December 14, 2018

Silent Feature of Budget 2018/ Highlights of Budget 2018

Silent Feature of Budget 2018/ Highlights of Budget 2018

  1. Rate of Tax: There is no change in Rate of Tax : All persons including individuals, HUF, Firms and Companies to pay same tax . However Education cess is being increased from 3 to 4 % to be known as Education and Health cess.
  2. Rate of Corporate Tax: : However for Domestic Companies having total turnover or gross receipts not exceeding Rs 250 crores in Financial year 2016-17 shall be liable tp pay tax at 25% as against present ceiling of Rs 50 crore in Financial year 2015-16.
  3. Withdrawal of Long Term Capital gain Exemption: Exemption U/s 10(38) in respect of LTCG arises on transfer of Equity shares on which STT paid was earlier exempt now it became taxable @ 10%, the cost of acquisition shall be taken as FMV as on 31.01.2018, no indexation benefit available, however LTCG to the extent of Rs. 1,00,000/- shall be exempt.
  4. Tax on STT paid long term capital Gain will be 10% under Section 112A. Further such tax will be liable for TDS.
  5. Standard deduction to Salaried employees: there is a standard deduction of Rs. 4,0000/ has been allowed to all salaried employees, however the transport allowances to the extent of Rs. 19200/- and medical allowances to the extent of Rs. 15,000/- has been withdrawn net effected benefit to the salaried employees is Rs. 5,800/-.
  6. Provision of Section 43CA, 50C and 56(2)(x) being amended to allow 5% of sale consideration in variation vis a vis stamp duty value. On account of location, disadvantage etc.
  7. Provision of section 40(ia) and 40A(3) and 40A(3A)are being made applicable to Charitable Trust . Hence expenditure incurred without deduction of tax and in cash will not be eligible as application of income under section 10(23C) and section 11(1)(a).
  8. Agriculture Commodity Derivate income /loss also not to be considered as speculative under section 43(5).
  9. Income Computation and Disclosure Standards(ICDS) being given statutory backing in view of decision of Delhi High Court decision.
  10. Construction Contract income to be computed on percentage completion method as per ICDS.
  11. Valuation of Inventorty including Securities to be as per ICDS.
  12. Interest on compensation, enhanced compensation. Claim or enhancement claim and subsidy, incentives to be taxed in the year of receipt only as per new Section 145B
  13. Conversion of stock in trade to capital asset to be charged as business income in the year of conversion on Fair Market value on the date of conversion.
  14. 54EC benefit of investment in Bonds to be restricted to Capital gain on land and building only. Further period of holding being increased from 3 years to 5 years.
  15. PAN to be obtained by all entities including HUF other than individuals in case aggregate of financial transaction in a year is Rs 2,50,000 or more. All directors, partners, members of such entities also to obtain PAN.
  16. All companies irrespective of income to file return and in case it is not filed, such companies will be liable for prosecution irrespective of the fact weather it has tax liability of Rs 3,000 or not.
  17. Assessments to be E assessment under new section 143(3A).
  18. No adjustment under section 143(1) while processing on account of mismatch with 26AS and 16A.
  19. Deemed dividend to be taxed in the hands of the company itself as Dividend Distribution of tax @ 30%.
  20. Penalty for non filing financial return as required under section 285BA being increased to Rs 500 per day .

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