Direct Tax Measures in 2015-16

The levy of wealth tax was abolished and replaced it with an additional surcharge of 2 on the super-rich with a taxable income of over Rs 1 crore.

Investment in Sukanya Samriddhi Scheme was made eligible for deduction u/s 80C of the Income Tax Act, 1961 (the Act).

The limit of deduction u/s 80D of the Act was increased from R 15,000/- to R 25,000/- on health insurance premium (in case of senior citizen from R 20,000/- to R 30,000/-).

The limit of deduction in their case u/s 80DDB of the Act was increased from Rs 60,000/- to Rs. 80,000/- in respect of expenditure on account of specified diseases.

direct taxesThe limit of deduction u/s 80DD and 80U of the Act was increased from R 50,000/- to R 75,000/- in case of disability and from R 1 lakh to R25 lakh in case of severe disability.

An additional deduction of R 50,000 was provided for contribution to the New Pension Scheme under Section 80CCD over and above the limit of R5 lakh.

Exemption limit of transportation allowance was increased from R 800 per month to R 1600 per month to any employee and from R 1600 to R 3200 in case of an employee who is blind, orthopedically handicapped and, deaf and dumb.

Deduction u/s 80JJAA of the Act was extended to all assesses, hitherto available only to companies along with the reduction in eligibility threshold of minimum hundred workmen to fifty.

Pass through status was provided to Category-I and Category-II Alternative Investment Funds governed by the regulations of Securities and Exchange Board of India.

To facilitate relocation of fund managers of offshore funds in India, the permanent establishment norms were modified.

The rate of tax on royalty and fees for technical services was reduced from 25 per cent to 10 per cent.

The indirect transfer provisions were modified to provide clarity regarding its applicability.

The residency requirement regarding companies incorporated outside India was modified.

Yoga was included as a specific category of activity in the definition of ‘charitable purpose’.

The period of applicability of reduced rate of tax at 5 per cent on income of foreign investors (FII and QFI) from corporate bonds and government securities was extended from 31.5.2015 to 30.06.2017.

An additional investment allowance to new manufacturing units set-up during the period 01.04.2015 to 31.03.2020 in notified backward areas of the states of Andhra Pradesh, Bihar, Telangana and West Bengal was provided.

The scope of reporting of foreign remittances was expanded.

The scope of TDS on interest on bank deposits was expanded by bringing the interest on recurring deposits within the ambit of TDS.

The facility for filing self-declaration for certain Insurance payments was provided.

Tax neutrality on transfer of units on merger of similar schemes of a Mutual Fund was provided.

Mechanisms to prevent tax disputes and to provide speedy disposal was strengthened. Scope of advance rulings and settlement of cases was further broadened.

Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act 2015 was enacted and Rules thereunder have been notified.

For collection of Information in non-intrusive manner third party reporting mechanism was broadened and strengthened. Norms for Mandatory Quoting of PAN were also rationalized and broadened.