Finance Budget, Budget 2016, Arun Jaitley, Income Tax India, Service Tax India, Excise India, Snapshot, Key Highlights, Overview

1. ABHISHEK MURALI AND DIVYA ABHISHEK
PRESENT
BUDGET’16 –TAX
HIGHLIGHTS
Snapshot before Detailed Analysis
© Abhishek Murali and Divya Sukumar

2. KeyTax Highlights of Budget 2016 (1/2)
• Voluntary Disclosure Scheme – Limited tax compliance window to declare undisclosed incomes at 45%
including surcharge and penalties between 1st June, 2016 to 30th September, 2016
• Companies with revenue less than Rs. 5 crore to be taxed at 29% plus surcharge
• Service tax to be increased by 0.5% as Krishi Kalyan Cess to be levied
• 1% surcharge to be collected at source (TCS) on purchase of luxury cars of over Rs.10 lacs and in cash
purchase of goods and services of Rs.2 lakhs
• SUVs, Luxury cars to be more expensive. 4% high capacity tax for SUVs
• Pollution cess of 1 per cent on small petrol, LPG and CNG cars; 2.5 per cent on diesel cars of certain
specifications; 4 per cent on higher-end models
• Excise 1 per cent imposed on articles of jewellery, excluding silver
• New manufacturing companies from March 1 2016 to be taxed at 25% plus cess plus surcharge. No further
exemptions for new companies if taxed at the 25% rate
• Service tax exemption for construction of affordable housing up to 60 sq. m
• LTCG period for unlisted companies reduced to 2 years
© Abhishek Murali and Divya Sukumar

3. KeyTax Highlights of Budget 2016 (2/2)
• Deduction for rent paid will be raised from Rs.20,000 to Rs.60,000 to benefit those living in rented houses
• Dividend in excess of Rs.10 lakhs per annum to be taxed at 10%
• Income tax slabs remain unchanged.Tax deduction u/s 87A increased to Rs.5000
• Additional exemption of Rs.50,000 for housing loans up to Rs.35 lakh, provided cost of house is not above
Rs.50 lakh
• Upto 40% withdrawn from Super Annuation funds to be tax exempt
• Surcharge in income > Rs.1 crore increased to 15% from 12%
• Government will pay EPF contribution of 8.33% for all new employees for the first 3 years
• Start-ups to get 100% tax exemption for 3 years. MAT still applicable
• Limit for presumptive taxation increased from Rs.1 crore to Rs.2 crore u/s 44AD. New norms for
presumptive taxation for professionals brought with receipts upto Rs.50 lakhs
• Accelerated depreciation limited to 40%
• Penalty on IncomeTax – 50% for underreporting income, 200% for misreporting of facts
© Abhishek Murali and Divya Sukumar