Budget Bulletin. – TaxDose.com

NPS gets EXEMPTED on Withdrawal
Finance minister Arun Jaitley in the budget speech announced tax exemption of 40% on withdrawal from NPS. In order to understand implications of NPS on subscribers it is implicit to understand NPS. NPS gets EXEMPTED on Withdrawal.

National Pension Scheme (NPS) is a defined contribution plan operated by Government of India wherein a subscriber contributes to his own account. It provides a range of investment options for investors. It generally comes in two tiers; Tier 1 is a basic retirement pension account which does not allow withdrawal of funds before retirement while tier-2 is a Prospective Payment System (PPS) and permits withdrawal of some pension before retirement.Read More

Budget 2016: Rationalization of Income Tax Laws to control Corruption and Litigation
In a welcome move, The Finance Minister, has taken steps towards rationalization of tax laws to bring down corruption and also the unwanted litigation. Key changes are being highlighted as below:

1. Income Declaration Scheme, 2016 – Taking forward the steps to control black money and ensure more compliance, the government has proposed a declaration scheme, wherein, undisclosed income and assets can be declared and taxed at 30% rate of tax, with a surcharge of 25% on tax and a penalty of 25%, with no further enquiry, scrutiny and assessment.Read More

No TDS @ 20 % even without PAN in case of foreign payments
The government has done away of requirement of PAN in case of foreign payments, thus, now no TDS @ 20 % even without PAN in case of foreign payments. This can be seen as one more welcome step towards ease of doing business and rationalization of tax deduction on payments made to foreign persons.

Clause 85 of the Bill seeks to amend section 206AA of the Income-tax Act relating to requirement to furnish Permanent Account Number. The aforesaid section, inter alia, provides that any person who is entitled to receive any sum or income or amount on which tax is deductible at source under Chapter XVII shall furnish his Permanent Account Number to the deductor, failing which tax shall be deducted at the rate mentioned in the relevant provisions of the Act or at the rate in force or at the rate of twenty per cent., whichever is higher.Read More

FDI Liberalization in Budget 2016
The budget of 2016 has brought bold steps by facilitating FDI in various sectors. As per the proposal there is significant relaxation in the FDI policy of the Government in several sectors, including insurance, pension, asset reconstruction companies and Food Processing Industry to attract more overseas investments. FDI Liberalization in Budget 2016.

FDI into India has already increased by 40% to US$ 29.44 billion during April-December in the current fiscal. The move is expected to further boost the foreign investment cycle in the country.Read More

Deduction for rent payers raised to Rs. 60000 u/s 80GG
Finance minister Arun Jaitley unveiled reforms in Budget 2016. For Individuals and small taxpayers, FM has raised the maximum deduction available under Section 80GG to Rs.60,000 per annum from Rs.24000 per annum. This reform will benefit the individual taxpayers to claim the deduction for the rent paid by them upto Rs.60000 per annum as per the provisions of Section 80GG Of Income Tax Act, 1961.

“The people who do not have any house of their own and also do not get any house rent allowance from any employer today get a deduction of Rs 24,000 per annum from their income to compensate them for the rent they pay. I propose to increase the limit of deduction in respect of rent paid under section 80GG from Rs 24,000 per annum to Rs 60,000 per annum, which should provide relief to those who live in rented houses, ” Finance Minister Arun Jaitley said in his budget speech. Deduction for rent payers raised to Rs. 60000 u/s 80GG.Read More

Additional relief for small taxpayers of Rs. 3000 u/s 87A – Budget 16
Finance Minister Arun Jaitley presented India’s National Budget today, focusing over stagnating growth, the state of government finances and stuttering pace of reforms. Presenting his third budget, Jaitley described Asia’s third-largest economy as a bright spot in a gloomy landscape and reiterated a forecast that it would grow by 7.6% in the fiscal year that is drawing to a close.

FM focused on small taxpayers and announced several changes in the different areas of Income Tax Act, 1961. Budget 2016 is to provide relief to small taxpayers through rebates.