The document summarizes key changes in direct and indirect taxes in India's 2015-16 budget. For direct taxes, there is no change in income tax rates but additional depreciation was increased for manufacturing in backward areas of two states. Donations to certain funds are now eligible for a 100% tax deduction. Surcharge rates on companies were increased. For indirect taxes, excise duty rates were increased slightly and education cess exempted. Service tax rates were increased to 14% and a new Swachh Bharat cess of 2% was introduced. Customs duty was reduced on some imports. International tax changes include a reduced 10% tax rate on foreign royalty and technical fees. GAAR provisions were deferred and tax benefits

1. DIRECT TAX
There is no change in the rate of income-tax for
partnership firms, domestic company and
foreign company for the F.Y 2015-16 (A.Y 2016-
17).
Increased in rate of additional depreciation from
20% to 35% for manufacturing undertaking or
enterprise which is set up in the notified
backward area of the State of Andhra Pradesh or
the State of Telangana on or after the 1st day of
April, 2015.
Donation made to National Fund for Control of
Drug Abuse (NFCDA) shall be eligible for 100%
deduction under section 80G
Rigorous money laundering provisions
Budget Highlights with Taxpert Professionals
DIRECT TAX
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Surcharge in the case of domestic companies having income
exceeding “1” crore and upto “10” crore is proposed to be levied @
7% and surcharge @ 12% is proposed to be levied on domestic
companies having income exceeding “10” crore
Carried forward of Additional depreciation u/s 32(ii)(a) of
remaining 10% for the assets acquired and installed after 30th
September of the previous year to subsequent previous year.
Donations (other than the CSR contributions u/s 135 of the
Companies Act, 2013) made to Swachch Bharat Kosh (by both
resident and non-resident) and Clean Ganga Fund (by resident)
shall be eligible for 100% deduction under section 80G.
The eligibility threshold of minimum 100 workmen is proposed is to
reduced to fifty u/s 80JJAA.
SALARIED
There is no change in the rate of income-tax for Individual, HUF,
AOPs, BOIs, artificial juridical persons in respect of income earned
in the F.Y 2015-16 (A.Y 2016-17).
(NPS) from Rs. 1,00,000/- to Rs. 1,50,000/- under Section 80CCD
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A surcharge @12% is levied on individuals, HUFs, AOPs, BOIs,
having income exceeding Rs. 1 crore and Education Cess and
Secondary and Higher Education Cess shall continue to be
levied at the rate of two per cent and one per cent
respectively.
Transport Allowance limit increased from Rs. 800 pm to Rs.
1,600 pm
Investment in Sukanya Samriddhi Scheme will be eligible for
deduction u/s 80C and interest accruing on such deposits will
be exempt from income tax under section 10(11)
Increase in limit of contribution to Pension funds from Rs.
1,00,000/- to Rs. 1,50,000/- under Section 80CCC
Increase in limit of contribution by the employee to National
Pension Scheme from INR 100,000 to 150000/-
Increase in limit of contribution in Medical Insurance premium
u/s 80D.Deduction for Maintenance including Medical
treatment of a dependent disabled u/s 80DD in respect of
person with severe disability and others has increased from
Rs. 1,00,000 to Rs. 1,25,000 and Rs. 50,000 to 75,000
respectively.
Deduction for Medical treatment of specified diseases or
aliments u/s 80DDB in respect of very Senior Citizen person
has increased from Rs. 60,000 to Rs. 80,000
Deduction under Section 80U in respect of Person with
severe disability and others has ncreased from Rs. 1,00,000 to
Rs. 1,25,000 and Rs. 50,000 to Rs. 75,000 respectively.

2. Budget Highlights with Taxpert Professionals
INDIRECT TAX
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EXCISE:
Standard ad-valorem rate of excise duty proposed to be increased
from the existing 12% to 12.50 %. Education Cess and Secondary &
Higher Education Cess are proposed to be exempted on all goods
falling within the First Schedule to the Central Excise Tariff Act, 1985
Direct dispatch of goods to premises of customers of a registered
dealer/registered importer without bringing the goods to the
registered premises subject to certain conditions
Time-limit for availing CENVAT credit on inputs and input services is
being extended from six months to one year, from the date of invoice
Time-limit for return of capital goods from job worker’s premises
extended from six months to two years.
Online Central Excise Registration can be completed within two
working days. Central excise assesses are being allowed to issue
digitally signed invoices and maintain other records electronically.
Excise duty has been decreased on inputs for use in the manufacture
of LED Drivers and MCPCB for LED Lights, Fixtures and LED lamps from
12% to 6%.
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SERVICE TAX
Effective rate of Service Tax to be increased from the
existing rate of 12.36% to 14%. Education cess and
Secondary & Higher Education cess is proposed to be
subsumed in the said rate from a date to be notified.
Swachh Bharat cess (SB cess) @ 2% on value of all or any
of the taxable services to be levied from a notified date.
Manpower supply services and security services
provided by an individual, HUF, or partnership firm to a
body corporate are being brought under ambit of full
reverse charge against previous partial reverse charge.
CENVAT credit can be taken till one year from the date
of invoice.
Abatement rate for transport of goods by road, rail and
vessel rationalized at 30% on value of services, with
effect from 1 April 2015.
CUSTOMS
Reduction in Basic Customs Duty to
reduce the cost of imported raw
materials
Increase in BCD on few raw-materials
and few products to demotivate their
imports
Reduction in SAD to address the
problem of CENVAT credit
Accumulation on import of certain
raw material.
High Speed Diesel & Motor Spirit
(Petrol) covered under chapter
heading 2710 shall be exempt from
CVD as in excess of the amount
calculated at the rate of Rs. 6/liter.

3. International recognised concept
for determination of residence of a
company incorporated in a foreign
jurisdiction introduced: Presently a
company is resident if it is an
Indian company or the control or
management of its affairs situated
wholly in India. The condition of
control or management changed
with Place of Effective
Management (‘POEM’).
POEM 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.
Budget Highlights with Taxpert Professionals
INTERNATIONAL TAX
Tax rate on royalty and FTS in case of non-residents to be reduced
from 25 per cent to 10 per cent.
No change in Corporate tax rate for FY 2015-16. Wealth Tax
abolished.
Threshold limit for Specified Domestic Transactions subject to transfer
pricing increased to INR 20Cr from 5Cr.
Section 295 amended to enable CBDT to notify rules for giving foreign
tax credit.
Provisions relating to indirect transfer of shares or interest clarified:
 Taxability in India to trigger when value of Indian assets
exceeds INR 10cr. and represent atleast 50 % of value of all
the assets owned by foreign company/ entity.
 Gains to be taxable on proportionate basis
 Provisions of indirect transfer shall not apply in case of
minority shareholding (5 % or less) provided no management
or control exists at any time during last 12 months
 Reporting obligation of the offshore transfer cast on the
Indian concern
 Relaxation of indirect transfer provisions in case of overseas
merger/demerger
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GAAR provisions have been deferred by two years and
shall apply from FY 2017-18. Grandfathering of
investments made upto 31 March 2017.
The limitation date of the benefit of reduced rate of tax
available under section 194LC in respect of external
commercial borrowings extended to 30th June, 2017
No MAT on FIIs on long term capital gains & short term
capital gains (subjected to STT)
Submission of details of remittance to non resident
required in all cases irrespective of chargeability to tax.
Pass through status for Category II Alternative
Investment Funds
Fund manager of an off shore fund in India not to
constitute permanent establishment in India – Subject to
fulfilment of conditions
WEB SOLUTIONS

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