Budget 2012-13

Presented by

CA Rajendra G. Zawar

8/129, Mhada Complex, Opp. Vishal Mega mart, Station road, Aurangabad 431005 Email rgzawar@gmail.com zawar_g@dataone.in Web Site www.zawarassociate.com Contact No. 0240 2350305 / 6629351 Mobile No. - +919423456220

Index
Sr. No. 1 2 3 4 5 6 Particulars Basic Exemption Limit TDS & TCS Provisions Deductions & exemptions International Transaction & Transfer Pricing Minimum Alternative Tax Other Amendments Page Nos. 1 1 2 3 3 4

Section

Particulars Basic Exemption Limits

Senior Citizen Rate Nil 10% 20% 30% Individual (`) Women (`) (`)Age >60 But <80 Yrs 2 Lacs 2 Lacs 5 Lacs 5 Lacs 10 Lacs Above 10 Lacs 2 Lacs 2 Lacs 5 Lacs 5 Lacs 10 Lacs Above 10 Lacs 2.5 Lacs 2.5 Lacs 5 Lacs 5 Lacs 10 Lacs Above 10 Lacs Super Senior Citizen (`)Age >80 Yrs 5 Lacs ---5 Lacs 10 Lacs Above 10 Lacs

TDS & TCS Provisions

TDS will be applicable to Indian resident on expenditure/services incurred, paid Section 9 (1) (i) outside India, availed outside India by means of or in consequence of or by reason of Indian Asset / business connection.
1. Purchase of software or any rights to use property or information. 2. Payment for any transmission by satellite (including up-keeping,

Section 9 (1) (vi) Section 40(a) (ia) Section 201 Section 154 Section 193

amplification, conversion for down-linking of any signal), cable, optic fibre or by any other similar technology will also attract TDS. If the recipient has offered the income & paid the tax, Sec 40(a)(ia) will not be applicable to the assessee. Assessing officer (TDS) is allowed to do rectification U/s 154 in case of deductor. No TDS to be deducted on debenture interest up to Rs. 5000/TDS to be deducted on any remuneration or fees or commission by whatever name called, other than those on which tax is deductible under section 192, to a director of a Company. Non TDS Limit on land compensation increased from Rs. 1 Lac to Rs. 2 Lacs. TDS @ 1% on purchase of urban land / Agriculture land of Rs. 20 Lacs or more (at Govt. value whichever is higher.) - No registry without TDS - TCS to be made 1. on sale of Minerals being coal or lignite or iron ore @ 1% 2.on sale of jewellary in cash for more than Rs. 2 Lacs @ 1% Any delay in TDS/TCS deduction, payment and return FEE (Fine) @ Rs. 200 per day should be paid. TDS/TCS failures attracts minimum penalty of Rs. 10000 & Maximum Penalty of Rs. 100000. -

Section 194J Section 194LA

Section 194LAA Section 206C Section 234E

Section 271H

Deductions & exemptions

Section 10 (10D) (d) Section 10 (48) Section 35 (2AB) (5) If the premium of Life Insurance policy taken after 01.04.12 is more than 10% of its sum assured, maturity amount will not be exempt. If foreign Company sales crude oil in India in Indian Rupees its profit is exempt from tax. Approved R & D expenditure deduction @ 200% to continue up to 31St March, 2017 to all business houses. Warehousing, 100 bed hospital, affordable housing and fertilizer unit to get 150% deduction on Capital Expenditure. Building a hotel of two-star or above category & giving it for operation to other (Rent Income) will be allowed in 35AD for claiming weighted deduction. New business of Bee keeping, Warehousing facility for storage of sugar introduced for claiming 150% weighted deduction. Weighted deduction of 150% to agriculture extension project, skill development project. Gift to HUF by any of its members is allowed & will not amount to income from other source. Premium for payment made on preventive health check up is also allowed up to Rs. 5000/- only (even cash payment is allowed) 80G benefit is allowed for cash donations only up to Rs. 10000/For claiming 80IA benefit of 100% deduction of profit, sale should not be at higher rate than market rate. Power Industry can claim additional depreciation @ 20%. Capital gain on sale of house or residential plot will be exempt if assessee forms a Co., purchase more than 51% shares in Co. & Co. acquires new P & M and starts production out of it. Company can acquire assets up to 1 yr from the date of receipt of subscription. Assessee is allowed to buy the shares up to due date U/s 139(1) The Company, if not utilizes the amount before 139(1) it should deposit the same in specified bank account. The equity shares or new assets shall not be sold for at least 5 yrs. Benefit is available up to 31.03.2017 Interest only on saving account is allowed as deduction & interest on FD is not allowed as deduction up to Rs. 10000/ZA COMMENT: Now banks are making swap from saving account & creating own FDR. It will amount to Interest on saving account & public will be attracted to keep money in saving accounts than FDR. It will give them two benefits 1. Any time liquidity and 2. 80TTA benefit. But caution shall be taken to see that balance in saving account itself shall not get vanished due to some temptation.

Section 35AD (1) Section 35AD (6A) Section 35AD (8) (c) (viii) Section 35CCC, 35CCD Section 56

Section 80D Section 80G

Section 80-IA (8) Sec. 32(1) (iia)

Section 54GB(1)(iii) -

Section 80TTA Deduction in respect of interest on deposits in savings account

International Transaction & Transfer Pricing

If any Company enters into an agreement with CBDT or Central Govt. for advance pricing or any other agreement entered between A.E. or others for any International Transactions, Assessing officer can make the arrangement impermissible avoidance arrangement. - An impermissible avoidance arrangement means arrangement which(a) Creates rights or obligations which are not ordinarily created (b) Results in misuse of the provisions (c) Lacks commercial substance (d) Is entered into not for bona fide purpose (e) An arrangement which results in any tax benefit. If an arrangement is declared to be an impermissible then the consequences shall be determined in such manner as is deemed appropriate in the circumstances of the case. Notice can be issued to - The person having assets outside India. (May or may not be having taxable income) Person who has not filed Transfer Pricing Audit Report. Non Resident assessee now cannot claim benefit of DTAA unless he produces certificate of being Resident of that DTAA country. - The term international transaction is explained to cover all the transactions between two associated enterprises. - This will cover the non-billed services too. Specified domestic transactions of income or expenses shall be calculated having regard to Arms length price in case of Company having international transactions with A.E.. Specified domestic transaction means any of the following transactions, namely1. Any 40A(2)(b) - expenses 2. Transactions on which benefits of Sec 10A, 10B are claimed. 3. 80IA (8) - Inter transfer of goods from eligible business to non eligible business. 4. 80IA (10) - Transfer to closed associates 5. Similar transactions as above. 6. Any other transactions as may be prescribed. ALP working to these transactions is required only if total of these transactions is more than Rs. 5 Crs. Arms length price variation now allowed only up to 3% (not 5%) Section 92CC CBDT allowed to finalize in advance the price for ALP. The agreement shall be valid for such period not exceeding 5 consecutive previous years or as may be specified in the agreement. The agreement is not binding if there is change in law. The board may declare an agreement to be void ab initio, if it finds fraud or misrepresentation of facts. -

Impermissible avoidance arrangement.

Consequence of impermissible avoidance arrangement Section 147

Section 90 Section 92B

Section 92

Section 92BA Meaning of specified domestic transaction

Section 92C (2)

Minimum Alternative Tax

Section 115JC
Section 115JC Special provision for payment of tax by certain persons other than a Co.

MAT on individual, HUF, Co-op. & Partnership firm having total income more than or equal to Rs. 20 Lacs. - If regular income tax payable by a person other than a Co. is less than MAT tax @ 18.5% should be payable. - Person to whom this section applies shall obtain & furnish report of Chartered Accountants on or before the due date. MAT applicable to person who has availed benefit U/S 80H to 80RRB & 10AA (Not 80P)

Section 115 JEE

Other Amendments
Section 2 (14) Section 2 (19AA) (iv) Section 10 (10D) (d) Section 44AB Section 44AD Section 55A Section 56 (viia) Section 68 An Intangible Property is a Capital Asset. If new Company is a shareholder of demerged Company, it may not issue shares to its shareholders on proportionate basis. Key man insurance claim received on death is now taxable. A tax audit limit of business turnover is increased to Rs. 1 Cr & for professionals to Rs. 25 Lacs. Profit on estimation basis @ 8% of gross receipts is not applicable to professionals, brokers, Agency lines. If assessee registers the transaction at higher value than market value of asset with intention to avail tax benefit, A.O. can refer the case to valuation officer. If Company sells its shares at higher rate than FMV excess premium will be treated as income. Cash credit in form of shares/ application money/ premium will not be allowed without proper explanation. - Where the total income of an assessee found any income such as cash credit, unexplained investment or unexplained money or unexplained expenditure or hundi payment, tax should be leviable @ 30% - No deduction against such income. Compulsory return by person not having taxable income but having assets outside India or is signing authority to account outside India. Notice to foreign black money holders can be given up to 16 yr old money. Rectification order is to be deemed as demand notice. No advance tax is to be paid by - Non business person - Senior Citizen

Section 115BBE

Section 139 Section 149 Section 156

Section 207

You may communicate your comments, suggestions & corrections at rgzawar@gmail.com Thanks. -Rajendra G. Zawar