Transfer Pricing
• Introduction of Roll-back mechanisms in Advance Pricing Agreements (APA). Arm’s Length Price (ALP) determined in APA is valid for previous 4 years also.
• TPO is also empowered to levy penalty u/s 271G in addition to the AO and CIT(A)
• Definition of international transaction rationalized
Tax Deduction at Source (TDS)
• To claim the expenditure, TDS on payment made to non-residents can be deposited before
filing of return [Sec 40(a)(i)]
• In case of non-deduction or non-payment of TDS from certain payments made to residents,
only 30% of the expenditure shall be disallowed. [Sec 40(a)(ia)]
• Disallowance u/s 40(a)(ia) shall extend to all payments on which tax is deductible
• Time limit for 2 years to treat payer as assessee in default has been dispensed with.
• Time limit of 6 years for TDS Statements not filed, extended to 7 years.
• An income tax authority may for the purpose of checking of compliance of TDS may survey any premises and enquire about books of accounts etc u/s 133A
Income Computation and disclosure standards
• Central Government to notify the income computation and disclosure standards to be followed by any class of persons or in respects of any class of income.
• AO may make best judgement assessment u/s 144, if the income is not computed in accordance with the standards notified u/s 145(2) of the Act.
Other amendments
• Extension of the sunset date under section 80-IA for the power sector to 31-03-2017
• Withholding tax of 5% on interest paid towards foreign borrowings via long term bonds
• Dividend income from foreign companies to continue to be taxed @ 15%
• Income arising from transfer of securities by a Foreign Portfolio Investor (FII) would be in the nature of Capital Gain
• TDS @ 2% from payments (Not covered u/s 10(10D)) made by the Insurance Companies under a life insurance policy if it exceeds Rs. 100000/- in a year.
• Corporate Social Responsibility (CSR) expenditure not allowed as deduction u/s 37
• Presumptive income u/s 44AE = Rs 7500 per month per vehicles, whether HGV or other than HGV (Heavy Goods Vehicle)
• Transfer of Government Security (carrying a periodic payment of interest) by one nonresident to other non-resident shall be exempt from capital gains tax.
• Transaction in respect of trading in Commodity derivatives carried out in recognized association and chargeable to CTT is not speculative transaction.
• In case of Capital gains arising from transfer of an asset by way of compulsory acquisition,the amount received in pursuance of an interim order of the authority shall be income of the previous year in which final order is made.
• Sec 54/54F exemption only when the investment is made in one residential house situated in India
• Limit of Rs. 50 Lakh u/s 54EC explained. Total investment of Rs. 50 Lakhs only is to be allowed, even if covering two financial years.
• New Section 133C inserted to empower the prescribed income tax authority to issue notice to person, whose information is in possession of such authority, requiring him to furnish information or documents.
• Failure to produce books of accounts and documents as required in any notice issued u/s 142(1) or failure to comply with a direction issued u/s 142(2A) mandatorily requires rigorous imprisonment upto 1 year and fine.
• Sec 285BA includes more transactions and reportable accounts to be furnished by specified persons to the income tax authority.
• Assessment of income of a person other than the searched person u/s 153C only if the Assessing officer of such other person is satisfied that books etc seized or requisitioned have a bearing on the determination of the total income of such other person.
• Credit of Alternate Minimum Tax u/s 115C shall be allowed.
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