UNION BUDGET 2011UNION BUDGET 2011

Bharat Kumar Soni AAOBharat Kumar Soni AAO

India Budget India Budget

The The Union Budget of IndiaUnion Budget of India also  also called the called the General India BudgetGeneral India Budget

Presented each year on the last Presented each year on the last working day of February working day of February

It outlines all the economic planning It outlines all the economic planning of the Government of India for the of the Government of India for the next year. next year.

Origin and History Origin and History The first general The first general budget of India budget of India was was

presented by the India's first Finance presented by the India's first Finance Minister Sir R.K. Shanmugham Chetty on Minister Sir R.K. Shanmugham Chetty on November 26, 1947. November 26, 1947.

28 Union Finance Ministers have been 28 Union Finance Ministers have been presenting the budget year after year.presenting the budget year after year.

This is the 6This is the 6thth Budget of Mr. Pranab Budget of Mr. Pranab MukherjeeMukherjee

Agricultural sector alone was focused Agricultural sector alone was focused initially, but later on, the focus shifted to initially, but later on, the focus shifted to the many sectors including the industrial, the many sectors including the industrial, financial and other sectors.financial and other sectors.

Passing of Budget Passing of Budget The annual India budget has to be passed The annual India budget has to be passed

by the House of the parliament before it by the House of the parliament before it can come into effect on April 1, the start of can come into effect on April 1, the start of India's financial year India's financial year

The Indian parliament has one month to The Indian parliament has one month to review and modify the government's review and modify the government's budget proposals budget proposals

If by April 1, the parliamentary discussion If by April 1, the parliamentary discussion on the budget has not been completed, on the budget has not been completed, the budget as proposed by the minister of the budget as proposed by the minister of finance goes into effect subject to finance goes into effect subject to retroactive modifications after the retroactive modifications after the parliamentary review.parliamentary review.

INFRASTRUCTUREINFRASTRUCTURE

Allocation of Rs 2,14,000 crores for Allocation of Rs 2,14,000 crores for infrastructure in 2011-12 at an increase infrastructure in 2011-12 at an increase of 23.3 % over 2010-11- amounts to of 23.3 % over 2010-11- amounts to 48.5 % of total plan allocation.48.5 % of total plan allocation.

Comprehensive policy for PPP projects.Comprehensive policy for PPP projects. To boost infrastructure development, To boost infrastructure development,

tax free bonds of Rs 30,000 crore tax free bonds of Rs 30,000 crore proposed to be issued by Government. proposed to be issued by Government.

TAX REFORMSTAX REFORMS

DTC proposed to be effective from DTC proposed to be effective from April 1, 2012.April 1, 2012.

GST issues narrowed down with GST issues narrowed down with states.states.

Companies Bill to be introduced in Companies Bill to be introduced in Lok Sabha during the current Lok Sabha during the current session.session.

SUBSIDIESSUBSIDIES

Subsidy for urea under consideration.Subsidy for urea under consideration.

Direct transfer of cash subsidy to Direct transfer of cash subsidy to people living below poverty line for people living below poverty line for better delivery of kerosene, LPG and better delivery of kerosene, LPG and fertilizers fertilizers

HOUSING SECTOR FINANCEHOUSING SECTOR FINANCE

Existing scheme of interest subvention of Existing scheme of interest subvention of 1% on housing loan further liberalised.1% on housing loan further liberalised.

Housing loan limit enhanced to Rs 25 lakhs Housing loan limit enhanced to Rs 25 lakhs for dwelling units under priority sector for dwelling units under priority sector lending.lending.

Rural Housing Fund enhanced to Rs 3,000 Rural Housing Fund enhanced to Rs 3,000 crores.crores.

Central Electronic Registry to prevent Central Electronic Registry to prevent frauds involving multiple lending on the frauds involving multiple lending on the same immovable property. same immovable property.

BLACK MONEYBLACK MONEY

Five fold strategy to be put into Five fold strategy to be put into operation to deal with the problem of operation to deal with the problem of generation and circulation of black generation and circulation of black money.money.

Membership of various international fora Membership of various international fora engaged in anti money laundering, engaged in anti money laundering, Financial integrity and Economic Financial integrity and Economic development, Exchange of information development, Exchange of information for tax purposes and transparency to be for tax purposes and transparency to be secured.secured.

Various Tax Information Exchange Various Tax Information Exchange Agreements (TIEA) and Double Agreements (TIEA) and Double Taxation Avoidance Agreements Taxation Avoidance Agreements (DTAA) concluded. Foreign Tax (DTAA) concluded. Foreign Tax Division of CBDT has been Division of CBDT has been strengthened to effectively handle strengthened to effectively handle increase in tax information exchange increase in tax information exchange and transfer pricing issues.and transfer pricing issues.

Enforcement Directorate strengthened Enforcement Directorate strengthened three fold to handle increased number three fold to handle increased number of cases registered under amended of cases registered under amended Money Laundering LegislationMoney Laundering Legislation

Finance Ministry has commissioned Finance Ministry has commissioned study on unaccounted income and study on unaccounted income and wealth held within and outside the wealth held within and outside the country.country.

Comprehensive national policy to be Comprehensive national policy to be announced in near future to strengthen announced in near future to strengthen controls over prevention of trafficking controls over prevention of trafficking on narcotic drugs on narcotic drugs

IMPROVING GOVERNANCEIMPROVING GOVERNANCE IT InitiativesIT Initiatives Various IT initiatives for efficient tax Various IT initiatives for efficient tax

administration such as:- administration such as:- e-filing and e-payment of taxese-filing and e-payment of taxes adoption of ‘Sevottam’ concept by CBEC adoption of ‘Sevottam’ concept by CBEC

and CBDTand CBDT web based facility for tax payers to track web based facility for tax payers to track

the refunds and credit for pre-paid taxes the refunds and credit for pre-paid taxes augmentation of processing capacity.augmentation of processing capacity.

A new scheme with an outlay of Rs A new scheme with an outlay of Rs 300 crores to be launched to provide 300 crores to be launched to provide assistance to States to modernise assistance to States to modernise their stamp and registration their stamp and registration administration and roll out e-administration and roll out e-stamping in all the states in the next stamping in all the states in the next three years.three years.

A new simplified form ‘Sugam’ to be A new simplified form ‘Sugam’ to be introduced to reduce the compliance introduced to reduce the compliance burden of small tax payers falling burden of small tax payers falling within presumptive taxation within presumptive taxation

Three more benches of Settlement Three more benches of Settlement Commission to be set up to fast track Commission to be set up to fast track the disposal of cases.the disposal of cases.

Steps initiated to reduce litigation and Steps initiated to reduce litigation and focus attention on high revenue cases focus attention on high revenue cases

CORRUPTIONCORRUPTION

Group of Ministers constituted to Group of Ministers constituted to consider measures for tackling consider measures for tackling corruption. corruption.

FINANCE BILL 2011FINANCE BILL 2011

DIRECT TAXESDIRECT TAXES

Definition of “charitable purpose”Definition of “charitable purpose”

It is proposed to amend section 2(15) It is proposed to amend section 2(15) to enhance the current monetary to enhance the current monetary limit in respect of receipts from limit in respect of receipts from ancillary activities from ten lakhs ancillary activities from ten lakhs rupees to twenty-five lakhs rupees.rupees to twenty-five lakhs rupees.

This amendment is proposed to take This amendment is proposed to take effect from A.Y 2012-13effect from A.Y 2012-13

Exemption of certain perquisites of Chairmen Exemption of certain perquisites of Chairmen and Members of Union Public Service and Members of Union Public Service

CommissionCommission It is proposed to amend section 10 to It is proposed to amend section 10 to

extend benefit of exemption in respect of extend benefit of exemption in respect of specific perquisites and allowances, which specific perquisites and allowances, which will be notified by the central government, will be notified by the central government, received by both serving as well as retired received by both serving as well as retired Chairmen and Members of Union Public Chairmen and Members of Union Public Service Commission.Service Commission.

This amendment is proposed to take This amendment is proposed to take effect retrospectively from 1effect retrospectively from 1stst April,2008. April,2008.

Exemption of specific income of notified body Exemption of specific income of notified body or authority or trust or board or commissionor authority or trust or board or commission

A new clause in section 10 of the Income-A new clause in section 10 of the Income-tax Act is being inserted to provide tax Act is being inserted to provide exemption from income tax to any exemption from income tax to any specified income of a body, authority, specified income of a body, authority, board, trust or commission which is set up board, trust or commission which is set up or constituted by a Central, State or or constituted by a Central, State or Provincial Act or constituted by the Central Provincial Act or constituted by the Central Government or a State Government with Government or a State Government with the object of regulating or administering the object of regulating or administering an activity for the benefit of the general an activity for the benefit of the general public, provided-public, provided-

it is not engaged in any commercial activity,it is not engaged in any commercial activity, is notified by the Central Government in this is notified by the Central Government in this

behalfbehalf The nature and extent of income to be The nature and extent of income to be

exempted will also be specified while exempted will also be specified while notifying such entity.notifying such entity.

A consequential amendment is proposed in A consequential amendment is proposed in section 139 to provide filing of the return of section 139 to provide filing of the return of income.income.

These amendments are proposed to take These amendments are proposed to take effect from 1effect from 1stst June 2011 June 2011

Infrastructure Debt FundInfrastructure Debt Fund

In order to augment long term, low cost In order to augment long term, low cost funds from abroad for the infrastructure funds from abroad for the infrastructure sector, it is proposed to facilitate setting sector, it is proposed to facilitate setting up of dedicated debt funds, which will be up of dedicated debt funds, which will be exempt u/s 10 of the IT Act, once notified exempt u/s 10 of the IT Act, once notified by the Central Government. It will by the Central Government. It will however, be required to file return of however, be required to file return of income.income.

It is also proposed to amend section 115A It is also proposed to amend section 115A of the Income tax Act to provide that any of the Income tax Act to provide that any interest received by a non-resident from interest received by a non-resident from such notified infrastructure debt fund shall such notified infrastructure debt fund shall be taxable at the rate of 5% on the gross be taxable at the rate of 5% on the gross amount of such interest income.amount of such interest income.

New section 194LB to provide that the tax New section 194LB to provide that the tax shall be deducted at the rate of 5% by shall be deducted at the rate of 5% by such notified infrastructure debt fund on such notified infrastructure debt fund on any interest paid by it to non-resident.any interest paid by it to non-resident.

These amendments are proposed to take These amendments are proposed to take effect from 1effect from 1stst June 2011. June 2011.

Provisions relating to MAT and Provisions relating to MAT and DDT in case of SEZDDT in case of SEZ

The above provisions were inserted The above provisions were inserted in the Income tax Act by the SEZ Act in the Income tax Act by the SEZ Act w.e.f 10w.e.f 10thth February,2006. February,2006.

It is proposed to sunset the It is proposed to sunset the availability of exemption from availability of exemption from minimum alternate tax in the case of minimum alternate tax in the case of SEZ Developers and units in SEZ’s in SEZ Developers and units in SEZ’s in the Income tax Act as well as the the Income tax Act as well as the SEZ Act.SEZ Act.

This amendment to section 115JB of the This amendment to section 115JB of the Income –tax Act will take effect from 1Income –tax Act will take effect from 1stst April,2012.April,2012.

It is further proposed to discontinue the It is further proposed to discontinue the availability of exemption from DDT in the availability of exemption from DDT in the case of SEZ Developers under the Income-case of SEZ Developers under the Income-tax Act as well as the SEZ Act for tax Act as well as the SEZ Act for dividends declared, distributed or paid on dividends declared, distributed or paid on or after 1or after 1stst June, 2011. June, 2011.

This amendment to section 115-O of the IT This amendment to section 115-O of the IT Act will take effect from 1Act will take effect from 1stst June,2011 June,2011

Weighted deduction for contribution Weighted deduction for contribution made for approved scientific made for approved scientific

research programmeresearch programme In order to encourage more In order to encourage more

contributions to approved scientific contributions to approved scientific research programmes, it is proposed to research programmes, it is proposed to increase the weighted deduction u/s increase the weighted deduction u/s 35(2AA) from 175 % to 200% ,in respect 35(2AA) from 175 % to 200% ,in respect of amounts paid to National of amounts paid to National Laboratories, Universities, IITs etc for Laboratories, Universities, IITs etc for the purpose of approved scientific the purpose of approved scientific research programme.research programme.

This amendment is proposed to take This amendment is proposed to take effect from 1effect from 1stst April, 2012. April, 2012.

Tax benefit for New Pension Tax benefit for New Pension System (NPS)System (NPS)

It is proposed to amend section 80CCE so It is proposed to amend section 80CCE so as to provide that the contribution made as to provide that the contribution made by the Central Government or any other by the Central Government or any other employer to a pension scheme u/s employer to a pension scheme u/s 80CCD(2) shall be excluded from the limit 80CCD(2) shall be excluded from the limit of 1 lakh provided u/s 80CCE.of 1 lakh provided u/s 80CCE.

Currently, the contribution made by Currently, the contribution made by the employer towards a recognised the employer towards a recognised provident fund, an approved gratuity provident fund, an approved gratuity fund is allowable as a deduction from fund is allowable as a deduction from business income u/s 36, subject to business income u/s 36, subject to certain limits. However, the certain limits. However, the contribution made by an employer to contribution made by an employer to the NPS is not allowed as deduction.the NPS is not allowed as deduction.

It is, therefore, proposed to amend It is, therefore, proposed to amend section 36 so as to provide that any section 36 so as to provide that any sum paid by the assessee as an sum paid by the assessee as an employer by way of contribution employer by way of contribution towards a pension scheme, as referred towards a pension scheme, as referred to in section 80CCD(2) on account of an to in section 80CCD(2) on account of an employee to the extent it does not employee to the extent it does not exceed 10% of salary of the employee exceed 10% of salary of the employee in the previous year, shall be allowed as in the previous year, shall be allowed as deduction in computing the income deduction in computing the income under the head “Profits and gains of under the head “Profits and gains of business or profession”business or profession”

These amendments are proposed to These amendments are proposed to take effect from A.Y 2012-13.take effect from A.Y 2012-13.

Deduction for investment in long-Deduction for investment in long-term infrastructure bondsterm infrastructure bonds

It is proposed to amend section It is proposed to amend section 80CCF to allow deduction on account 80CCF to allow deduction on account of investment in notified long term of investment in notified long term infrastructure bonds for the A.Y infrastructure bonds for the A.Y 2012-13. 2012-13.

Extension of sunset clause for tax Extension of sunset clause for tax holiday for power sectorholiday for power sector

It is proposed to amend section 80-It is proposed to amend section 80-IA(4)(iv) to extend the terminal date IA(4)(iv) to extend the terminal date for a further period of one year, ie for a further period of one year, ie upto 31/03/12.upto 31/03/12.

This amendment will take effect from This amendment will take effect from 11stst April,2012 April,2012

Rationalisation of provisions Rationalisation of provisions relating to Transfer Pricingrelating to Transfer Pricing

It is proposed to amend section 92C It is proposed to amend section 92C of the Act to provide that instead of of the Act to provide that instead of present variation of 5% in respect of present variation of 5% in respect of pricing in Intl’ transaction, the pricing in Intl’ transaction, the allowable variation will be such allowable variation will be such percentage as may be notified by the percentage as may be notified by the Central Government in this behalf.Central Government in this behalf.

This amendment is proposed to take This amendment is proposed to take effect from 1effect from 1stst April, 2012. April, 2012.

It is proposed to amend section 92CA It is proposed to amend section 92CA so as to specifically provide that the so as to specifically provide that the jurisdiction of the transfer pricing officer jurisdiction of the transfer pricing officer shall extend to the determination of the shall extend to the determination of the ALP in respect of other international ALP in respect of other international transactions, which are noticed by transactions, which are noticed by him ,subsequently in the course of him ,subsequently in the course of proceedings before him.proceedings before him.

These international transactions would These international transactions would be in addition to international be in addition to international transactions referred to the TPO by the transactions referred to the TPO by the Assessing Officer.Assessing Officer.

In order to enable the TPO to conduct In order to enable the TPO to conduct on -the-spot enquiry and verification, on -the-spot enquiry and verification, it is proposed to amend section 92CA it is proposed to amend section 92CA (7) so as to enable the TPO to also (7) so as to enable the TPO to also exercise the power of survey exercise the power of survey conferred on the income- tax conferred on the income- tax authority u/s133 A of the Act. authority u/s133 A of the Act.

These amendments are proposed to These amendments are proposed to take effect from 1take effect from 1stst June 2011. June 2011.

Corporate assessees face practical Corporate assessees face practical difficulties in accessing contemporary difficulties in accessing contemporary comparable data before 30comparable data before 30thth September in order to furnish a report September in order to furnish a report in respect of their international in respect of their international transactions. It is, therefore, proposed transactions. It is, therefore, proposed to amend section 139 to extend the to amend section 139 to extend the due date of filing of income by such due date of filing of income by such corporate assesses to 30corporate assesses to 30thth November November of the AY.of the AY.

This amendment is proposed to take This amendment is proposed to take effect from 1effect from 1stst April 2011. April 2011.

Tool Box of counter measures in respect of Tool Box of counter measures in respect of transaction with persons located in a transaction with persons located in a

notified jurisdictional areanotified jurisdictional area In order to discourage transactions In order to discourage transactions

by a resident assessee with persons by a resident assessee with persons located in any country or jurisdiction located in any country or jurisdiction which does not effectively exchange which does not effectively exchange information with India, anti-information with India, anti-avoidance measures have been avoidance measures have been proposed in the Income-tax Act.proposed in the Income-tax Act.

New section 94A to be inserted in the New section 94A to be inserted in the Act to specifically deal with Act to specifically deal with transactions undertaken with persons transactions undertaken with persons located in such non co-operative located in such non co-operative country or area .country or area .

The proposed section provides :-The proposed section provides :- an enabling power to the Central an enabling power to the Central

Government to notify any country or Government to notify any country or territory outside India, having regard to territory outside India, having regard to the lack of effective exchange of the lack of effective exchange of information by it with India, as a information by it with India, as a notified jurisdictional areanotified jurisdictional area

that if an assessee enters into a that if an assessee enters into a transaction, where one of the parties transaction, where one of the parties to the transaction is a person located to the transaction is a person located in a notified jurisdictional area, then in a notified jurisdictional area, then all the parties to the transaction shall all the parties to the transaction shall be deemed to be associated be deemed to be associated enterprises and the transaction shall enterprises and the transaction shall be deemed to be an international be deemed to be an international transaction and accordingly, transfer transaction and accordingly, transfer pricing regulations shall apply to such pricing regulations shall apply to such transactions;transactions;

that no deduction in respect of that no deduction in respect of any payment made to any any payment made to any financial institution shall be financial institution shall be allowed unless the assessee allowed unless the assessee furnishes an authorization, in the furnishes an authorization, in the prescribed form, authorizing the prescribed form, authorizing the Board or any other income-tax Board or any other income-tax authority acting on its behalf, to authority acting on its behalf, to seek relevant information from seek relevant information from the said financial institution the said financial institution

that no deduction in respect of any that no deduction in respect of any other expenditure or allowance other expenditure or allowance (including depreciation) arising (including depreciation) arising from the transaction with a person from the transaction with a person located in a notified jurisdictional located in a notified jurisdictional area shall be allowed under any area shall be allowed under any provision of the Act unless the provision of the Act unless the assessee maintains such other assessee maintains such other documents and furnishes the documents and furnishes the information as may be prescribed;information as may be prescribed;

that if any sum is received from a that if any sum is received from a person located in the notified person located in the notified jurisdictional area, then, the onus jurisdictional area, then, the onus is on the assessee to satisfactorily is on the assessee to satisfactorily explain the source of such money explain the source of such money in the hands of such person or in in the hands of such person or in the hands of the beneficial owner, the hands of the beneficial owner, and in case of his failure to do so, and in case of his failure to do so, the amount shall be deemed to be the amount shall be deemed to be the income of the assessee the income of the assessee

that any payment made to a that any payment made to a person located in the notified person located in the notified jurisdictional area shall be liable to jurisdictional area shall be liable to deduction of tax at the higher of deduction of tax at the higher of the rates specified in the relevant the rates specified in the relevant provision of the Act or rate or provision of the Act or rate or rates in force or a rate of 30 per rates in force or a rate of 30 per cent.cent.

This amendment is proposed to This amendment is proposed to take effect from 1take effect from 1stst June 2011 June 2011

Taxation of certain foreign Taxation of certain foreign dividends at a reduced ratedividends at a reduced rate

New section 115BBD to provide that where New section 115BBD to provide that where total income of an Indian company total income of an Indian company includes any income by way of dividends includes any income by way of dividends received from a foreign subsidiary received from a foreign subsidiary company, then such dividends shall be company, then such dividends shall be taxable at the rate of 15%. (plus taxable at the rate of 15%. (plus applicable surcharge and cess) on the applicable surcharge and cess) on the gross amount of dividends. No gross amount of dividends. No expenditure in respect of such dividends expenditure in respect of such dividends shall be allowed under the Act.shall be allowed under the Act.

This amendment is proposed to take effect This amendment is proposed to take effect from 1from 1stst April, 2012 April, 2012

Minimum Alternate TaxMinimum Alternate Tax

It is proposed to amend section It is proposed to amend section 115JB (1) to increase the rate of MAT 115JB (1) to increase the rate of MAT to eighteen and one-half per cent to eighteen and one-half per cent from the existing rate of 18% of such from the existing rate of 18% of such book profit.book profit.

This amendment will take effect from This amendment will take effect from 11stst April, 2012 April, 2012

Alternate Minimum Tax for Limited Alternate Minimum Tax for Limited Liability Partnership (LLP)Liability Partnership (LLP)

New Chapter XII-BA in the Income-New Chapter XII-BA in the Income-tax Act containing special provisions tax Act containing special provisions relating to certain limited liability relating to certain limited liability partnerships.partnerships.

Where the regular income-tax Where the regular income-tax payable for a previous year by a payable for a previous year by a LLP is less than the alternate LLP is less than the alternate minimum tax payable for such minimum tax payable for such previous year, the adjusted total previous year, the adjusted total income shall be deemed to be income shall be deemed to be the total income of such LLP and the total income of such LLP and it shall be liable to pay income-it shall be liable to pay income-tax on such total income at the tax on such total income at the rate of eighteen and one-half per rate of eighteen and one-half per cent.. cent..

Collection of information on requests Collection of information on requests received from tax authorities outside received from tax authorities outside

IndiaIndia

It is proposed to facilitate prompt It is proposed to facilitate prompt collection of information on requests collection of information on requests received from tax authorities outside received from tax authorities outside India in relation to an agreement for India in relation to an agreement for exchange of information u/s 90 or exchange of information u/s 90 or section 90A of the Income-tax Act.section 90A of the Income-tax Act.

Section 131(3) to be amended to Section 131(3) to be amended to empower the tax authority, as empower the tax authority, as notified by the Board, to impound notified by the Board, to impound and retain any books of account and retain any books of account and other documents produced and other documents produced before it in any proceeding under before it in any proceeding under the Act.the Act.

These amendments will take These amendments will take effect from 1effect from 1stst June, 2011 June, 2011

Exemption to a class or classes of Exemption to a class or classes of persons from furnishing a return of persons from furnishing a return of

incomeincome

In order to reduce the compliance burden on In order to reduce the compliance burden on small tax payers, it is proposed to insert sub-small tax payers, it is proposed to insert sub-section (1C) in section 139. This provision section (1C) in section 139. This provision empowers the Central Government to exempt, by empowers the Central Government to exempt, by notification in the Official Gazette, any class or notification in the Official Gazette, any class or classes of persons from the requirement of classes of persons from the requirement of furnishing a return of income, having regard to furnishing a return of income, having regard to such conditions as may be specified in that such conditions as may be specified in that notification notification

These amendments will take effect from 1These amendments will take effect from 1stst June June 20112011

Notification for processing of returns Notification for processing of returns in Centralised Processing Centersin Centralised Processing Centers

It is proposed to amend section It is proposed to amend section 143(1B) to extend the existing time 143(1B) to extend the existing time limit for issue of notification to 31limit for issue of notification to 31stst March 2012.March 2012.

This amendment will take effect This amendment will take effect retrospectively from 1retrospectively from 1stst April 2011 April 2011

Extension of time limit for Extension of time limit for assessments in case of exchange of assessments in case of exchange of

informationinformation It is proposed to exclude the time It is proposed to exclude the time

taken in obtaining information from taken in obtaining information from the tax authorities in jurisdictions the tax authorities in jurisdictions situated outside India, under an situated outside India, under an agreement referred to in section 90 agreement referred to in section 90 or section 90A, from the statutory or section 90A, from the statutory time limit prescribed for completion time limit prescribed for completion of assessment or reassessment.of assessment or reassessment.

These amendments will take effect These amendments will take effect from 1from 1stst June, 2011 June, 2011

Modification in the conditions for Modification in the conditions for filing an application before the filing an application before the

Settlement CommissionSettlement Commission

It is proposed to expand the criteria It is proposed to expand the criteria for filing an application for for filing an application for settlement by a tax payer in whose settlement by a tax payer in whose case proceedings have been initiated case proceedings have been initiated as a result of search or requisition of as a result of search or requisition of books of account in the case of his books of account in the case of his relative.relative.

It is proposed to insert a new clause (ia) It is proposed to insert a new clause (ia) in the proviso to section 245C(1). This in the proviso to section 245C(1). This stipulates that an application can also be stipulates that an application can also be made, where the applicant—made, where the applicant—

is related to the person in whose case is related to the person in whose case proceedings have been initiated as a proceedings have been initiated as a result of search and who has filed an result of search and who has filed an application; andapplication; and

is a person in whose case proceedings is a person in whose case proceedings have also been initiated as a result of have also been initiated as a result of search in the hands of his relative.search in the hands of his relative.

the additional amount of income-tax the additional amount of income-tax payable on the income disclosed in his payable on the income disclosed in his application exceeds ten lakh rupeesapplication exceeds ten lakh rupees

Omission of the requirement of Omission of the requirement of quoting of Document quoting of Document Identification NumberIdentification Number

Considering the practical difficulties Considering the practical difficulties due to non-availability of requisite due to non-availability of requisite infrastructure on an all India basis, it infrastructure on an all India basis, it is proposed to omit section 282B of is proposed to omit section 282B of the IT Act requiring every IT the IT Act requiring every IT Authority to allot DIN.Authority to allot DIN.

This amendment will take w.r.e.f 1This amendment will take w.r.e.f 1stst April 2011April 2011

Reporting of activities of liaison Reporting of activities of liaison officesoffices

It is proposed to seek regular information It is proposed to seek regular information from non-residents regarding the from non-residents regarding the activities of their liaison offices in India. A activities of their liaison offices in India. A new section 285 is proposed in the new section 285 is proposed in the Income-tax Act mandating the filing of Income-tax Act mandating the filing of annual information, within sixty days from annual information, within sixty days from the end of the financial year, in the the end of the financial year, in the prescribed form and providing prescribed prescribed form and providing prescribed details by non-residents as regards their details by non-residents as regards their liaison offices.liaison offices.

This amendment is proposed to take effect This amendment is proposed to take effect from 1from 1stst June, 2011 June, 2011

INDIRECT TAXESINDIRECT TAXESService TaxService Tax

Standard rate of Service Tax retained Standard rate of Service Tax retained at 10 per cent, while seeking a closer at 10 per cent, while seeking a closer fit between present regime and its fit between present regime and its GST successor.GST successor.

Hotel accommodation in excess of Rs Hotel accommodation in excess of Rs 1,000 per day and service provided 1,000 per day and service provided by air conditioned restaurants that by air conditioned restaurants that have license to serve liquor added as have license to serve liquor added as new services for levying Service Tax.new services for levying Service Tax.

Service Tax on air travel both Service Tax on air travel both domestic and international domestic and international raised.raised.

Services provided by life Services provided by life insurance companies in the area insurance companies in the area of investment and some more of investment and some more legal services proposed to be legal services proposed to be brought into tax net.brought into tax net.

Tax on all services provided by-Tax on all services provided by-

Hospitals with 25 or more beds with Hospitals with 25 or more beds with facility of central air conditioning.facility of central air conditioning.

Diagnostic services being provided by Diagnostic services being provided by a clinical establishment with the aid of a clinical establishment with the aid of laboratory of other medical laboratory of other medical equipment.equipment.

Service provided by Doctor, not being Service provided by Doctor, not being an employee of a clinical an employee of a clinical establishment, from the premises of establishment, from the premises of such establishmentsuch establishment

All individual and sole proprietor tax All individual and sole proprietor tax payers with a turnover upto Rs 60 payers with a turnover upto Rs 60 lakh freed from the formalities of lakh freed from the formalities of audit.audit.

To encourage voluntary compliance To encourage voluntary compliance the penal provision for Service Tax the penal provision for Service Tax are being rationalised. Similar are being rationalised. Similar changes being carried out in Central changes being carried out in Central Excise and Custom lawsExcise and Custom laws

TO COST MORETO COST MORE TO COST LESSTO COST LESSMedicinesMedicines

Medical EquipmentsMedical EquipmentsLife Saving Drugs, Life Saving Drugs, Homoeopathy Homoeopathy Medicine, Sanitary Medicine, Sanitary Napkins, DiapersNapkins, Diapers

Syringes/NeedlesSyringes/Needles

Branded GoldBranded Gold Gold BarsGold Bars

Computer, CD Rom, Computer, CD Rom, CD Drive, Hard Disk CD Drive, Hard Disk Drive, DVD WriterDrive, DVD Writer

Electronic Hardware,Electronic Hardware,

Printer, Mobile Printer, Mobile Phone, Battery Phone, Battery ChargerCharger

ClothesClothes

Text Books, Note Text Books, Note Books, Fountain Pens, Books, Fountain Pens, Pencils, sharpners etcPencils, sharpners etc

AgarbathisAgarbathis

Food in A/c Bar, Hotel Food in A/c Bar, Hotel AccommodationAccommodation

Air Travel, Pastry, Air Travel, Pastry, Cake, ChocolatesCake, Chocolates

Electric CarElectric Car

Hospital Expenses, Hospital Expenses, Litigation costsLitigation costs

Agricultural Agricultural EquipmentsEquipments

AAM ADMIAAM ADMIBelow is the actual price list of a canteen Below is the actual price list of a canteen

and that too in Indiaand that too in India

TeaTea Rs. 1.00Rs. 1.00

SoupSoup Rs. 5.50Rs. 5.50

DalDal Rs. 1.50Rs. 1.50

MealsMeals Rs. 2.00Rs. 2.00

ChapatiChapati Rs. 1.00Rs. 1.00

ChickenChicken Rs.24.50Rs.24.50

DosaDosa Rs. 4.00Rs. 4.00

Veg BiryaniVeg Biryani Rs. 8.00Rs. 8.00

FishFish Rs.13.00Rs.13.00

These items are meant for “POOR These items are meant for “POOR PEOPLE” and are available at Indian PEOPLE” and are available at Indian Parliament Canteen. The MPs who have Parliament Canteen. The MPs who have access to the canteen earn access to the canteen earn

Rs. 80,000/- per month along with other Rs. 80,000/- per month along with other perksperks

Now Judge for yourself as to Now Judge for yourself as to who is the “AAM ADMI”who is the “AAM ADMI”

THANK YOUTHANK YOU