
Deduction shall be restricted to 100
per cent with effect from
01.04.2017 (i.e. from previous year
2017-18 and subsequent years).

54. Phase out plan of incentives (Accelerated Depreciation/
Weighted Deduction)
Section Existing Proposal
35(1)(iii)-
Expenditure on
scientific research.
Weighted deduction from the
business income to the extent of
125 per cent of contribution to an
approved research association or
university or college or other
institution to be used for research
in social science or statistical
research.
Deduction shall be restricted to 100
per cent with effect from
01.04.2017 (i.e. from previous year
2017-18 and subsequent years).
35(2AA)-
Expenditure on
scientific research.
Weighted deduction from the
business income to the extent of
200 per cent of any sum paid to a
National Laboratory or a university
or an Indian Institute of
Technology or a specified person
for the purpose of approved
scientific research programme.
Weighted deduction shall be
restricted to 150 per cent with
effect from 01.04.2017 to
31.03.2020 (i.e. from
previous year 2017-18 to previous
year
2019-20). Deduction shall be
restricted to 100 per cent from
01.04.2020 (i.e. from previous

55. Phase out plan of incentives (Accelerated Depreciation/
Weighted Deduction)
Section Existing Proposal
35(2AB)-
Expenditure on
scientific research.
Weighted deduction of 200 per
cent of the expenditure (not being
expenditure in the nature of cost
of any land or building) incurred by
a company, engaged in the
business of bio- technology or in
the business of manufacture or
production of any article or thing
except some items appearing in
the negative list specified in
Schedule-XI, on scientific research
on approved in-house research
and development facility.
Weighted deduction shall be
restricted to 150 per cent from
01.04.2017 to 31.03.2020 (i.e.
from previous year 2017-18 to
previous year 2019-20).
Deduction shall be restricted to 100
per cent from 01.04.2020 (i.e. from
previous year 2020-21 onwards).

56. Phase out plan of incentives (Accelerated Depreciation/
Weighted Deduction)
Section Existing Proposal
35AD- Deduction
in respect of
specified
business.
In case of a cold chain facility,
warehousing facility for storage of
agricultural produce, an affordable
housing project, production of
fertiliser and hospital weighted
deduction of 150 per cent of capital
expenditure (other than
expenditure on land, goodwill and
financial assets) is allowed.
In case of a cold chain facility,
warehousing facility for storage of
agricultural produce, hospital, an
affordable housing project,
production of fertilizer, deduction
shall be restricted to 100 per cent
of capital expenditure
w.e.f. 01.4.2017 (i.e. from previous
year 2017-18 onwards).
35CCC- Expenditure
on notified
agricultural
extension project.
Weighted deduction of 150 per
cent of expenditure incurred on
notified agricultural extension
project.
Deduction shall be restricted to 100
per cent from 1.4.2017 (i.e from
previous year 2017-18 onwards).

57. AFFORDABLE HOUSING – SECTION 80
IBA 100% deduction of profits from developing and building affordable housing projects
approved by the competent authority before the 31st March, 2019
Completion of projects within 3 years from
approval
Four metros – Land measuring 1000sq m, within municipal limits – Individual unit –
30sqmtrs Others – Land measuring 2000sq m – Individual unit – 60sqmtrs
No unit to individual/his family members if a unit is already allocated
to him

58. Income Declaration Scheme, 2016 – June 1,
2016 to notified date
Income upto FY 2015-16 can be offered under this Scheme – Total tax
rate of 45%
Certain specific cases outside purview of the scheme – Assessment notice issued/ Black
money cases, information received from foreign countries.
Immunity from Wealth Tax, scrutiny, enquiry and prosecution for cases covered under the
Scheme
Declaration under the scheme through misrepresentation or suppression of facts -
Declaration shall be treated as void
Tax (etc). should be paid by a date specified by the Government failing which
declaration shall be void

59. Section Key changes
Sovereign Gold
Bond Scheme,
2015
Redemption of Sovereign Gold Bonds, under the Scheme, by an
individual shall not be liable to capital gains tax
Rupee
Denominated
Bond
- – Ay 2017-18
Capital gains, arising in case of appreciation of rupee between the date of
issue and the date of redemption against the foreign currency in which
the investment is made shall be exempt from tax on capital gains.
Tax Treatment of
Gold
Monetization
Scheme, 2015 –
Ay 2016-17
• Deposit Certificates issued under Gold Monetization Scheme, 2015
notified by the Central Government, shall not be considered as a
capital asset and shall therefore be exempt from capital gains tax.
• Interest on Deposit Certificates issued under the Scheme shall also
be exempt from income-tax
57
CAPITAL
GAINS

60. Section Key changes
Tax on receipt
of shares of
closely held
company on
demerger/
merger
Any shares received by an individual or HUF as a consequence of
demerger or amalgamation of a company, shall not attract the
provisions of clause (vii) of sub-section (2) of section 56.
Additional
depreciation
u/s section
32(1)(iia)
That an assessee engaged in the business of transmission of
power shall also be allowed additional depreciation at the rate of
20% of actual cost.
Processing
under section
143(1)
Assessment under Section 143(3) shall be completed only when
return is processed under Section 143(1).
58
RELIEF
MEASURES

61. Section Key
changes
Extension of
time limit to
Transfer
Pricing
Officer in
certain cases
Where assessment proceedings are stayed by any court or where a
reference for exchange of information has been made by the
competent authority & the time available to the Transfer Pricing
Officer for making an order after excluding the time for which
assessment proceedings were stayed or the time taken for receipt of
information, as the case may be, is less than sixty days, then such
remaining period shall be extended to sixty days.
59
OTHER
AMENDMENTS
Amt received
on death from
NPS
The whole amount received is exempt now.
15G/H for 194I Sec. 197A amended, now a Landlord may furnish 15G/H for non
deduction u/s 194I.

62. Sec. 143(1) Scope of adj.
extendedExisting provision :
ITR filed is processed subject to adjustments for arithmetic errors and inaccurate claims apparent.
Amendement: - now following adjustments can also be made
• Setting off brought forwarded loss if previous year ITR was belated.
• Expenditure reported to be disallowed in TAR but not added in ITR.
• Deduction of special sections (10AA, 80-IA, 80-IB, 80-IC,80-ID or 80-ID) if ITR is
belated
• Income appearing in form 16, 16A or 26AS but not included in ITR.
Before making such adjustment an opportunity shall be given to explain and rectify
within 30 days.

63. Taxation of Non
Residents

64. Storage and Sale of crude Oil by Foreign Company – AY 2016-
17 onwards
Indi
a
Offshor
e
Foreign
Compan
y
APPLICABILITY
:-
• Foreign national Oil companies (NOCs) and
multinational companies (MNCs) storing
crude oil in a storage facility in India and
selling crude oil to a person resident in India
• Income from such activity exempt
provided :-• Storage and sale is pursuance to an
agreement or an arrangement entered
into by the Central Government or
approved by Central Government; and
• Having regard to the national interest,
the foreign company and the
agreement or arrangement are
notified by the Central Government
in this behalf
Indian
Compan
y
Transfe
r
Storag
e

65. Display of uncut Diamond by Foreign Company – AY 2016-17
onwards
Indi
a
Offshor
e
Foreign
Compan
y
APPLICABILITY
:-
• Foreign company engaged in mining of
diamonds
• No income shall be deemed to accrue or
arise in India if : -
• Display of uncut and unsorted
diamonds (without any sorting or
sale)
• Within Special Zone notified by
Central Government in this behalf
Displa
y

66. Preferential Patent regime – Section
115BBE
Indi
aI Co.
Offshor
e
FCO
Outsource
R&D
APPLICABILITY
:-
• Person resident in India and who is a
patentee is eligible for this tax treatment
• Royalty income in respect of a patent developed
and registered in India covered, alongwith
services in
connection with amount constituting royalty –
Sale or transfer not covered
• Such income taxed @ 10% without any
deduction in respect of any expenditure or
allowance
• Term royalty, developed, patent, patentee,
patented article and “true and first inventor”.
• Royalty includes payment for , Transfer of all or
any rights, imparting information concerning
working of and ‘use” of patent.

67. PLACE OF EFFECTIVE MANAGEMENT -
POEM
Application deferred by one year to
1.4.2017
CG to specify how IT Act provision shall apply to company which is deemed to have
POEM for the first time in India – Exception may apply till assessment is completed for
first year
Notification providing the above shall be laid before both Houses of
Parliament
Apply from AY 2017-
18

68. Requirement to obtain PAN for foreign
company – Effective June 1, 2016 –
Section 206AA
Resident
NR
Current
Position :-
• Resident Indian to withhold higher tax if the
non resident recipient does not have a PAN in
India, for
any sum or income or amount on which
tax is deductible under Chapter XVIIB
Propos
al
• Section 206AA provision should not apply to
a non-resident, not being a company, or to a
foreign company, in respect of :-
• Interest on long-term bonds as referred
to in section 194LC
• Any other payment, subject to
such conditions as may be
prescribed
Payme
nt
Offshor
e
Indi
a

69. MAT applicability on FII/ FPI –
Effectiv
e 1.4.2001
Indi
a I Co.’s
Offshor
e
FII/ FPI – No
PE in India
No MAT on FII / FPI where : -
• Treaty Country
• No PE in accordance with the
Treaty
• Non- Treaty Country
• FII/ FPI not required to seek
registration under any law for the
time being in force relating to
companies.
Investment/
Sale of
shares

70. Transfer Pricing – Country by Country
Reporting & Master File
International group having consolidated revenue above Euro 750 million
covered
Indian parent above the specified limit also to file report to the prescribed authority
on or before the due date of furnishing of return of income for AY, relevant to the
applicable FY
Indian constituent of foreign group to provide details of parent company, on or before the
prescribed date
Where there are more than one entity of foreign parent, one entity can be nominated to
submit the details

71. Transfer Pricing – Country by Country
Reporting & Master File – AY
2017-18If parent is from a country where India does not have a CbC exchange agreement/
country is not sharing information, Indian entity to file CbC to prescribed authority on
notification
Authority can call for requisite information as desired, non furnishing whereof may invite
penalty and interest
Master File – Information to be provided shall be prescribed in Rules as per
BEPS AP 13
Non furnishing of information may result in a penalty of Rs 5
lakh.

72. Equalization levy –
Chapter
VIII
Indi
a
Indian
Busine
ss
Offshor
e
NR
OBJECTIVE
:-
• Address the challenges in terms of
taxation of digital economy transactions
APPLICABILITY
• 6 % of consideration for specified services
received /receivable by NR not having PE in
India, from : -
• Resident in India who carries out
business or profession, or
• From a non-resident having PE in India
• NR exempt from tax on income arising
from services where equalization levy
is chargeable
• NA if aggregate consideration does not
exceed 1 lakh in a PY
• Central Government shall make rules and
notify applicability of Equalization levy
Digital Supply
of Goods/
Services

73. BUY BACK DISTRIBUTION TAX – SECTION 115QA
ICO
Shareholders
BACKGROUND
:-
• Existing provisions apply only where buy back carried out as per
Section 77A of the Companies Act
• No clarity where Buy back carried out under Court
approval / Companies Act 2013, other routes
• Deduction considered as amount received by
company on issue of such shares
• Debate on what shall be such amounts in case of
Corporate reorganization/other specific cases
PROPOSED AMENDMENT :-
• Buy back under any law for the time being in force
covered under Section 115QA
• Amount received by the Company in respect of the shares being
bought back shall be determined in the prescribed manner -
Rules to be framed
Buyba
ck

74. Disclaimer :-
The analysis and views contained in this presentation are personal in
nature, are meant only for information and do not constitute a
professional advise to act/ or not act in any given circumstances. The
viewers/ readers are required to consult their own advisors before
arriving at a decision in any of their personal/ professional tax matters for
the aspects dealt herewith. We do not accept any liability, direct or
indirect, present or future or incurred in any manner whatsoever for
consequences arising out of reliance on the content of this presentation.
Neither the presenter, nor any of the parties connected with the
transmission or distribution of this content assumes any responsibility for
such outcomes. The tax and law matters are subject to interpretation
which could be different for different parties, and the courts/ authorities
may need not agree with the manner in which the subject is interpreted.

75. Thank You
CA. VIJAY MAHESHWARI
12/B, 1st Floor, Vaishali Complex
Deendayal Square, Shrikant Verma Marg
BILASPUR(C.G.)-495001
Phone No. : (07752)407555
Cell : 98271 13251
Email- vaainho@gmail.com