Transcript Slide 1

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NEWSLETTER –MARCH 2013
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INDEX
• Direct Taxation
• Indirect Taxation
• Corporate and Other Laws
• International Trade and Finance
• Statutory Due Dates for March 2013
Newsletter –March 2013
TM
DIRECT TAXATION
Index
Budget Highlights
Personal Taxation
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Tax Slabs and basic tax exemption limits remained unchanged.
A tax credit of Rs. 2,000 to every person with an income of up to Rs. 5 lakh per annum.
Surcharge of 10 % on persons (other than companies) whose taxable income exceeds Rs. 1 crore for only
one year.
Additional one time deduction of Rs 1 Lakh in respect of interest on housing loan not exceeding Rs. 25 lakh
in respect of first house property acquired (not constructed) and valuing upto Rs. 40 Lakh.
Contributions made to schemes of Central and State Governments similar to Central Government Health
Scheme will be eligible for deduction under section 80D of the Income tax Act.
100 % deduction under income tax act on donations made to National Children Fund .
The Deduction under section 80 CCG to be available to a new retail investor being an individual having
gross total income upto Rs. 12 lakh for investment in listed equity shares or units of equity oriented
fund for three consecutive assessment years.
Newsletter – March 2013
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DIRECT TAXATION
Index
Business Taxation
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Commodities Transaction tax to be levied on non-agricultural commodities future contracts at the same rate
as on equity futures and it is to be allowed as a deduction while computing business income.
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Manufacturing companies eligible for investment allowance of 15 % for investment made more than Rs.
100 crore in plant and machinery during the financial year 2013-14 .
•
Eligible date for projects in the power sector to avail benefit under Section 80-IA extended from 31.3.2013
to 31.3.2014.
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Securities Transaction Tax brought down to 0.01 % from 0.017 % .
Corporate Taxation
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Increase in surcharge from 5 % to 10 % on domestic companies whose taxable income exceeds Rs. 10 crore
for only one year .
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Increase in surcharge from 2 % to 5 % on foreign companies paying higher rate of corporate tax, whose
taxable income exceeds Rs. 10 crore for only one year .
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Increase in surcharge from 5 % to 10 % on dividend distribution tax or tax on distributed income for only
one year .
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Concessional tax of 15 % to be continued for one more year on dividend received by an Indian company
from its foreign subsidiary .
Newsletter – March 2013
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DIRECT TAXATION
Index
Corporate Taxation contd…
•
Introduction of additional income tax @ 20% of profits distributed by unlisted companies to shareholders
through buy back of shares .
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Cash donations to political parties and electoral trusts not to be allowed as deduction.
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Securitization Trust to be exempted from Income Tax, however tax to be levied at specified rates only at
the time of distribution of income for companies, individual or HUF etc. No further tax on income
received by investors from the Trust.
•
Investor Protection Fund of depositories exempt from Income-tax in some cases.
Non- resident taxation
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Tax at 5% on income distributed shall be payable in respect of income distributed by an infrastructure
debt fund (whether set up as NBFC or mutual fund) to a Non-resident investor.
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Royalty and technical expertise tax increased from 10 % to 25 %, where DTAA doesn’t apply.
Newsletter – March 2013
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DIRECT TAXATION
Index
TDS and others
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TDS of 1 per cent on land deals worth over Rs. 50 lakh, however agricultural land are exempted.
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TDS is to be calculated at a concessional rate of 5% on interest payable to a non-resident in case of
certain rupee denominated long term infrastructure bonds issued by an Indian company in India.
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Definition of Capital Assets to exclude Agriculture Land.
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Modified GAAR to be implemented from April 2016.
Newsletter – March 2013
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INDIRECT TAXATION
Index
•Service Tax Return for the period 1st July 2012 to 30th September 2012
Vide notification1/2013-Service Tax dated 22nd February 2013, it is notified that data for the remaining portion of
the half year ( i.e 1-7-2012 to 30-9-2012 ) can now be furnished by the assessees in the revised Form ST3. The
last date for filing the return is 25th March 2013.
Newsletter – March 2013
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INDIRECT TAXATION
Index
Budget Highlights
Customs
 Reduction in duty on specified machinery for manufacture of leather and leather goods including
footwear from 7.5 % to 5 %
 Reduction in duty on pre-forms precious and semi-precious stones from 10% to 2 %
 Export duty on de-oiled rice bran oil cake withdrawn
 New duty imposed on export of unprocessed ilmenite @ 10 %
 New duty imposed on export on ungraded ilmenite @ 5 %
 Increase in duty on Set Top Boxes from 5% to 10%
 Increase in duty on raw silk from 5% to 15 %
 Duties on Steam Coal and Bituminous Coal equalized. Custom duty @ 2% and CVD @ 2 % levied
on both kinds coal
 Increase in duty on imported luxury motor vehicles from 75 % to 100 %
 Increase in duty on imported motorcycles with engine capacity of 800cc or more from 60 % to 75 %
 Increase in duty on imported yachts and similar vessels from 10 % to 25 %
 Duty free gold limit increased to Rs. 50,000 in case of male passenger and Rs.1, 00,000 in case of a
female passenger subject to conditions.
Newsletter – March 2013
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INDIRECT TAXATION
Index
Excise
 Relief for readymade garment industry. In case of cotton there will Zero % excise duty at fiber stage.
In case of spun yarn made of manmade fiber, duty of 12 % at the fiber stage.
 Handmade carpets and textile floor coverings of coir and jute totally exempted from excise duty
 Ships and vessels exempted from excise duty. No CVD on imported ships and vessels.
 Increase in specific excise duty on cigarettes, cigars, cheroots and cigarillos by 18 %
 Excise duty on non-taxi SUVs hiked to 30 per cent from 27 per cent
 Excise duty on SUVs increased from 27 % to 30 %
 Excise duty on marble increased from Rs. 30 per square meter to Rs. 60 per square meter
 New duty imposed @ 4 % on silver manufactured from smelting zinc or lead
 Increase in duty from 1 % to 6 % on mobile phones priced at more than Rs. 2000
 MRP based assessment in respect of branded medicaments of Ayurveda, Unani, Siddha, Homeopathy
and bio-chemic systems of medicine to reduce valuation disputes. There will be an abatement of 35
percent
Newsletter – March 2013
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INDIRECT TAXATION
Index
Service tax
 Vocational courses offered by institutes affiliated to the State Council of Vocational Training and
testing activities in relation to agricultural produce included in the negative list for service tax
 Exemption of Service Tax on copyright on cinematography limited to films exhibited in cinema halls.
 Service Tax to be levied on all air conditioned restaurant
 For homes and flats with
1) carpet area of 2,000 sq.ft. or more or
2) value of Rs. 1 crore or more
which are high-end constructions, where the component of services is greater, rate of abatement
reduced from 75 % to 70 %
 A onetime scheme called ‘Voluntary Compliance Encouragement Scheme’ has been proposed to
motivate the registered assesses under service tax to file returns and pay tax dues since 1St October
2007 to avoid interest, penalty and other consequences
Newsletter – March 2013
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INDIRECT TAXATION
•
Index
Industry-wise Budget Impact
Industry
Automoboile
FMCG
Banking and Finance
Budget Impact
3%hike in excise duty for SUVs a big jolt for the
industry. Also import duty on luxury cars increased to
100% from 75%, which will impact in increase in on
road prices of top-end models.
Higher tax on royalties will increase tax outgo of MNCs
operating in FMCG. Excise Duty on cigarettes and cigars
is up by 18% as well as the duty on mobiles costing over
INR 2000 is increased to 6% from 1%, making smart
phones dearer.
Capital Infusion will help PSU banks and support loan
growth. Housing finance companies focusing small size
loans will benefit.
Newsletter – March 2013
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INDIRECT TAXATION
•
Index
Industry-wise Budget Impact
Industry
Real Estate/ Construction
Budget Impact
Higher Fund allocation will trigger greater home
ownerships in rural as well as urban areas. Cost of
housing in metros will go up as an implication of
service tax component has gone up.
Hospitality
Service tax on AC restaurants will lead to lower
revenue growth, as companies will pass on the burden
to consumers reducing their visit frequency.
Textile
Removal of Excise duty on garments, companies will
be able to shave off 3.65 of their cost which will
improve their operative profit margin.
Newsletter – March 2013
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CORPORATE AND OTHER LAWS
Index
• RBI opens doors to broking and real estate firms to set up banks
The Reserve Bank of India on 22nd February 2013 set the stage for entry of new banks in the private sector by
unveiling the much-awaited final guidelines. The central bank appears to have accommodated the Government’s
viewpoint and reversed the stand it had taken in the draft guidelines of not allowing broking and real-estate
companies in the banking space. The RBI said entities in the private sector, public sector and non-banking finance
companies (NBFCs) will be eligible to set up a bank. Eligible NBFCs could be permitted to promote a new bank
or convert themselves into banks. Eligible promoters will have to make an application to the RBI by July 1, 2013.
Newsletter – March 2013
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INTERNATIONAL TRDAE AND FINANCE
Index
•Budget Impact
The Union Budget contains a slew of measures to reduce bottlenecks faced by FIIs and mutual funds. The
Budget tries to make it easier for foreign investors such as central banks, university endowments, pension funds
to invest in India by proposing uniform KYC norms. It has also allowed portfolio investors to use their
investment in corporate bonds and government securities as collateral to meet their margin requirements, thus
freeing up their resources. Also distinction has been introduced in FII and FDI.
Newsletter – March 2013
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STATUTORY DUE DATES FOR FEBRUARY 2013
•Statutory Due Dates Calendar for March 2013
Due Date
Statutory Compliance
5th March 2013
Payment of Service Tax/ Excise duty
7th March 2013
Payment of TDS
15th March 2013
Payment of Provident Fund contribution/
Profession Tax
15th March 2013
Payment of Advance Income Tax
21st March 2013
Payment of ESIC/ MVAT
Newsletter – March 2013
Index
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Newsletter –March 2013