Amendments Applicable for Assessment Year 2017-18 ( Financial Year 2016-17), TDS Rate Chart, Budget changes



FY 2016-17 AY 2017-18





TDS Rate chart for  FY 2015-16





Income Tax Slabs



Presumptive tax



Cost Inflation Index for Capital Gains





Medical Insurance


Donations



80JJAA


Difference in advance tax schedule of Companies and Individuals removed
The current advance tax payment schedule for a company is 15%, 45%, 75% and 100% (cumulative) of income tax payable on the full financial year's income to be paid by 15th June, 15th September, 15th December and 15th March, respectively. 

Till last financial year, individuals liable to pay advance tax, had to pay 30%, 60% and 100% (cumulatively) of tax payable on the full fiscal's income by 15th September, 15th December and 15th March, respectively. An individual with a tax liability of Rs 10,000 or or more in a financial year is required to pay advance tax in that year as per current income tax law. Budget 2016 has replaced the separate advance tax payment schedule for individuals with the same schedule as applicable to companies. 



Computation of Advance tax




 Applicability of Advance Tax requirements in MAT Cases
With the introduction of section 115JB ,clarity on the issue of advance tax was brought in by by CBDT which issued circular saying that the advance tax is applicable and so also section 234B & 234 C for MAT payment for section 115JB.


Example of Advance tax default which cannot be avoided : in case estimated income keeps increasing every quarter





Tax on Receipt of Dividend


Residential Status



Service Tax


Service Tax Reverse Mechanism



Summary of Indirect Taxes Amendments
 





🌲Finance Act Changes applicable from *1/6/16*


👉Electronic Hearing under Income Tax law enabled
👉Document required to be issued by an Income Tax Authority can be issued in paper form or communicated in electronic form
👉Equalization Levy @ 6% on _online digital advertisement and incidental services_ or provision of digital advertising space
👉TCS @ 1% on luxury vehicles and cash sale of goods or provision of services
👉Exit Tax for Charitable Institutions
👉Non resident not having PAN shall not be subjected to 20% TDS
👉Jurisdiction of Assessing Officer not to questioned in serach cases after one month from notice u/s 153A
👉Non Corporate assessee also to pay advance tax , _15% by 15th June . 45% by 15th Sep, 75% by 15th Dec and 100% by 15th March_
_👉In case of presumptive Income 100% advance tax to be paid by 15th March_
👉Application for Waiver of Interest u/s 220(2A) to be disposed off with in one year
👉Interest under section 234C shall not be chargeable in case of an assessee having income under the head "Profits and gains of business or profession" for the first time,
_👉 Interest on Refund for timely filed return to be allowed from 1st April but interest on refund for belated return to be allowed from date of furnishing of return_
_👉 Interest on refund of self assessment tax to be allowed from date of filing of return or payment of tax, whichever is later._
_👉No Interest to be allowed if refund is lesser than 10% of determined tax_
👉Additional 3% Interest for Appeal Effect delayed beyond 3 months
👉In ITAT post of Sr Vice President abolished
👉Rectification period of ITAT orders limited from 4 years to 6 months
👉Monetary limit for Hearing of appeal by SMC in ITAT raised from 15 lacs to 50 lacs u/s 255(3)
👉Time Limit for completion of assessments reduced from 24 months to 21 months . Assessments to be complted by 31st December.
👉Order for appeal effect to be passed with in 3 months from the end of month in which appeal order is received
👉Limit of Rs. 5000/- for Winnings from Horse Races enhanced to Rs. 10,000/-
_👉For TDS on payment to Contractors Aggregate Annual Limit of Rs. 75000/- increased to Rs 100000/-_
👉Monetary Limit of Rs. 20,000/- for TDS on Insurance Commission u/s 194D reduced to Rs. 15000
_👉Monetary Limit for TDS on Commission u/s 194H enhanced from Rs. 5000/- to Rs. 15000/- and rate reduced from 10% to 5% to bring parity with Insurance Commission._
👉Monetary Limit for TDS on Commission on Lottery Tickets u/s 194G enhanced from Rs. 1000/- to Rs. 15000/- and rate reduced from 10% to 5% to bring parity with Insurance and other Commission
👉TDS rate on withdrawl of NSS Deposits reduced from 20% to 10% u/s 194EE
👉TDS on LIC Maturities exceeding Rs. 1,00,000/- not exempt u/s 10(10D) was charged @2% by Finance Act 2014 wef 01-10-2014 . TDS rate lowered to 1%.
👉TDS @10% for compulsory acquisition of immovable property other than agriculture land where aggregate payments during financial year exceed Rs. 2 lacs now enhanced to Rs 2.50 lacs.
_👉Form 15G/15H enabled for rental payments also_
👉The Direct Tax Dispute Resolution Scheme for immunity from post assessment interest, penalty and prosecution for cases pending before CITA on 29-02-2016 [Scheme Available up to 31st December]
👉The Income Declaration Scheme 2016. Tax, Surcharge and Penalty @ 45% of Undisclosed Income. Declaration to be filed till 30th September. Tax etc to be paid till 30th November.






 CHECKLIST FOR STATUTORY COMPLIANCES
















Due Date for Filing Return

Typically, the deadline for filing income tax return of the previous financial year is July 31/Sep 30 / Oct 31. In case a person missed the deadline, he was allowed to file a late income tax return within two financial years from the end of the relevant tax year.
But Budget 2016 has proposed a change and the window for filing late return has been reduced from two years to one year.
"As per the amendments proposed in the Finance Bill 2016, the time allowed for filing a return of income has been reduced from two years to one year from the end of the financial year to which the return pertains to," says Amit Maheshwari, managing partner, Ashok Maheshwary & Associates.
 
This new rule will be applicable from April 2017, meaning that for the financial year starting April 2016, you will be able to file late income tax return by March 2018, instead of March 2019 earlier.

Also, according to the Finance Bill, one can revise the late income tax return, which was not allowed earlier. Before this change, late return was considered final return and filers were not allowed to make any changes in it. Now a person can revise the return in case of any omission or wrong statement within two years from the end of the financial year to which the return pertains to.

However, certain drawbacks of filing a late return still remain. If you are filing a late return and there was any tax payable, you will have to pay an interest at the rate of 1 per cent per month up to the date of filing of the return.
 
Also, in case of late return, you can't carry forward your capital losses to next years. Generally, a person can carry forward the capital loss for a financial year to next eight years to set them off with capital gains.
One can claim tax refunds by filing a late income tax return but one will lose on the interest component. "The interest on refund would be payable from the date of filing the return. Which means you lose interest from the start of the assessment year to date of filing of belated return," 


Time Limits for Issuance of Notices, Orders under Different Sections of Income Tax Act, 1961
Income Tax Act, 1961 contains different time limits for issuance of notice, filing of application, completion of assessments, passing of penalty order under several sections.

Sl. No.
Section
Activity
Time Limit
Remarks
1
Sec 142(1)(i)
Notice requiring assessee to furnish return.
If assessee has not furnished ROI within time prescribed under Sec 139(1), then AO MAY issue notice requiring assessee to furnish return within time prescribed in notice. This notice can also be issued after the end of relevant Assessmeny Year.
If Assessee fails to repond to notice issued u/s 142(1)(i), than AO can make Best Judgemnt Assessment u/s 144.
2
Sec 142(2A)
Special Audit
At any Stage of proceedings pending before AO, notice for SPECIAL AUDIT can be issued, but not after completion of proceedings. Aggregate time period of furnishing report post extension, if any granted by AO shall not exceed 180 days from the original date of direction received by the assessee. AO to consider nature and complexity of the accounts, volume of accounts, doubts about correctness of accounts, multiplicity of transactions in the accounts or specialised nature of business activity of the assessee and interest of the Revenue.
No Appeal can be filed against direction for audit , only WRIT PETITION and thereafter SPECIAL LEAVE PETITION.
3
Sec 143(1)
Intimation of Return
No intimation shall be sent to assessee under Sub-Section 143(1) after the expiry of 1 year from the end of financial year in which return is made.
Acknowledgement (ITR V) shall be deemed as Intimation in case where no sum is payable, refundable and where no adjustment has been made u/s 143(1).
4
Sec 143(2)
Notice for making Scrutiny Assessment under Sec 143(3)
No notice under Section 143(2) shall be served on the assessee after the expiry of 6 months from the end of financial year in which return is furnished.
Notice under this section can only be made, when assessee has filed ROI.
5
Sec 153
Time limit for making Assessment Order under Sec 143(3)
No order of assessment/ reassessment under section 143(3) shall be made after the expiry of 2 years from the end of relevant Assessment Year.
Where a reference has been made to Transfer Pricing Officer to determine Arm’s Length Price, then 3 years from the end of relevant Assessment Year.
6
Sec 153
Time limit for making Assessment Order under Sec 144
No order of assessment/ reassessment under section 144 shall be made after the expiry of 2 years from the end of relevant Assessment Year.
No SCN is required to be issued, where a notice under Sec 142(1)(i) has already been issued to the assessee and the same has not been complied with.
Where a reference has been made to Transfer Pricing Officer to determine Arm’s Length Price, then 3 years from the end of relevant Assessment Year.
7
Sec 149
Time Limit for issue of notice under Sec 148
No notice under Section 148 shall be issued for the relevant Assessment Year:
(a) If 4 years have lapsed from the end of relevant assessment year, unless the case falls under following two categories;
(b) If 4 years, but not more than 6 years, have elapsed from the end of relevant assessment year unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to Rs. 1 Lac or more for that year;
(c) If 4 years, but not more than 16 years, have elapsed from the end of relevant assessment year unless the income in relation toi any asset (including financial interest in any entity) located outside India, chargeable to tax, has escapsed assessment.
Mere signing of of notice cannot tantamount to issuance of notice as contemplated under Sec 149. The date of issue would be the date on which notice was handed over to the proper officer for the purpose of effecting service on the assessee.
8
Sec 149(3)
Time Limit for issue of notice under Sec 148 to the agent of Non Resident
No notice under Sec 148 shall be issued on agent of Non Resident after the expiry of 6 years from the end of relevant assessment year.
AO appoint can appoint a person in India as the agent of Non Resident by passing an Order under Sec 163(1). Appeal lies to CIT(A) against such Order.
9
Sec 150
No Time limit for issuance of notice under Sec 148
Notice under Sec 148 can be issued at any time for the purpose of making assessment or reassessment under Sec 147 in consequence of or in order to give effect to the finding or direction contained in an order of Supreme Court passed under Sec 262.
But to give effect of retrospective amendments through Finance Acts, Notices under Sec 148 can be issued within the time limits prescribed under Sec 149(1). Sec 150 shall not apply in such cases.
Notice under Sec 148 can be issued at any time for the purpose of making assessment or reassessment under Sec 147 in consequence of or in order to give effect to the finding or direction contained in an order passed under Sec 250, 254, 263, 264.
10
Sec 148
Time limit for issuance of Notice under Sec 143(2) in response to Returns filed under Sec 148
In response to returns filed under Sec 148 notice, the notice under Sec 143(2) must be served within 6 months from the end of financial year in which return was filed, otherwise assessment/ assessment under Sec 147 shallbe void.
If assessee demands the reasons recorded by AO for issue of notice, AO is bound to supply in writing, otherwise AO cannot proceed for assessment.
11
Sec 153(2)
Order of assessment/ reassessment u/s 147
No order of assessment/ reassessment u/s 147 shall be made after the expiry of 1 year from the end of financial year in which notice u/s 148 was served on the assessee.
Where a reference has been made to Transfer Pricing Officer to determine Arm’s Length Price, then 2 years from the end of the financial year in which notice u/s 148 was served.
12
Sec 153(2A)
Time limit for completion of Fresh assessment where original assessment was cancelled or set aside under Sec 254(ITAT), 263 or 264(CIT)
Where an assessment is cancelled or set aside by an order under section 254, 263 or 264 and a direction is given to the AO in such Order to make a fresh assessment, then such fresh assessment shall not be made after the expiry of 1 year from the end of financial year in which order u/s 254 received by CIT or Order u/s 263 or 264 is passed by the CIT.
Where a reference has been made to Transfer Pricing Officer to determine Arm’s Length Price, then 2 years from the end of financial year in which order u/s 254 is received by the CIT or u/s 263 or 264 was passed by the CIT.
13
Sec 153(3)(a)
No Time limit for completion of assessment or reassessment
In case assessment is not cancelled/set aside but a direction is given u/s 250, 254, 263 or 264 as a result of which income of any assessment year escapes assessment, then there is no time limit for making assessment/ reassessment .
Also applicable , where in case of a firm, an assessment is made on the partner of the firm in consequence of an assessment or reassessment made on the firm u/s 147.
14
Sec 154
Rectification of Mistake
No order of rectification shall be passed after expiry of 4 years from the end of the financial year in which the order sought to be amended was passed.
Income Tax Authority referred to in Sec 116 may amend any order passed by it, any intimation or deemed intimation u/s 143(1) or amend any intimation passed u/s 200A.
15
Sec 154
Rectification of Mistake
Where an application for rectification is made by the assessee to Income Tax Authority, then authority shall pass an order within 6 months from the end of the month in which application is received by it.
If order is not passed within 6 months, then the recification application shall be deemed to be allowed in favour of assessee.
16
Sec 153B
Time limit for completion of assessment u/s 153A
AO shall make an order of assessment/ reassessment, as follows:
(a) in respect of each assessment year falling within 6 assessment years referred to in clause (b) of Sec 153A, within a period of 2 years from the end of the financial year in which search was completed.
(b) in respect of the assessment year relevant to the previous year in which search is conducted under Sec 132, within a period of 2 years from the end of the financial year in which search was completed.
Where a reference has been made to Transfer Pricing Officer to determine Arm’s Length Price, then 3 years from the end of financial year in which search was completed.
17
Sec 153C
Time limit for completion of assessment u/s 153A in case of other person referred u/s 153C
AO shall make an order of assessment/ reassessment, as follows:
(a) (i) in respect of each assessment year falling within 6 assessment years referred to in clause (b) of Sec 153A, within a period of 2 years from the end of the financial year in which search was completed;
(ii) 1 year from the end of the financial year in which books of accounts, assets are handled over u/s 153C to the AO having jurisdiction over such other person; which ever is later.
(b) (i) in respect of the assessment year relevant to the previous year in which search is conducted under Sec 132, within a period of 2 years from the end of the financial year in which search was completed.
(ii) 1 year from the end of the financial year in which books of accounts, assets are handled over u/s 153C to the AO having jurisdiction over such other person; which ever is later.
Where a reference has been made to Transfer Pricing Officer to determine Arm’s Length Price, then the said period gets extended by 1 year under both cases.
18
Sec 153(4)
Time limit for completion of Assessment/ Reassessment which revives u/s 153A(2)
Notwithstanding the time limits for making assessments/ reassessments under Sec 143(3)/ 144/147 given in Sec 153 and notwithstanding the time limits given in Sec 153B, the order of assessment or reassessment relating to any AY, which stands revived u/s 153A(2) shall be made;
(a) within 1 year from the end of the month of such revival, or
(b) within the time period specified in Sec 153;
(c) within the time period specified in Sec 153B; whichever is later.
Revival takes place on the date of receipt of order of annulment by CIT
19
Sec 245D (4A)
Time limit for passing Order of Settlement Commission
The Settlement Commission shall pass an order of Settlement u/s 245D(4), within 18 months from the end of month in which application was made.
When no Order is made by Settlement within 18 months, the proceedings shall abate u/s 245HA.
20
Sec 245D(6B)
Rectification of Mistake apparent from record by Settlement Commission
The Settlement Commission MAY at any time within a period of 6 months from the date of the Order, with a view to rectify any mistake apparent from the record, amend any order passed by it.
Where an amendment has the effect of modifying the liability of applicant, no such amendment order shall be passed unless opportunity of being heard is given to the applicant anf Commissioner.
21
Sec 245D(7)
Revival of proceedings, when Settlement becomes Void
If Settlement becomes void, the Income Tax proceedings in respect of matters covered by settlement shall be deemed to have been revived and Income Tax Authority can complete such proceedings at any time before the expiry of 2 years from the end of financial year in which the settlement became Void.
Settlement becomes Void if it has been obtained by fraud or misrepresentation of facts.
22
Sec 245HA
Abatement of Proceedings before Settlement Commission
Proceedings before Settlement Commission shall abate:
(i) Where an application made under Sec 245C has been rejected u/s 245D(1)—(To be rejected within 7 days maxi).
(ii) Where an application made under Sec 245C has been declared as invalid u/s 245D(2C)—(To be declared as invalid maxi within 45 days of receipt of application).
(iii) In respect of any other application–when Settlement Order was not passed within the time specified u/s 245D(4A)—(To be passed within 18 months from the end of the month in which settlement application was received).
The application shall abate on:
(i) On the date the application was rejected;
(ii) On the last date of the month in which application declared invalid;
(iii) On the date on which prescribed time expires, respectively.
23
Sec 245HA
Time limit to complete assessment in case Settlement abates u/s 245HA
Period from date of application of Settlement Commission till date of its abatement shall be excluded for determining period of limitation.
After excluding the period from date of application of Settlement Commission till date of its abatement, if period of limitation available to AO u/s 149 and 153 becomes less then 1 year, then it shall be deemed to have been extended to 1 year.
24
Sec 273A
CIT possess the power to reduce the penalty imposed or imposable u/s 271(1) (c)
There is no time limit for making an application u/s 273A and also, there is no time limit for passing an order u/s 273A.
CIT can exercise power u/s 273A even of assessee has challenged the penalty order in any appellate proceedings or before any court.
CIT can reduce/ waive penalty even if paid, through refund.
25
Sec 275
Time limit for passing of Penalty Order in case of Concealment of Income
(A) Where an appeal has been filed against the assessment order to CIT(A) or ITAT;
(i) Where order is passed by the CIT(A) and no appeal is made to ITAT—1 year from the end of financial year in which order of CIT(A) is received by the CIT.
(ii) Where Order is passed by the ITAT—6 months from the end of the month in which order of ITAT is received by the CIT.
(B) Where Revision application has been made u/s 264—6 months from the end of the month in which revision order u/s 264 is passed.
(C) Where no appeal has been filed against the assessment order and no application made for revision u/s 264, later of;
(i) End of the financial year in which assessment proceedings are completed; or
(ii) 6 months from the end of the month in which penalty proceedings are initiated.
Penalty order for other than Concealment of Income can be passed within 6 months from the end of the month in which penalty proceedings were initiated.
26
Sec 281B
Provisional Attachment of Property to protect interest of the Revenue
AO can provisonally attach by an order in writing, property belonging to the assessee but with the prior approval of CCIT or CIT for a period of 6 months. However, CCIT, CIT, DG, D for reasons to be recorded in writing extend the aforesaid period further as he thinks fit.
But the total period of extension shall not in any case exceed 2 years or 60 days after the date of order of assessment / reassessment, whichever is later.
27
Sec 285
Submission of Statement by a Non Resident having Liason office
Every person being Non resident having a liason office in India set up in accordance with the guidelines issued by the RBI under FEMA,1999 shall, in respect of its activities in a financial year, prepare and deliver to the respective AO, within 60 days from the end of such financial year.
Format and content of statement shall be as prescribed.
28
Sec 249
Time limit for filing appeal to CIT(A)
The appeal shall be furnished within 30 days of the following date:
(a) Where appeal is u/s 248, the date of payment of tax.
(b) Where the appeal relates to any assessment or penalty, the date of service of notice of demand relating to the assessment or penalty.
(c) In any other case, the date on which the order sought to be appealed is served.
Condonation of delay possible, otherwise remedy available is Sec 264[CIT]
29
Sec 250
Time limit for issue of Order by CIT(A)
Where it is possible CIT(A), MAY hear and decide the appeal withina period of 1 year from the end of financial in which such appeal is filed before him under Sec 246A.
This is not mandatory, its directory for CIT(A).
CIT(A) cannot set aside assessment & ask AO to make fresh assessment im its direction.
30
Sec 254
Order of Stay by ITAT
ITAT may after considering the merits of the application made by the assessee, pass an order of stay in any proceedings relating to an appeal filed under Sec 253, for a period not exceeding 180 days from the date of such order and the Appellate Tribunal shall dispose of the appeal within the said period os stay specified in that order.
Provided that when appeal is not so disposed off in within said period, ITAT may on an application made in this behalf by the assessee and on being satisfied that the delay in disposing of the appeal is not attributable to the assessee, extend the period of stay. However, the aggregate period of stay shall not exceed 365 days.
If appeal is not disposed within time allowed, maxi period of 365 days then the order of stay shall stand vacated after the expiry of such period, even if delay in disposing of the appeal is not attributabe to the assessee.
31
Sec 253
Time limit for filing appeal to ITAT
The appeal to ITAT shall be filed within 60 days of the date on which the order sought to be appealed against is communicated to the assessee or to the CIT, as the case may be.
Other party to file Memorandum of cross Objections to the ITAT within 30 days in Form 36A.
32
Sec 254
Time limit for issuance of Order by ITAT
Where it is possible ITAT, MAY hear and decide the appeal within a period of 4 years from the end of financial in which such appeal is filed before him under Sec 253.
This time limit is not mandatory, its directory for ITAT.
33
Sec 254(2)
Rectification of mistake by ITAT
The ITAT may, at any time within 4 years from the date of the order, with a view to rectify any mistake apparent from the record, amend any order passed by it u/s 254(1).
If application for rectification is made within 4 years, then rectification order can be passed u/s 254(2), even after 4 years but to the advantage of the assessee.
34
Sec 260A
Appeal to High Court
The CIT or the assessee aggrieved by an order passed by the Appellate Tribunal may file an appeal to the High Court, within 120 days from the date on which the order appealed against is received by the CIT or the assessee.
Needs substantial question of law; can condone the delay on sufficient cause.
35
Sec 263
Revision Order by CIT u/s 263
The Order u/s 263 shall not be passed after the expiry of 2 years from the end of the financial year in which order sought to be revised was passed. However, an order this secton can be passed at any time to give effect to the findings or directions contained in an order of the Supreme Court.
Against order passed u/s 263 an appeal can be filed to ITAT.
36
Sec 264
Revision application u/s 264
CIT cannot on his own motion revise any order if the order has been made more than 1 year previously, but where an application is made by the assessee, the application shall filed within 1 year from the date on which the order was communicated to him.
CIT shall not revise the order:
(i) Where an appeal against the order lies to the CIT(A) but has not been made and;
(a) The time within which such as appeal may be made has not expired;
(b) The assessee has not waived his right of appeal.
(ii) Where the order has been made the subject of an appeal to the CIT(A).
37
Sec 264
Revision Order by CIT u/s 264
On receipt of revision application by the assessee u/s 264, an order shall be passed by the CIT within 1 year from the end of financial year in which such application u/s 264 is made by the assesee. No appeal is possible against such order, only remedy available is WRIT PETITION or SLP.
In case of application, if revision order is not passed u/s 264 within 1 year from the end of financial year in which such application u/s 264 is made by the assesee, then it shall be deemed that the reliefs claimed by the assessee in the application have been allowed.
38
Sec 92CA
Reference to Transfer Pricing Officer
Where a reference has been made under sub-section (1) of Sec 92CA to the Transfer Pricing Officer, an order under Sub-section (3) may be made at any time before 60 days prior to the date on which the period of limitation referred to in Sec 153 or 153B expires.
Determination of ALP, previous approval of CIT is required
39
Sec 92CC
Advance Pricing Agreement —Time limit if agreement becomes Void
Agreement becomes void if obtained through fraud or misrepresentation of facts. If period of limitation after excluding the period from date of agreement till date of declaring it Void, is less then 60 days then the remaning period shall be extended to 60 days accordingly.
APA is binding for a period not exceeding 5 consecutive years
40
Sec 92CD
Time limit for completion of assessment in case APA is applicable for the years for which Returns were already filed
Notwithstanding anything contained in Sec 153 or 153B or Sec 144C(DRP);
(a) The order of assessment, reassessment or recomputation of total income u/ss (3) of Sec 92CD shall be passed within a period of 1 year from the end of the financial year in which the modified return u/ss (1) is furnished;
(b) The period of limitation as provided in Sec 153 or 153B or Sec 144C(DRP) for completion of pending assessment or reassessment proceedings referred to in sub-sec (4) shall be extended by a period of 12 months.
The APA is final, no appeal is possible to CIT(A). CIT cannot reopen under Sec 263, also AO cannot reopen under Sec 147.
41
Sec 144C
Dispute Resolution Panel
Notwithstanding anything contained in Sec 153 or 153B, AO shall pass the assessment order u/ss (3) within 1 month from the end of the month in which,-
(a) The acceptance is received; or
(b) The period of filing of objecions u/ss (2) expires—(Within 30 days of receipt of draft order).
AO to forward of the proposed order od assessment to the eligible assessee if he proposes to make any variation in the income or loss returned which is prejudicial to the interest of the such assessee.
42
Sec 144C
Issue of directions to AO, on receipt of Objections from eligible assessee
No direction shall be issued after 9 months from the end of the month in which the draft order is forwarded to the eligible assessee.
No direction unles opportunity of being heard is given to the assessee and AO, where such directions are prejudicial to the interest of assessee or revenue, respectively.
43
Sec 144C
Time limit for completion of assessment on receipt of Directions from DRP
Upon receipt of directions, AO shall in confirmity of such directions, complete the assessment without providing any further opportunity of being heard to the assessee, within 1 month from the end of the month in which such direction is received.
Appeal against such order lies to ITAT


 Budget 2015Assessment Year 2016-17 ( Financial Year 2015-16)

Direct Taxes
2.         Rates of tax
2.1       It is proposed that there will be no change in the rate of personal income-tax and the rate of tax for companies in respect of income earned in the financial year 2015-16, assessable in the assessment year 2016-17.
2.2       It is further proposed to levy a surcharge @12% on individuals, HUFs, AOPs, BOIs, artificial juridical persons, firms, cooperative societies and local authorities having income exceeding ` 1 crore.  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.
2.3       It is further proposed that in the case of foreign companies the surcharge will continue to be levied @2% if the income exceeds ` 1 crore and is upto ` 10 crore, and @5% if the income exceeds ` 10 crore.
2.4       It is also proposed to levy a surcharge @12% as against current rate of 10% on additional income-tax payable by companies on distribution of dividends and buyback of shares, or by mutual funds and securitisation trusts on distribution of income.
2.5       The education cess on income-tax @ 2% for fulfilment of the commitment of the Government to provide and finance universalised quality based education and 1% of additional surcharge called ‘Secondary and  Higher Education Cess’ on tax and surcharge is proposed to be continued for the financial year 2015-16 for all taxpayers.

 Benefits to  taxpayers
With a view to encourage savings and to promote health care among individual taxpayers, a number of measures are proposed to be taken by way of incentives under the Income-tax Act.  The same are enumerated below:-
7.1       It is proposed to provide that investment in Sukanya Samriddhi Scheme will be eligible for deduction u/s 80C and any payment from the scheme shall not be liable to tax.
7.2       It is proposed to increase the limit of deduction u/s 80D of the Income-tax Act from ` 15,000 to ` 25,000 on health insurance premium (in case of senior citizen from ` 20,000 to ` 30,000). It is also proposed to allow deduction of expenditure of similar amount in case of a very senior citizen not eligible to take health insurance.
7.3       It is proposed to increase the limit of deduction in case of very senior citizens u/s 80DDB of the Income-tax Act on expenditure on account of specified diseases from ` 60,000 to ` 80,000.
7.4       It is proposed to increase the limit of deduction u/s 80DD of the Income-tax Act in respect of maintenance, including medical treatment of a dependant who is a person with disability, from ` 50,000 to `75,000.  It is also proposed to increase the limit of deduction from ` 1 lakh to `1.25 lakh in case of severe disability.
7.5       It is proposed to increase the limit of deduction u/s 80U of the Income-tax Act in case of a person with disability, from ` 50,000 to ` 75,000.  It is also proposed to increase the limit of deduction from ` 1 lakh to `1.25 lakh in case of severe disability.
7.6       It is proposed to increase the limit of deduction u/s 80CCC of the Income-tax Act on account of contribution to a pension fund of LIC or IRDA approved insurer from ` 1 lakh to ` 1.5 lakh.
7.7       It is proposed to increase the limit of deduction u/s 80CCD of the Income-tax Act on account of contribution by the employee to National Pension Scheme (NPS) from ` 1 lakh to ` 1.50 lakh.  It is also proposed to provide a deduction of  upto ` 50,000 over and above the limit of ` 1.50 lakh in respect of contributions made to NPS.
7.8       It is proposed to amend the provisions of section 197A of the Income-tax Act so as to provide the facility of filing self-declaration of non-deduction of tax by the recipients of taxable maturity proceeds of life insurance policy.
7.9       Under the existing provisions of the Income-tax Act, an individual buying an immovable property from a resident is required to deduct tax but is not required to obtain TAN for depositing the tax so deducted.  With a view to extend the same facility to an individual or HUF purchasing an immovable property from a non-resident, it is proposed to relax the requirement of obtaining TAN by the individual or HUF who is required to deduct tax on acquisition of immovable property from a non-resident.
7.10     It is proposed to provide that donation made to National Fund for Control of Drug Abuse (NFCDA) shall be eligible for 100% deduction under section 80G of the Income-tax Act.
7.11     Details of tax deductions referred to in para 99.
            ·       Deduction u/s 80C                                                 `1,50,000
            ·       Deduction u/s 80CCD                                               `50,000
            ·       Deduction on account of interest
                    on house property loan
                    (Self occupied property)                                        `2,00,000
            ·       Deduction u/s 80D on health  insurance premium   `25,000
            ·       Exemption of transport allowance                           `19,200
                    Total                                                                      `4,44,200
8.         F.   Stand alone proposals to maximise benefits to the economy
8.1       It is proposed to provide for chargeability of interest paid by a permanent establishment (PE) or a branch of foreign bank to its Head Office (HO) and other overseas branches under the source rule of taxation and for treating the PE or branch as a taxable entity for computation of income and for purpose of levy of TDS.
8.2       With a view to providing a uniform method of computation of period of stay in Indian for the purposes of determination of ‘resident’ status in the case of a India seafarer, whether working on a Indian-ship or foreign-ship, it is proposed to provide an enabling power to CBDT to prescribe the same in the rules.
8.3       In search cases, it is proposed to allow seized cash to be adjusted towards the assessee’s tax liability under his settlement application.
8.4       With a view to ensuring proper deduction of tax on payments made to non-residents, it is proposed to amend the provisions of section 195 of the Income-tax Act so as to provide for enabling power to the CBDT for capturing information about prescribed foreign remittances which are claimed to be not chargeable to tax


Budget Highlights 2016 (Tax Related)

1. Raise the ceiling of tax rebate under section 87A from `2000 to `5000 to lessen tax burden on individuals with income upto 5 lakhs.

2. Increase the limit of deduction of rent paid under section 80GG from `24000 per annum to `60000, to provide relief to those who live in rented houses.

3. Increase the turnover limit under Presumptive taxation scheme under section 44AD of the Income Tax Act to 2 crores to bring big relief to a large number of assessees in the MSME category.

4. Extend the presumptive taxation scheme with profit deemed to be 50%, to professionals with gross receipts up to `50 lakh.

5. Accelerated depreciation wherever provided in IT Act will be limited to maximum 40 percent from 1.4.2017.

6. Benefit of deductions for Research would be limited to 150% from 1.4.2017 and 100 percentfrom 1.4.2020.

7. Benefit of section 10AA to new SEZ units will be available to those units which commence activity before 31.3.2020.

8. The weighted deduction under section 35CCD for skill development will continue up to 1.4.2020.

9. New manufacturing companies incorporated on or after 1.3.2016 to be given an option to be taxed at 25% + surcharge and cess provided they do not claim profit linked or investment linked deductions and do not avail of investment allowance and accelerated depreciation.

10. Lower the corporate tax rate for the next financial year for relatively small enterprises i.e companies with turnover not exceeding ` 5 crore (in the financial year ending March 2015), to 29% plus surcharge and cess.

11. 100% deduction of profits for 3 out of 5 years for startups setup during April, 2016 to March, 2019. MAT will apply in such cases.

12. 10% rate of tax on income from worldwide exploitation of patents developed and registered in India by a resident.

13. Complete pass through of income-tax to securitization trusts including trusts of ARCs. Securitisation trusts required to deduct tax at source.

14. Period for getting benefit of long term capital gain regime in case of unlisted companies is proposed to be reduced from 3 to 2 years.

15. Non-banking financial companies shall be eligible for deduction to the extent of 5% of its income in respect of provision for bad and doubtful debts.

16. Determination of residency of foreign company on the basis of Place of Effective Management (POEM) is proposed to be deferred by one year.

17. Commitment to implement General Anti Avoidance Rules (GAAR) from 1.4.2017.

18.  Exemption of service tax on services provided under Deen Dayal Upadhyay Grameen Kaushalya Yojana and services provided by Assessing Bodies empanelled by Ministry of Skill Development & Entrepreneurship.

19.  Exemption of Service tax on general insurance services provided under ‘Niramaya’ Health Insurance Scheme launched by National Trust for the Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disability.

20.  Basic custom and excise duty on refrigerated containers reduced to 5% and 6%.

21.  Withdrawal up to 40% of the corpus at the time of retirement to be tax exempt in the case of National Pension Scheme (NPS). Annuity fund which goes to legal heir will not be taxable.

22.  In case of superannuation funds and recognized provident funds, including EPF, the same norm of 40% of corpus to be tax free will apply in respect of corpus created out of contributions made on or from 1.4.2016.

23.  Limit for contribution of employer in recognized Provident and Superannuation Fund of ` 1.5 lakh per annum for taking tax benefit. Exemption from service tax for Annuity services provided by NPS and Services provided by EPFO to employees.

24.  Reduce service tax on Single premium Annuity (Insurance) Policies from 3.5% to 1.4% of the premium paid in certain cases.

25. 100% deduction for profits to an undertaking in housing project for flats upto 30 sq. metres in four metro cities and 60 sq. metres in other cities, approved during June 2016 to March 2019 and completed in three years. MAT to apply.

26.  Deduction for additional interest of `50,000 per annum for loans up to `35 lakh sanctioned in 2016-17 for first time home buyers, where house cost does not exceed ` 50 lakh.

27.  Distribution made out of income of SPV to the REITs and INVITs having specified shareholding will not be subjected to Dividend Distribution Tax, in respect of dividend distributed after the specified date.

28.  Exemption from service tax on construction of affordable houses up to 60 square metres under any scheme of the Central or State Government including PPP Schemes.

29.  Extend excise duty exemption, presently available to Concrete Mix manufactured at site for use in construction work to Ready Mix Concrete.

30. Additional tax at the rate of 10% of gross amount of dividend will be payable by the recipients receiving dividend in excess of ` 10 lakh per annum.

31.  Surcharge to be raised from 12% to 15% on persons, other than companies, firms and cooperative societies having income above ` 1 crore.

32.  Tax to be deducted at source at the rate of 1 % on purchase of luxury cars exceeding value of ` ten lakh and purchase of goods and services in cash exceeding ` two lakh.

33.  Securities Transaction tax in case of ‘Options’ is proposed to be increased from .017% to .05%.

34.  Equalization levy of 6% of gross amount for payment made to nonresidents exceeding ` 1 lakh a year in case of B2B transactions.

35.  Krishi Kalyan Cess, @ 0.5% on all taxable services, w.e.f. 1 June 2016. Proceeds would be exclusively used for financing initiatives for improvement of agriculture and welfare of farmers. Input tax credit of this cess will be available for payment of this cess.

36.  Infrastructure cess, of 1% on small petrol, LPG, CNG cars, 2.5% on diesel cars of certain capacity and 4% on other higher engine capacity vehicles and SUVs. No credit of this cess will be available nor credit of any other tax or duty be utilized for paying this cess.

37.  Excise duty of ‘1% without input tax credit or 12.5% with input tax credit’ on articles of jewellery [excluding silver jewellery, other than studded with diamonds and some other precious stones], with a higher exemption and eligibility limits of ` 6 crores and ` 12 crores respectively.

38.  Excise on readymade garments with retail price of ` 1000 or more raised to 2% without input tax credit or 12.5% with input tax credit.

39.  ‘Clean Energy Cess’ levied on coal, lignite and peat renamed to ‘Clean Environment Cess’ and rate increased from `200 per tonne to `400 per tonne.

40.  Excise duties on various tobacco products other than beedi raised by about 10 to 15%.

41.  Assignment of right to use the spectrum and its transfers has been deducted as a service leviable to service tax and not sale of intangible goods.


42. Domestic taxpayers can declare undisclosed income or such income represented in the form of any asset by paying tax at 30%, and surcharge at 7.5% and penalty at 7.5%, which is a total of 45% of the undisclosed income. Declarants will have immunity from prosecution.

43.  Surcharge levied at 7.5% of undisclosed income will be called Krishi Kalyan surcharge to be used for agriculture and rural economy.

44.  New Dispute Resolution Scheme to be introduced. No penalty in respect of cases with disputed tax up to ` 10 lakh. Cases with disputed tax exceeding ` 10 lakh to be subjected to 25% of the minimum of the imposable penalty. Any pending appeal against a penalty order can also be settled by paying 25% of the minimum of the imposable penalty and tax interest on quantum addition.

45.  High Level Committee chaired by Revenue Secretary to oversee fresh cases where assessing officer applies the retrospective amendment.

46.  One-time scheme of Dispute Resolution for ongoing cases under retrospective amendment.

47.  Penalty rates to be 50% of tax in case of underreporting of income and 200% of tax where there is misreporting of facts.

48.  Disallowance will be limited to 1% of the average monthly value of investments yielding exempt income, but not exceeding the actual expenditure claimed under rule 8D of Section 14A of Income Tax Act.

49.  Time limit of one year for disposing petitions of the tax payers seeking waiver of interest and penalty.

50.  Mandatory for the assessing officer to grant stay of demand once the assesse pays 15% of the disputed demand, while the appeal is pending before Commissioner of Income-tax (Appeals).

51.  Monetary limit for deciding an appeal by a single member Bench of ITAT enhanced from `15 lakhs to ` 50 lakhs.

52.  11 new benches of Customs, Excise and Service Tax Appellate Tribunal (CESTAT).

53. GoI will pay contribution of 8.33% for of all new employees enrolling in EPFO for the first three years of their employment. Budget provision of ` 1000 crore for this scheme.

54. Deduction under Section 80JJAA of the Income Tax Act will be available to all assesses who are subject to statutory audit under the Act.