DIRECT TAX CODE AMENDED
INDIVIDUAL
- Exempt-Exempt-Exempt (EEE) tax regime to continue, but on fewer savings schemes such as the PPF & the new pension scheme. Ulips and equity oriented MFs to lose tax benefits at time of maturity
- Perquisites will be valued at prescribed rates and not at market linked rates
- Employer's contributions to provident fund & retirement benefits will be exempt from income tax, subject to monetary limits
- Interest on home loans up to Rs 1.5 lakh for self occupied houses to be exempt from tax
COMPANIES
- Minimum Alternate tax (MAT) to be levied on book profit of companies & not on gross assets
- New units commissioned in special economic zones after the code comes into force will not enjoy tax sops
- Controlled foreign corporation (CFC) rules to be introduced to tax the income of foreign subsidiaries of Indian firms
- Change in concept of residency to include only those foreign firms whose management take decisions in India
- Gains from sale of shares & other assets will be added to the total income & the tax payer will be taxed according to slab
- Tax blow will be softened for investors who sell shares after one year of holding them
- Securities transaction tax to stay, but will be calibrated with the new capital gains regime
- FIIs buying and selling shares will pay capital gains tax, but as advance tax
- Treaty shopping will end with general anti avoidance rules
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