INSOLVENCY AND BANKRUPTCY CODE, 2016 - A welcome step and opportunities for practicing professionals

INSOLVENCY AND BANKRUPTCY CODE, 2016 

A welcome step and opportunities for practicing professionals

CLICK HERE TO DOWNLOAD 

FREE E BOOK

LIKE, SHARE AND SUBSCRIBE TO GET MORE UPDATES AND FREE BOOKS,
Please click on adds for supporting us for the maintenance of this website. 

A BRIEF NOTE ON COMPARISON BETWEEN REBATE AND REFUND OF DUTY

A BRIEF NOTE ON COMPARISON BETWEEN REBATE AND REFUND OF DUTY UNDER THE INDIRECT TAXATION

Rule 18 of the Central Excise Rules, 2002 provides for Rebate of duty, it states that Central Government may by notification in the official gazette grant rebate of Duty paid on excisable goods (Final goods), or duty paid on material (input) used in manufacturing process or manufacture of goods.

However the same is subject to some conditions or limitations and procedure. Government has issued a notification in which it has specified the conditions and procedure to be followed to claim rebate of duty. (Please refer Notification No. 19/2004 and 42/2001 for condition and procedure)

For instance: In case, an item has been manufactured in India and excise duty on the same has been paid by the manufacturer and in case this item is exported then exporter can claim rebate of duty. Therefore, it can said that person who bear the burden of duty (i.e., manufacturer) and the person (i.e., 

Exporter) who actually claim the rebate may be different. Rebate is a synonym of refund.

All provision regard rebate of duty has been articulated as under:

On the other hand, Refund of duty has been prescribed under Section 11B of the Central Excise Act, 1944. The definition of refund includes rebate of duty on excisable goods which are exported outside India.

Refund of duty can be claimed on import as well as export of goods, there are certain circumstances like duty paid in excess of what was actually leviable, when duty is provisionally assessed and in case of pilferage (petty theft) of goods.

The Application of refund shall be filed within 1 year in specified Form to AC/DC from the relevant date.

*****

BUDGET 2017-18 HIGHLIGHTS: TAX CUTS, LIMITS ON POLITICAL FUNDING IN ARUN JAITLEY’S BUDGET

BUDGET 2017-18 HIGHLIGHTS: TAX CUTS, LIMITS ON POLITICAL FUNDING IN ARUN JAITLEY’S BUDGET

This year, the Finance Minister presented a budget of Rs 21,47,000 crore which is 8.6% higher than Rs 19,78,060, the last year’s financial roll out.

The fiscal road-map Budget 2017 for the year 2017-18 was presented by Finance Minister Arun Jaitley on Feb 1st in Parliament. This year, the Finance Minister presented a budget of Rs 21,47,000 crore which is 8.6% higher than Rs 19,78,060, the last year’s financial roll out. Last year, the allocation of budget for the economic year 2016-17 was 10.8% higher than Rs 17,65,436 crore which was presented for the fiscal year 2015-16.

The Budget is based on 10 themes. These are:

1.      Double farm income in five years;

2.      Rural infrastructure;

3.      Youth skills and jobs;

4.      Social security, health, housing;

5.      Efficient and better living standards;

6.      Growth and stability;

7.      Digital economy;

8.      Public service through people’s participation;

9.      Prudent fiscal management;

10.  Tax Administration: Honouring the honest

The budget was prepared while keeping a focus on rural areas, infrastructure and poverty alleviation, yet maintain best standards of fiscal prudence. As per the budget 2017, the government will spend more on these sectors.

Let’s look at the highlights of the Budget 2017:

• Total allocation: Rs 21,47,000 crore;
•  Rs 2.74 lakh crore to Defence excluding pension;
• Rs 8,000 crore to be allocated to dairy processing infrastructure fund which will be set up under NABARD;
• Setup of mini labs by qualified local entrepreneurs in all 648 Krishi Vigyan Kendras Mini;
• Rs 10 lakh crore set as agricultural loans to farmers in 2017-18;
• Rs 48,000 crore to MNREGA which is 23% higher than Rs 37,000 which was allocated to MNREGA last year;
• 1 crore house by 2019;
• Rs 23,000 crore allocation to PM Ayas Yojana which is was Rs 15,000 crore in last budget;
• 100% village electrification by May 1, 2018;
• Pipe to water supply to open-defecation villages;
• Initial corpus of Rs 5,000 crore to micro-irrigation fund which will b set up by NABARD to achieve goal of ‘Per Drop More Crop’;
• Rs 187,223 crore to Rural, Agricultural and allied sectors which is 24% higher than last year’s allocation to the sector;
• Colleges will be given autonomous status;
• Science will be given focus;
• For Youth, introduction of a system of measuring annual learning;
• 5,000 PG seats for medical sciences;
• 2 Medical sciences centres in Jharkhand and Gujarat;
• Rs 38,800 to Rs 52,000 allocation to Scheduled Castes;
• For senior citizens, Aadhaar cards to have healt condition;
• Rs 64,000 crore to highways which is 9.8% increase from last year’s Rs 57,676 crore;
• Rs 2.41 lakh crore to Transport; Rs 10,000 crore to Bharat Net Project;
• Rs 10,000 crore to re-capitalisation of banks;
• Capital gains tax to be exempted for persons holding land from which land was pooled for creation of state capital of Andhra Pradesh;
• Rs 37,435 crore to scientific ministry;
• Advance tax on personal Income tax increased by 34.8%;
• 5% reduction on Income tax for small companies with an annual turn over of Rs 50 crore;
• Basic customs reduced from 5% to 2.5% on LNG terminals;
• Minimum Alternative Tax removed;
• 2.5% reduction on basic customs duty on LNG;
• Rs 2000 limit on cash donations to charities;
• No cash transaction above Rs 3 lakh;
• Reduction on rate of taxation to those with income between 2.5 lakh to 5 lakh from 10% to 5%;
• 15% surcharge on incomes above Rs 1 crore to continue;
• 10% surcharge for those with annual income of Rs 50 lakh to 1 crore;

Railways:

• Rs 100,000 crore to rail safety fund which will be created in next five years;
• Bio-toilets in Indian Railway coaches; 3,500 railway lines will be commissioned;
• No service charges on railway e-tickets;
• More jobs for youth.

Apart from this, Foreign Investment Promotion Board will be out in 2017 for an easier FDI regime. Arun Jaitley also said that Mission Antyodaya will be launched to bring one crore households out of poverty and to make 50,000 Gram Panchayats poverty-free. 20 lakh Aadhaar-based swipe machines will be put up by the year 2020.

*****

Most important features of Budget 2017 that you shouldn't miss

Union Budget 2017-18: Income tax relief, political funding, highlights of Arun Jaitley’s fourth budget

• Growth of Economy accelerated to 7.6% in 2015-16. 
• India hailed as a ‘bright spot’ amidst a slowing global economy by IMF.
• Robust growth achieved despite very unfavourable global conditions and two consecutive years shortfall in monsoon by 13%
• Foreign exchange reserves touched highest ever level of about 350 billion US dollars.
• Despite increased devolution to States by 55% as a result of the 14th. Finance Commission award, plan expenditure increased at RE stage in 2015-16 – in contrast to earlier years.

CHALLENGES IN 2016-17

• Risks of further global slowdown and turbulence.
• Additional fiscal burden due to 7th Central Pay Commission recommendations and OROP.

ROADMAP & PRIORITIES

• Transform India' to have a significant impact on economy and lives of people.
• Government to focus on –

1. ensuring macro-economic stability and prudent fiscal management.
2. boosting on domestic demand
3. continuing with the pace of economic reforms and policy initiatives to change the lives of our people for the better.

• Focus on enhancing expenditure in priority areas of - farm and rural sector, social sector, infrastructure sector employment generation and recapitalisation of the banks.
• Focus on Vulnerable sections through:
• Pradhan Mantri Fasal Bima Yojana
• New health insurance scheme to protect against hospitalisation expenditure facility of cooking gas connection for BPL families
• Continue with the ongoing reform programme and ensure passage of the Goods and Service Tax bill and Insolvency and Bankruptcy law
• Undertake important reforms by: giving a statutory backing to AADHAR platform to ensure benefits reach the deserving.
• freeing the transport sector from constraints and restrictions ? incentivising gas discovery and exploration by
• providing calibrated marketing freedom
• enactment of a comprehensive law to deal with resolution of financial firms
• provide legal framework for dispute resolution and re-negotiations in PPP projects and public utility contracts
• undertake important banking sector reforms and public listing of general insurance companies undertake significant
• changes in FDI policy.

AGRICULTURE AND FARMERS’ WELFARE

• Allocation for Agriculture and Farmers’ welfare is Rs 35,984 crore
•  ‘Pradhan Mantri Krishi Sinchai Yojana’ to be implemented in mission mode. 28.5 lakh hectares will be brought under irrigation.
• Implementation of 89 irrigation projects under AIBP, which are languishing for a long time, will be fast tracked
• A dedicated Long Term Irrigation Fund will be created in NABARD with an initial corpus of about Rs 20,000 crore
• Programme for sustainable management of ground water resources with an estimated cost of Rs 6,000 crore will be implemented through multilateral funding
• 5 lakh farm ponds and dug wells in rain fed areas and 10 lakh compost pits for production of organic manure will be taken up under MGNREGA
• Soil Health Card scheme will cover all 14 crore farm holdings by March 2017.
• 2,000 model retail outlets of Fertilizer companies will be provided with soil and seed testing facilities during the next three years
• Promote organic farming through ‘Parmparagat Krishi Vikas Yojana’ and 'Organic Value Chain Development in North East Region'.
• Unified Agricultural Marketing ePlatform to provide a common e- market platform for wholesale markets ?
• Allocation under Pradhan Mantri Gram Sadak Yojana increased to 19,000 crore. Will connect remaining 65,000 eligible habitations by 2019.
• To reduce the burden of loan repayment on farmers, a provision of Rs 15,000 crore has been made in the BE 2016- 17 towards interest subvention
• Allocation under Prime Minister Fasal Bima Yojana Rs 5,500 crore.
• Rs 850 crore for four dairying projects - ‘Pashudhan Sanjivani’, ‘Nakul Swasthya Patra’, ‘E-Pashudhan Haat’ and National Genomic Centre for indigenous breeds.

RURAL SECTOR

• Allocation for rural sector - RS 87,765 crore.
• Rs 2.87 lakh crore will be given as Grant in Aid to Gram Panchayats and Municipalities as per the recommendations of the 14th Finance Commission
• Every block under drought and rural distress will be taken up as an intensive Block under the Deen Dayal

ANTYODAYA MISSION 

• A sum of Rs 38,500 crore allocated for MGNREGS.
• 300 Rurban Clusters will be developed under the Shyama Prasad Mukherjee Rurban Mission
• 100% village electrification by 1st May, 2018.
• District Level Committees under Chairmanship of senior most Lok Sabha MP from the district for monitoring and implementation of designated Central Sector and Centrally Sponsored Schemes.
• Priority allocation from Centrally Sponsored Schemes to be made to reward villages that have become free from open defecation.
• A new Digital Literacy Mission Scheme for rural India to cover around 6 crore additional household within the next 3 years.
• National Land Record Modernisation Programme has been revamped. ? New scheme Rashtriya Gram Swaraj
• Abhiyan proposed with allocation of Rs 655 crore.

SOCIAL SECTOR INCLUDING HEALTH CARE

• Allocation for social sector including education and health care – Rs 1,51,581 crore
• Rs 2,000 crore allocated for initial cost of providing LPG connections to BPL families
• New health protection scheme will provide health cover up to Rs One lakh per family
• For senior citizens an additional top-up package up to Rs 30,000 will be provided
• Rs 3,000 Stores under Prime Minister’s Jan Aushadhi Yojana will be opened during 2016-17
• ‘National Dialysis Services Programme’ to be started under National Health Mission through PPP mode
• “Stand Up India Scheme” to facilitate at least two projects per bank branch. This will benefit at least 2.5 lakh entrepreneurs. ? National Scheduled Caste and Scheduled Tribe Hub to be set up in partnership with industry associations
• Allocation of Rs 100 crore each for celebrating the Birth Centenary of Pandit Deen Dayal Upadhyay and the 350th
• Birth Anniversary of Guru Gobind Singh.

EDUCATION, SKILLS AND JOB CREATION

• 62 new Navodaya Vidyalayas will be opened
• Sarva Shiksha Abhiyan to increasing focus on quality of education
• Regulatory architecture to be provided to ten public and ten private institutions to emerge as world-class Teaching and Research Institutions
• Higher Education Financing Agency to be set-up with initial capital base of Rs 1000 Crores
• Digital Depository for School Leaving Certificates, College Degrees, Academic Awards and Mark sheets to be setup.

SKILL DEVELOPMENT

• Allocation for skill development – Rs 1804. crore.
• 1500 Multi Skill Training Institutes to be set-up.
• National Board for Skill Development Certification to be setup in partnership with the industry and academia
• Entrepreneurship Education and Training through Massive Open Online Courses

JOB CREATION

• GoI will pay contribution of 8.33% for of all new employees enrolling in EPFO for the first three years of their employment. Budget provision of Rs 1000 crore for this scheme.
• Deduction under Section 80JJAA of the Income Tax Act will be available to all assesses who are subject to statutory audit under the Act
• 100 Model Career Centres to operational by the end of 2016-17 under National Career Service.
• Model Shops and Establishments Bill to be circulated to States.

INFRASTRUCTURE AND INVESTMENT

• Total investment in the road sector, including PMGSY allocation, would be Rs 97,000 crore during 2016-17.
• India’s highest ever kilometres of new highways were awarded in 2015.
• To approve nearly 10,000 kms of National Highways in 2016-17.
• Allocation of Rs 55,000 crore in the Budget for Roads. Additional Rs 15,000 crore to be raised by NHAI through bonds.
• Total outlay for infrastructure - Rs 2,21,246 crore.
• Amendments to be made in Motor Vehicles Act to open up the road transport sector in the passenger segment ?
• Action plan for revival of unserved and underserved airports to be drawn up in partnership with State Governments.
• To provide calibrated marketing freedom in order to incentivise gas production from deep-water, ultra deep-water and high pressure-high temperature areas
• Comprehensive plan, spanning next 15 to 20 years, to augment the investment in nuclear power generation to be drawn up.
• Steps to re-vitalise PPPs:
• Public Utility (Resolution of Disputes) Bill will be introduced during 2016-17
• Guidelines for renegotiation of PPP Concession Agreements will be issued
• New credit rating system for infrastructure projects to be introduced
• Reforms in FDI policy in the areas of Insurance and Pension, Asset Reconstruction Companies, Stock Exchanges.
• 100% FDI to be allowed through FIPB route in marketing of food products produced and manufactured in India.
• A new policy for management of Government investment in Public Sector Enterprises, including disinvestment and strategic sale, approved.

FINANCIAL SECTOR REFORMS

• A comprehensive Code on Resolution of Financial Firms to be introduced.
• Statutory basis for a Monetary Policy framework and a Monetary Policy Committee through the Finance Bill 2016.
• A Financial Data Management Centre to be set up.
• RBI to facilitate retail participation in Government securities. ? New derivative products will be developed by SEBI in the Commodity Derivatives market.
• Amendments in the SARFAESI Act 2002 to enable the sponsor of an ARC to hold up to 100% stake in the ARC and permit non institutional investors to invest in Securitization Receipts.
• Comprehensive Central Legislation to be bought to deal with the menace of illicit deposit taking schemes.
• Increasing members and benches of the Securities Appellate Tribunal.
• Allocation of ` 25,000 crore towards recapitalisation of Public Sector Banks.
• Target of amount sanctioned under Pradhan Mantri Mudra Yojana increased to Rs 1,80,000 crore.
• General Insurance Companies owned by the Government to be listed in the stock exchanges.

GOVERNANCE AND EASE OF DOING BUSINESS

• A Task Force has been constituted for rationalisation of human resources in various Ministries.
• Comprehensive review and rationalisation of Autonomous Bodies.
• Bill for Targeted Delivery of Financial and Other Subsidies, Benefits and Services by using the Aadhar framework to be introduced.
• Introduce DBT on pilot basis for fertilizer.
• Automation facilities will be provided in 3 lakh fair price shops by March 2017.
• Amendments in Companies Act to improve enabling environment for start-ups.
• Price Stabilisation Fund with a corpus of Rs 900 crore to help maintain stable prices of Pulses.
•  “Ek Bharat Shreshtha Bharat” programme will be launched to link States and Districts in an annual programme that connects people through exchanges in areas of language, trade, culture, travel and tourism.

FISCAL DISCIPLINE

• Fiscal deficit in RE 2015-16 and BE 2016-17 retained at 3.9% and 3.5%. ? Revenue Deficit target from 2.8% to 2.5% in RE 2015-16
• Total expenditure projected at Rs 19.78 lakh crore
• Plan expenditure pegged at Rs 5.50 lakh crore under Plan, increase of 15.3%
• Non-Plan expenditure kept at Rs 14.28 lakh crores
• Special emphasis to sectors such as agriculture, irrigation, social sector including health, women and child development, welfare of Scheduled Castes and Scheduled Tribes, minorities, infrastructure.
• Mobilisation of additional finances to the extent of Rs 31,300 crore by NHAI, PFC, REC, IREDA, NABARD and Inland Water Authority by raising Bonds.
• Plan / Non-Plan classification to be done away with from 2017-18.
• Every new scheme sanctioned will have a sunset date and outcome review.
• Rationalised and restructured more than 1500 Central Plan Schemes into about 300 Central Sector and 30
• Centrally Sponsored Schemes.
• Committee to review the implementation of the FRBM Act.

RELIEF TO SMALL TAX PAYERS

• Raise the ceiling of tax rebate under section 87A from Rs 2000 to Rs 5000 to lessen tax burden on individuals with ncome upto Rs 5 laks.
• Increase the limit of deduction of rent paid under section 80GG from Rs 24000 per annum to Rs 60000, to provide relief to those who live in rented houses.

BOOST EMPLOYMENT AND GROWTH

• Increase the turnover limit under Presumptive taxation scheme under section 44AD of the Income Tax Act to Rs 2 crores to bring big relief to a large number of assessees in the MSME category.
• Extend the presumptive taxation scheme with profit deemed to be 50%, to professionals with gross receipts up to Rs 50 lakh.
• Phasing out deduction under Income Tax: ? Accelerated depreciation wherever provided in IT Act will be limited to maximum 40% from 1.4.2017
• Benefit of deductions for Research would be limited to 150% from 1.4.2017 and 100% from 1.4.2020
• Benefit of section 10AA to new SEZ units will be available to those units which commence activity before 31.3.2020.
• The weighted deduction under section 35CCD for skill development will continue up to 1.4.2020
• Corporate Tax rate proposals:
• New manufacturing companies incorporated on or after 1.3.2016 to be given an option to be taxed at 25% + surcharge and cess provided they do not claim profit linked or investment linked deductions and do not avail of investment allowance and accelerated depreciation.
• Lower the corporate tax rate for the next financial year for relatively small enterprises i.e companies with turnover not exceeding Rs 5 crore (in the financial year ending March 2015), to 29% plus surcharge and cess.
• 100% deduction of profits for 3 out of 5 years for startups setup during April, 2016 to March, 2019. MAT will apply in such cases. ? 10% rate of tax on income from worldwide exploitation of patents developed and registered in India by a resident.
• Complete pass through of income-tax to securitization trusts including trusts of ARCs. Securitisation trusts required to deduct tax at source.
• Period for getting benefit of long term capital gain regime in case of unlisted companies is proposed to be reduced from three to two years.
• Non-banking financial companies shall be eligible for deduction to the extent of 5% of its income in respect of provision for bad and doubtful debts.
• Determination of residency of foreign company on the basis of Place of Effective Management (POEM) is proposed to be deferred by one year.
• Commitment to implement General Anti Avoidance Rules (GAAR) from 1.4.2017.
• Exemption of service tax on services provided under Deen Dayal Upadhyay Grameen Kaushalya Yojana and services provided by Assessing Bodies empanelled by Ministry of Skill Development & Entrepreneurship.
• Exemption of Service tax on general insurance services provided under ‘Niramaya’ Health Insurance Scheme launched by National Trust for the Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disability. ? Basic custom and excise duty on refrigerated containers reduced to 5% and 6%.

MAKE IN INDIA

• Changes in customs and excise duty rates on certain inputs to reduce costs and improve competitiveness of domestic industry in sectors like Information technology hardware, capital goods, defence production, textiles, mineral fuels & mineral oils, chemicals & petrochemicals, paper, paperboard & newsprint, Maintenance repair and overhauling [MRO] of aircrafts and ship repair.

MOVING TOWARDS A PENSIONED SOCIETY

• Withdrawal up to 40% of the corpus at the time of retirement to be tax exempt in the case of National Pension Scheme (NPS). Annuity fund which goes to legal heir will not be taxable.
• In case of superannuation funds and recognized provident funds, including EPF, the same norm of 40% of corpus to be tax free will apply in respect of corpus created out of contributions made on or from 1.4.2016.
• Limit for contribution of employer in recognized Provident and Superannuation Fund of Rs 1.5 lakh per annum for taking tax benefit. Exemption from service tax for Annuity services provided by NPS and Services provided by EPFO to employees.
• Reduce service tax on Single premium Annuity (Insurance) Policies from 3.5% to 1.4% of the premium paid in certain cases.

PROMOTING AFFORDABLE HOUSING

• 100% deduction for profits to an undertaking in housing project for flats upto 30 sq. metres in four metro cities and 60 sq. metres in other cities, approved during June 2016 to March 2019 and completed in three years. MAT to apply.
• Deduction for additional interest of Rs 50,000 per annum for loans up to Rs 35 lakh sanctioned in 2016-17 for first time home buyers, where house cost does not exceed Rs 50 lakh.
• • Distribution made out of income of SPV to the REITs and INVITs having specified shareholding will not be subjected to Dividend Distribution Tax, in respect of dividend distributed after the specified date.
• Exemption from service tax on construction of affordable houses up to 60 square metres under any scheme of the Central or State Government including PPP Schemes.
• Extend excise duty exemption, presently available to Concrete Mix manufactured at site for use in construction work to Ready Mix Concrete.

RESOURCE MOBILIZATION FOR AGRICULTURE, RURAL ECONOMY AND CLEAN ENVIRONMENT

• Additional tax at the rate of 10% of gross amount of dividend will be payable by the recipients receiving dividend in excess of Rs 10 lakh per annum.
• Surcharge to be raised from 12% to 15% on persons, other than companies, firms and cooperative societies having income above Rs 1 crore.
• Tax to be deducted at source at the rate of 1 % on purchase of luxury cars exceeding value of Rs 10 lakh and purchase of goods and services in cash exceeding Rs 2 lakh.
• Securities Transaction tax in case of ‘Options’ is proposed to be increased from .017% to .05%.
• Equalization levy of 6% of gross amount for payment made to non- residents exceeding Rs 1 lakh a year in case of B2B transactions.
• Krishi Kalyan Cess, @ 0.5% on all taxable services, w.e.f. 1 June 2016. Proceeds would be exclusively used for financing initiatives for improvement of agriculture and welfare of farmers. Input tax credit of this cess will be available for payment of this cess.
• Infrastructure cess, of 1% on small petrol, LPG, CNG cars, 2.5% on diesel cars of certain capacity and 4% on other higher engine capacity vehicles and SUVs. No credit of this cess will be available nor credit of any other tax or duty be utilized for paying this cess.
• Excise duty of ‘1% without input tax credit or 12.5% with input tax credit’ on articles of jewellery [excluding silver jewellery, other than studded with diamonds and some other precious stones], with a higher exemption and eligibility limits of Rs 6 crores and Rs 12 crores respectively.
• Excise on readymade garments with retail price of Rs 1000 or more raised to 2% without input tax credit or 12.5% with input tax credit.
• Clean Energy Cess’ levied on coal, lignite and peat renamed to ‘Clean Environment Cess’ and rate increased from Rs 200 per tonne to Rs 400 per tonne.
• Excise duties on various tobacco products other than beedi raised by about 10 to 15%.
• Assignment of right to use the spectrum and its transfers has been deducted as a service leviable to service tax and not sale of intangible goods.

PROVIDING CERTAINITY IN TAXATION

• Committed to providing a stable and predictable taxation regime and reduce black money.
• Domestic taxpayers can declare undisclosed income or such income represented in the form of any asset by paying tax at 30%, and surcharge at 7.5% and penalty at 7.5%, which is a total of 45% of the undisclosed income.
• Declarants will have immunity from prosecution. ? Surcharge levied at 7.5% of undisclosed income will be called Krishi Kalyan surcharge to be used for agriculture and rural economy.
• New Dispute Resolution Scheme to be introduced. No penalty in respect of cases with disputed tax up to Rs 10 lakh. Cases with disputed tax exceeding Rs 10 lakh to be subjected to 25% of the minimum of the imposable penalty. Any pending appeal against a penalty order can also be settled by paying 25% of the minimum of the imposable penalty and tax interest on quantum addition.
• High Level Committee chaired by Revenue Secretary to oversee fresh cases where assessing officer applies the retrospective amendment. ? One-time scheme of Dispute Resolution for ongoing cases under retrospective amendment.
• Penalty rates to be 50% of tax in case of underreporting of income and 200% of tax where there is misreporting of facts.
• Disallowance will be limited to 1% of the average monthly value of investments yielding exempt income, but not exceeding the actual expenditure claimed under rule 8D of Section 14A of Income Tax Act.
• Time limit of one year for disposing petitions of the tax payers seeking waiver of interest and penalty.
• Mandatory for the assessing officer to grant stay of demand once the assesse pays 15% of the disputed demand, while the appeal is pending before Commissioner of Income-tax (Appeals).
• Monetary limit for deciding an appeal by a single member Bench of ITAT enhanced from Rs 15 lakhs to Rs 50 lakhs.
• 11 new benches of Customs, Excise and Service Tax Appellate Tribunal(CESTAT).

 SIMPLIFICATION AND RATIONALIZATION OF TAXES

• 13 cesses, levied by various Ministries in which revenue collection is less than Rs 50 crore in a year to be abolished. ? For non-residents providing alternative documents to PAN card, higher TDS not to apply.
• Revision of return extended to Central Excise assesses.
• Additional options to banking companies and financial institutions, including NBFCs, for reversal of input tax credits
• with respect to non- taxable services. ? Customs Act to provide for deferred payment of customs duties for importers and exporters with proven track record. ? Customs Single Window Project to be implemented at major ports and airports starting from beginning of next financial year.
• Increase in free baggage allowance for international passengers. Filing of baggage only for those carrying dutiable goods.

TECHNOLOGY FOR ACCOUNTABILITY

• Expansion in the scope of e-assessments to all assessees in 7 mega cities in the coming years.
• Interest at the rate of 9% p.a against normal rate of 6% p.a for delay in giving effect to Appellate order beyond ninety days.
• ‘e-Sahyog’ to be expanded to reduce compliance cost, especially for small taxpayers.

Video: Union Budget 2017 in 60 seconds

Most important features of Budget 2017 that you shouldn't miss

Union Budget 2017: Highlights of Arun Jaitley’s budget

HERE ARE THE HIGHLIGHTS OF UNION BUDGET 2017

Finance Minister Mr. Arun Jaitley presented the Union Budget 2017, his fourth annual budget, today. Here are the highlights of this year's budget:

• Income Tax rate cut to 5 % for individuals having income between Rs 2.5 lakh to Rs 5 lakh;
• 10 % surcharge on individual income above Rs 50 lakh and upto Rs 1 cr to make up for Rs 15,000 cr loss of due to cut in personal I-T rate;
• 15 % surcharge on income above Rs 1 cr to continue;
• Of 3.7 cr individuals who filed tax returns in 2015-16, 99 lakh showed income below exemption limit;
• Direct tax collection not commensurate with income and expenditure pattern;
• Revenue deficit reduced to 2.1 % from 2.3 % for 2016-17;
• Govt pegs fiscal deficit target at 3.2 per cent for 2017-18 and 3 per cent for next year;
• Monetary policy to be expansionary in major economies;
• More steps will be taken to benefit farmers and the weaker sections; budget being presented during weak global economy;
• Pace of remonetisation has picked up demonetisation effects will not spill over to next year;
• Functional autonomy of the railways to be maintained;
• Demonetisation will help in transfer of resources from tax evaders to government;
• Merger of Railways Budget with General Budget brings focus on a multi-modal approach for development of railways, highways and inland water transport;
• Only transient impact on economy due to demonetisation; long term benefit include higher GDP growth and tax revenue;
• GDP will be bigger, cleaner after demonetisation;
• Govt took two tectonic policy initiatives - passage of GST Bill and demonetisation;
• Demonetisation was a continuation of series of measures taken by govt in 2 yrs; it is bold and decisive measure;
• We are seen as engine of global growth; IMF sees India to grow fastest in major economies;
• 36 % increase in FDI flow; forex reserves at USD 361 billion in January enough to cover 12 months needs;
• CAD declined from 1 % last year to 0.3 % in first half of current fiscal: FM;
• India has emerged as bright spot in the world: FM;
• Uncertainty around commodity prices especially oil to have impact on emerging economies: FM;
• Double digit inflation has been controlled; sluggish growth replaced by high growth; war on blackmoney launched: FM;
• We have moved from discretionary based administration to policy based administration: FM Jaitley;
• Agricultural sector is expected to grow at 4.1 per cent this fiscal, says Jaitley;
• Demonetisation was a bold and decisive strike in a series of measures to arrive at a new norm of bigger, cleaner and real GDP;
• Committed to double farm income in 5 yrs;
• Plan, non-plan classification of expenditure done away with in the Budget for 2017-18 to give a holistic picture;
• Mini labs by qualified local entrepreneurs to be set up for soil testing in all 648 krishi vigyan kendras in the country;
• Budget presentation advanced to help begin implementation of schemes before onset of monsoon;
• Spend more in rural areas, infra, poverty alleviation, while maintaining fiscal prudence as guiding principle of Budget;
• World Bank expects GDP growth rate at 7.6 % in FY18 and 7.8 % in FY19;
• Allocation under MNREGA increased to 48,000 crore from Rs 38,500 crore. This is highest ever allocation;
• Rs 9,000 cr higher allocation for payment of sugarcane arrears;
• Target of agriculture credit fixed at Rs 10 lakh cr in 2017-18;
• Tax administration honouring the honest is one of the 10 pillars of Budget 2017-18;
• National Testing agency to conduct all examinations in higher education, freeing CBSE and other agencies;
• 133-km road per day constructred under Pradhan Mantri Gram Sadak Yojana as against 73-km in 2011-14;
• Govt to set up dairy processing fund of Rs 8,000 crore over three years with initial corpus of Rs 2,000 crore;
• 1 cr households to be brought out of poverty under Antodya Scheme;
• Participation of women in MNREGA increased to 55 % from 45 % in past;
• Modern law on contract farming will be drafted and circulated to states;
• Dedicated micro-irrigation fund to be created with a corpus of Rs 5000 crore;
• Market reforms will be undertaken, states will be asked to denotify perishables from Essential Commodities Act;
• Space technology to be used for monitoring MNREGA implementation;
• Sanitation coverage in villages has increased from 42 % in Oct 2016 to 60 %, a rise of 18 %, says FM;
• We propose to provide safe drinking water to 28,000 arsenic and fluoride affected habitations;
• To construct one crore houses by 2019 for homeless. PM Awas Yojana allocation raised from Rs 15,000 cr to Rs 23,000 cr;
• 100 % electrification of villages to be completed by May 2018;
• 27,000 cr on to be spend on PMGSY; 1 cr houses to be completed by 2017-18 for houseless;
• PM Kaushal Kendras will be extended to 600 districts; 100 international skill centres to be opened to help people get jobs abroad;
• The allocation for rural agri and allied sector in 2017-18 is record Rs 1,81,223 crore;
• In higher education, we will undertake reforms in UGC, give autonomy to colleges and institutions;
• A system of annual learning outcome in schools to be introduced; innovation fund for secondary education to be set up;
• Two new AIIMS to be set up Jharkhand and Gujarat;
• New rules regarding medical devices will be devised to reduce their cost;
• 1.5 lakh health sub centres to be converted to Health Wellness Centres;
• National Housing Bank will refinance indiviual loans worth Rs 20,000 crore in 2017-18;
• Rs 500 cr allocated to set up Mahila Shakti Kendras; Allocation raised from Rs 1.56 lakh cr to Rs 1.84 lakh cr for women & child welfare;
• Capital and development expenditure pegged at Rs 1.31 lakh cr for railways in 2017-18 from Budget;
• Allocation for SCs increased from Rs 38,833 cr to Rs 52,393 cr, a rise of 35 per cent
• 35 % increase in allocation for SC to Rs 52,393 cr;
• For senior citizens, Aadhaar based health cards will be issued;
• Model Shops and Establishment Bill to open up additional opportunities for employment of women;
• Select airports in tier-II cities to be taken up for operations, development on PPP mode
• New metro rail policy to be unveiled;
• Railway tariffs to be fixed on the basis of cost, social obligation and competition;
• Service charge on e-tickets booked through IRCTC will be withdrawn;
• Delhi and Jaipur to have solid waste management plants and five more to be set up later;
• Government proposes Coach Mitra facility to redress grievances related to rail coaches;
• 500 stations will be differently abled by providing lifts and escalators;
• Unmanned railway level crossings to be eliminated by 2020;
• Railway line of 3,500 km will be commissioned in 2017-18 as against 2,800 km in 2016-17;
• Total allocation for rural, agri and allied sectors for 2017-18 is a record Rs 1,87,223 cr, up 24 per cent from last year;
• Rs 1 lakh cr corpus for railway safety fund over five years;
• A scheme for senior citizens to ensure 8 per cent guaranteed returns;
• Dedicated micro-irrigation fund to be set up by NABARD to achieve mission of Per Drop, More Crop;
• Digi Gaon will be launched to promote tele-medicine and education;
• Crude oil strategic reserves to be set up in Odisha and Rajasthan apart from 3 already constructed;
• Coverage of Fasal Bima Yojana to go up from 30 % of cropped area to 40 % in 2017-18 and 50 per cent next year;
• For transport sector, including railways, road and shipping, government provides Rs 2.41 lakh crore;
• Allocation of Rs 10,000 cr for Bharat Net project for providing high-speed broadband in FY18;
• Allocation for national highways stepped up to Rs 64,000 cr from Rs 57,676 cr;
• Budget allocation for highways stepped up to Rs 64,000 crore in FY18 from Rs 57,676 crore;
• Dispute resolution in infrastructure projects in PPP mode will be institutionalised;
• Rs 2,74,114 crore allocated for defence expenditure, excluding pension; This includes Rs 86,000 crore for defence capital;
• Govt to further liberalise FDI policy;
• Over 90 per cent of FDI proposls are now processed through automatic route;
• FIPB will be abolished;
• Trade Infrastructure Export Scheme to be launched in 2017-18; total allocation for infra at record Rs 3.96 lakh cr;
• Second phase of solar power development to be taken up with an aim of generating 20,000 MW;
• After demonetisation on Nov 8 last year, deposit of between Rs 2 lakh and Rs 80 lakh made in 1.09 cr bank accounts at an average of Rs 5.03 lakh till Dec 30;
• More funds beyond Rs 10,000 cr for recapitalisation of banks will be provided if needed;
• The shares of railway CPSCs like IRCTC and IRFC to be listed on various stock exchanges;
• We are largely a tax non-compliant society;
• New ETF with diverse stocks will be launched in 2017-18;
• Of 76 lakh individuals who reported income of over Rs 5 lakh, 56 lakh are salaried;
• Integrated public sector oil major to be created to match global giants;
• Govt will amend the Multi-state Cooperative Act to protect the poor and gullible investors;
• Urgent need to protect poor from chit fund schemes, draft bill placed in public domain;
• Computer emergency response team to be set for cyber security of financial sector;
• Govt to introduce two new schemes to promote BHIM App - referal bonus for users and cash back for traders;
• Govt doubles distribution target under Mudra Yojana to Rs 2.44 lakh crore for 2017-18;
• Over Rs 80 lakh deposits in 1.48 lakh cr at an average of Rs 3.31 cr per account;
• Customs duty on LNG halved to 2.5 %;
• FPI to be exempt from indirect transfer provisions;
• Political parties can receive donations in cheque, electronic mode; electoral bonds to be issued by RBI;
• Maximum amount of cash donation a political party can receive will be Rs 2000 from any one source as part of effort to clean political funding;
• Capital expenditure stepped up by 25.4 % in FY18 over previous year;
• Total expenditure in FY18 at Rs 21.47 lakh cr;
• Duty exempted on various POS machines and iris readers to encourage digital payments;
• Rs 7,200 cr revenue loss due to reduction in tax on smaller companies;
• Govt mulling introduction of legal changes to confiscate assets of offenders, including economic offenders, who flee the country;
• Govt to set up a web-based interactive platform for defence pensioners;
• Head post offices to issue passports;
• Govt considering option to amend Negotiable Instruments Act to ensure that holders of dishonoured cheques get payment;
• FRBM review committee has recommended 60 % debt to GDP ratio; 0.5 % of GDP deviation from stipulated fiscal deficit targets;
• Payment regulatory board to be set up in RBI to regulate electronic payments, replacing Board for Regulation and Supervision in Payments and Settlements System;
• 3 yr period for long-term capital gains tax on immovable property reduced to 2 years; base year indexation shifted from 1.4.1981 to 1.4.2001;
• A proposal to receive all government receipts beyond a certain threshold through e-modes under consideration;
• GST implementation to bring more taxes to Centre and states;
• No transaction above Rs 3 lakh in cash will be allowed as suggested by SIT;
• Customs duty on LNG to be reduced from 5 % to 2.5 %;
• To make MSME companies more viable, govt proposes to reduce IT tax with annual turn over of Rs 50 core up to 25 per cent;
• I-T for smaller cos with turnover of upto Rs 50 cr up to 25 per cent
• Not possible to remove MAT levied on advance tax for now; carry forward allowed for 15 yrs instead of 10 yrs
• Relaxation in norms for Start Ups for getting tax exemption;
• Capital gains tax exempted for the land pooled to build new capital of Andhra Pradesh effective from 2.6.2014;
• Increase in personal tax collections is 34.8 per cent in last three quarters. Demonetisation has played a role;
• 17 % growth in direct tax revenue for the second year in a row in 2016-17;
• As against 4.2 crore people working in organised sector, only 1.74 crore individuals filed income tax returns;
• Solar tempered glass used for manufacture of solar cells/panels exempted from customs duty;
• Import duty on aluminium ores and concentrates raised to 30 % from nil presently;
• Actual revenue loss on tax proposals Rs 22,700 cr; gain from additional resource mobilisation is Rs 2,700 cr;
• Net revenue loss from direct tax proposals to be about Rs 20,000 cr;
• Excise duty on pan masala containing tobacco (Gutkha) raised to 12 % from 10 %;
• Excise duty on non-filter cigarettes of length not exceeding 65 mm raised to Rs 311 per thousand from Rs 215 per thousand;
  
  
  *****