The Union Budget 2017 was laid before the Parliament today by the Hon’ble Finance Minister of India. The salient features for Ease of doing business in India are summarized below:
1. Domestic transfer pricing to be applied only if one of the two companies enjoys specified profit-linked deduction.
2. The audit limit for business entities opting for the presumptive scheme to be increased from Rs.1 crore to Rs.2 crore.
3. Individuals and HUFs not required to keep books of accounts if their turnover is up to Rs.25 lakhs or income is up to Rs.2.5 lakhs.
4. Investment in Category 1 and 2 foreign portfolio investors registered with SEBI to be exempted from provisions of indirect transfer.
5. TDS of 5% not to be deducted for individual insurance agents if they certify their income to be below taxable limit.
6. Professionals in presumptive scheme to pay advance tax only in one installment in March instead of four.
7. The time limit for revising a tax return reduced to 12 months. Also, the time limit for completion of scrutiny will be brought down to 12 months from Assessment Year 2019-20 onwards.
1. Concessional withholding rate of 5 per cent. for interest received by foreign entities on loans given in India to be continued for another 3 years beyond 30.6.2017.
2. Start-ups to get two relaxations under the scheme of Income Tax holiday given last year.
- The condition of the continuous holding of 51 per cent. voting rights to be relaxed as long as the original investment of promoter is not diluted.
- Exemption available for three years out of any 7 years from the date of establishment instead of 3 out of 5 years
3. The period of carrying forward of MAT/AMT credit increased from 10 years to 15 years.
4. The corporate income tax to be reduced from 30% to 25% for companies with turnover up to Rs.50 crore in 2015-16. This will benefit 96% of existing 6.67 lakh companies. This will result in the tax saving of 16.67% for these companies.
5. Deduction for provision for NPA of Banks to be increased from to 8.5% instead of 7.5% of profit.
6. In the case of NPA of non-scheduled cooperative banks, interest to be recognized as income only when received.
Ease of Doing Business:
1. Domestic transfer pricing to be applied only if one of the two companies enjoys specified profit-linked deduction.
2. The audit limit for business entities opting for the presumptive scheme to be increased from Rs.1 crore to Rs.2 crore.
3. Individuals and HUFs not required to keep books of accounts if their turnover is up to Rs.25 lakhs or income is up to Rs.2.5 lakhs.
4. Investment in Category 1 and 2 foreign portfolio investors registered with SEBI to be exempted from provisions of indirect transfer.
5. TDS of 5% not to be deducted for individual insurance agents if they certify their income to be below taxable limit.
6. Professionals in presumptive scheme to pay advance tax only in one installment in March instead of four.
7. The time limit for revising a tax return reduced to 12 months. Also, the time limit for completion of scrutiny will be brought down to 12 months from Assessment Year 2019-20 onwards.
Measures for stimulating growth:
1. Concessional withholding rate of 5 per cent. for interest received by foreign entities on loans given in India to be continued for another 3 years beyond 30.6.2017.
2. Start-ups to get two relaxations under the scheme of Income Tax holiday given last year.
- The condition of the continuous holding of 51 per cent. voting rights to be relaxed as long as the original investment of promoter is not diluted.
- Exemption available for three years out of any 7 years from the date of establishment instead of 3 out of 5 years
3. The period of carrying forward of MAT/AMT credit increased from 10 years to 15 years.
4. The corporate income tax to be reduced from 30% to 25% for companies with turnover up to Rs.50 crore in 2015-16. This will benefit 96% of existing 6.67 lakh companies. This will result in the tax saving of 16.67% for these companies.
5. Deduction for provision for NPA of Banks to be increased from to 8.5% instead of 7.5% of profit.
6. In the case of NPA of non-scheduled cooperative banks, interest to be recognized as income only when received.
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