Glimpses of taxation amendments in budget 2015

Regarding income of all kinds of assessees liable to pay income tax for the assessment year 2015-2016, the rates of income tax have been stated in Part 1 of the First Schedule to the new Budget.
The rates are the same as those laid down in the Finance Act, 2014, as far as computation of “advance tax” and deduction of tax at source from “Salaries” are concerned.

Provision regarding “surcharge”:

Surcharge on income tax shall be levied for income liable to tax for the assessment year 2015 – 2016, in the case of each person or Hindu undivided family or association of persons or body of individuals or each artificial juridical person as mentioned in section 2 (31) (vii) of the Income Tax Act, 1961, as well as in case of cooperative societies, firms, etc.
The amount of tax shall be increased by a surcharge at the rate of 10% of such tax for any person whose total income is more than Rupees 1 crore.
However, marginal relief shall be allowed for persons mentioned above having total income chargeable to income tax under section 15JC of the Act and in case such income is more than Rs. 1 crore, surcharge at the rate mentioned above shall be levied for a domestic company having total income more than Rs. 1 crore but not more than Rs. 10 crore, the amount of income tax computed shall be increased by a surcharge calculated at the rate of 5 % of such income tax and if the said company has a total income of more than Rs. 10 crore, the amount of tax computed shall be increased by a surcharge calculated at the rate of 10% of such tax.
If the company is not a domestic company having total income exceeding Rs. 1 crore but not more than Rs. 10 crore, the amount of income tax computed shall be increased by a surcharge calculated at the rate of 2% of the amount of income tax.
In other cases the surcharge shall be computed at the rate of 10%.

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“Education Cess on income tax”:

For the coming assessment year, an extra surcharge known as the “Education Cess on income tax” and “Secondary and Higher Education Cess on income tax” shall be levied at the rate of 2 % and 1% respectively, on the amount of income tax computed inclusive of surcharge. No marginal relief is allowed for such Cess.

Rates for deduction of tax at source from incomes other than “Salaries”:

The rates for deduction of tax at source during the financial year 2015-16 from incomes other than “Salaries” are stipulated in Part II of the Schedule 1 to the Bill.
The rates for other categories of tax payers will remain the same as those stated in Part II of the Schedule 1 to the Finance Act, 2014, for deduction of tax at source during the financial year 2014-2015, except that in case of payments made to a NRI or a foreign company for income in the form of royalty or fees for technical services, in which cases the rate shall be 10% of such income.

Rates for deduction of tax at source from “Salaries”:

The rates for deduction of tax at source from “Salaries” and also for computation of “advance tax” during the financial year 2015-2016 in the case of all kinds of assessees have been stated in Part III of Schedule 1 to the Bill.
These rates are also applicable for charging tax during the financial year 2015-16 on present incomes in cases where provisional assessment to NRIs for profits arising in India as well as for assessment of persons who might transfer property to avoid tax, etc.
For individuals, Hindu undivided families, association of persons and artificial juridical persons referred to in clause (31) (vii) of section 2 of the Act, Paragraph A of Part-III of Schedule 1 to the Bill provides that no tax shall be levied for income up to Rs.2, 50,000/-
For income up to Rs. 5, 00,000/- tax shall be levied at the rate of 10%. For income ranging from Rs. 5, 00, 001/- to Rs. 10, 00,000/- taxes shall be levied at the rate of 20% and for income above Rs. 10, 00,001/- taxes shall be levied at the rate of 30%.
In the case of every resident in India of the age of sixty years to eighty years no tax shall be levied for income up to Rs.3, 00,000/-
In the case of every resident in India of the age of sixty years to eighty years taxes shall be levied at the rate of 10% for income ranging from Rs. 3,00,001/- to Rs. 5,00,000/- and for income of Rs. 5,00,001/- to Rs.10,00,000/- taxes shall be levied at the rate of 20%. For income above Rs. 10, 00,001/- taxes shall be levied at the rate of 30%.
For individuals being resident in India of the age of eighty years or more no tax shall be levied for income up to Rs.5, 00,000/- For income from Rs. 5,00,001/- to Rs. 10,00,000/- taxes shall be levied at the rate of 20%. For income above Rs. 10, 00,001/- taxes shall be levied at the rate of 30%.

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The amount of income tax for Co-operative Societies:

For co-operative societies, the rates of income tax have been specified in Paragraph B of Part III of Schedule 1 to the Bill. These rates will continue to be the same as was specified for the previous financial year.
The amount of tax shall be increased by a surcharge at the rate of 12% of such income tax in case of a co-operative society the total income of which is not more than Rs. 1 crore.

The amount of income tax for firms:

For firms the rate of income tax has been specified in Paragraph C of Part III of Schedule 1 to the Bill. This rate will continue to be the same as that specified for the previous financial year. The amount of tax shall be increased by a surcharge at the rate of 12% of such income tax in case of a firm the total income of which is more than Rs. 1 crore.

The amount of income tax for Companies:

The rates of income tax for all companies are specified in Paragraph E of Part III of Schedule 1 to the Bill. These rates are the same as those specified for the previous financial year.
Surcharge at the rate of 7% shall be levied for a domestic company if its total income is more than Rs. 1 crore but is less than Rs. 10 crore. The surcharge at the rate of 12% shall be levied if the total income of the domestic company is more than Rs. 10 crore.
In case of companies other than domestic companies the surcharge of 2% shall continue to be levied if its total income is more than Rs. 1 crore but less than Rs. 10 crore. The surcharge at the rate of 5% shall continue to be levied if the total income of the company is more than Rs. 10 crore.

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Steps to check black money:

To check generation of black money through cash dealings in property transactions the Bill has proposed to amend section 269SS of the Income Tax Act to provided that no person shall accept from any person any loan or deposit whether as advance or otherwise, for transfer of an immovable property otherwise than by an account payee cheque or draft or by ECS through a bank account if the said amount is Rs.20, 000/- or more.
It has also proposed to amend section 269T of the Act to provide that no person shall repay any loan or deposit otherwise than by an account payee cheque or draft or by ECS through a bank account, if the amount of loan or deposit is Rs. 20,000/- or more.
It is further proposed to amend section 271D and section 271E to provide penalty in case of failure to comply with the provisions of section 269SS and 269T of the Act.