Tax to be deducted

Tax to be deducted @ 2% from the sum paid under life insurance policies, which are not exempted under section 10(10D). No tax to be deducted where the amount in aggregate does not exceeds ` 1 lakh.

• Secularization trust and Venture Capital Funds are now mandated to file Income tax return, even if their income is exempted.
• Income tax authority is empowered to summon and attendance of any person, to verify information in the possession of the Authority.
• Extend the eligible date of borrowing in foreign currency from 30.06.2016 to 30.06.2017 for a concessional tax rate of 5 percent on interest payments. Tax incentive to all types of bonds instead of only infrastructure bonds.
• High Level Committee to interact with trade and industry to ascertain areas where clarity in tax laws is required.
• Deduction under Sec. 54EC from capital gain capped at ` 50 Lakh.
• Expenditure under Sec 54F can be claimed only for one house.
• In the case of Debt Mutual Funds, the capital gains arising on transfer of units held for more than a year was taxed at a concessional rate of 10%. Now, the period of holding in respect of such units for being entitled to Long Term Capital Gain has been increased from 12 months to 36 months. The taxation rate will also be 20% rather than 10% similar to other capital assets with indexation.
• Failure to deduct tax will result in dis allowance of only 30% expenditure amount instead of Pre-budget dis allowance of 100%.
• Foreign Investors (FII/FPI etc) will be taxed on their investment in India as capital gain and not as Business Income, as the investment has been specifically brought in the definition of Capital Assets.