Budget 2012 proposals, Changes and effects – An analysis

Budget 2012 proposals, Changes and effects – An analysis Posted: 07 May 2012 06:17 PM PDT In the budget 2012, our Finance Minister Mr Pranab Mukherjee announced a series of proposals which intended to check tax evasion, improve tax compliance and tax collection. The most important among these proposals are: GAAR, TDS on immovable property purchases, Excise duty on gold jewellery etc.... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] Exemption to LTCG on sale of unlisted securities in IPO + STT 0.2% on Such Sales Posted: 07 May 2012 06:10 PM PDT To promote further depth of the capital markets through listing of companies, I propose to extend the benefit of tax exemption on long term capital gains to the sale of unlisted securities in an initial public offer. For this purpose, I propose to provide the levy of Securities Transaction Tax... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] Budget 2012 – Clarificatory amendments do not override provisions of DTAA Posted: 07 May 2012 06:06 PM PDT I would like to confirm that clarificatory amendments do not override the provisions of Double Taxation Avoidance Agreement (DTAA) which India has with 82 countries. It would impact those cases where the transaction has been routed through low tax or no tax countries with whom India does not have a... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] GAAR – Advance Ruling Applies, Onus on Department, Change in Constitution, Applicable from AY 2013-14 Posted: 07 May 2012 05:59 PM PDT (i) Remove the onus of proof entirely from the taxpayer to the Revenue Department before any action can be initiated under GAAR. (ii) Introduce an independent member in the GAAR approving panel to ensure objectivity and transparency. One member of the panel now would be an officer of the level of... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] Government withdraws Excise Duty on all precious metal jewellery, branded or unbranded Posted: 07 May 2012 05:55 PM PDT Imposition of Central Excise duty on unbranded precious metal jewellery at the rate of 1% - Government has decided to withdraw the levy on all precious metal jewellery, branded or unbranded, with effect from 17th March, 2012. [[ This is a content summary only. Visit my website for full links, other content, and more! ]] Retrospective amendment to Sec. 9 not applicable where assessment order already passed Posted: 07 May 2012 05:52 PM PDT The retrospective clarificatory amendments now under consideration of Parliament will not be used to reopen any cases where assessment orders have already been finalized. I have asked the Central Board of Direct taxes to issue a policy circular to clearly state this position after the passage of... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] NoTCS on Cash purchase of Jewellery upto Rs. 5 lakhs Posted: 07 May 2012 05:49 PM PDT To curb the flow of unaccounted money in the bullion & jewellery trade, the Finance Bill proposes the collection of tax at source (TCS) by the seller at the rate of 1 per cent of the sale amount from the buyer for all cash transactions exceeding Rs.2 lakh. Responding to the representations... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] Exemption from service tax for specified service in the negative list extends to Agricultural produce Posted: 07 May 2012 05:45 PM PDT Exemption for specified services relating to agriculture in the Negative List has also been extended to agricultural produce enlarging the scope of the entry. [[ This is a content summary only. Visit my website for full links, other content, and more! ]] Work Contracts definition enlarged to include movable properties Posted: 07 May 2012 05:43 PM PDT The negative list has been drawn keeping in view the federal nature of the polity. Some of the States, through the Empowered Committee of State Finance Ministers, have expressed their concerns. I have decided to address their concerns by making changes in the definition of "service" which will... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] Withdrawal of TDS on purchase of Immovable Property Posted: 07 May 2012 05:41 PM PDT The Finance Bill proposes that every transferee of immovable property (other than agricultural land), at the time of making payment for transfer of the property, shall deduct tax at the rate of 1% of such sum. I have received a number of representations pointing out the additional compliance burden... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] LTCG from sale of unlisted securities in case of NR / Private Equity Investors, to be taxed at 10% Posted: 07 May 2012 05:36 PM PDT Currently, long term capital gain arising from sale of unlisted securities in the case of Foreign Institutional Investors is taxed at the rate of 10% while other non-resident investors, including Private Equity investors are taxed at the rate of 20%. In order to give parity to such investors, I... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] Lower rate of withholding tax of 5% on fund augmented from foreign borrowings extends to all businesses Posted: 07 May 2012 05:33 PM PDT In order to augment long-term low cost funds from abroad for the infrastructure sector, Finance Bill proposes a lower rate of withholding tax of 5% for funding specific sectors through foreign borrowings. To further facilitate access to such borrowings, I propose to extend the lower rate of... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] FM Budget speech dated 7-5-2012 on Finance Bill, 2012 Posted: 07 May 2012 05:30 PM PDT I presented the Budget for the year 2012-13 on 16th of March, 2012. Since then I have received a large number of suggestions both from within the House and outside. Most of these pertain to tax proposals and range from seeking modification of some proposals to reconsideration or review of certain...