The Finance Bill which was presented in the Lok Sabha on 28^th February, 2015 has been passed by the Lok Sabha on 30^th April, 2015. The bill has been passed with some modification which was presented earlier. New amendments are proposed and also some proposed amendments are removed.

Let’s take a view of the amendments finalised with modification in the Finance Bill:  

1. MAT Exemption:

Presented: Long-term capital gains and short-term capital gains (on which STT is paid) arising to FIIs would be excluded from the chargeability of MAT. Expenditures, if any, debited to the profit and loss account, corresponding to such income shall be added back to the book profit for the purpose of computation of MAT.

The proposal implied that foreign companies would be liable to pay MAT even on that income which was exempt from tax by virtue of DTAAs or Income-tax Act.

Passed: MAT shall not be applicable to Foreign Companies also. Capital gains from transfer of securities, interest, royalty and FTS accruing or arising to foreign company shall be excluded from chargeability of MAT. Expenditures, if any, debited to the profit and loss account, corresponding to such income shall be added back to the book profit for the purpose of computation of MAT.

2. Section 80D: For Individual

Presented: Omitted to propose amendment to clause (a) and clause (b) of sub-section (2) of Section 80D to enable assessee to claim deduction of Rs. 25,000 instead of Rs. 15,000. However, sub-section (4) of Section 80D was amended to allow deduction of Rs. 30,000 instead of Rs. 25,000 if individual or his family member or any of his parents is a senior citizen or very senior citizen.

 

Passed: Deduction in respect of Health Insurance if none of the family member or parents is senior citizen or very senior citizen shall be Rs. 25,000 including Preventive health check-up of Rs. 5,000.

In other cases, maximum deduction shall be Rs. 30,000 including Preventive health check-up of Rs. 5,000.

Contribution to CGHS shall be Rs. 25,000 for Individual and his family.

 

3. Additional Depreciation for industries in Bihar and West Bengal

Presented: Allow higher additional depreciation at the rate of 35% (instead of 20%) in respect of the actual cost of new machinery or plant acquired and installed by a manufacturing undertaking or enterprise set-up in the notified backward area of the State of Andhra Pradesh and the State of Telangana.

Passed: Benefit of additional depreciation and investment allowance to the manufacturing undertaking in the notified backward area of State of Bihar and State of West Bengal as well.

 

4. Period of holding and cost of acquisition in case of shares acquired on redemption of GDRs

Presented: Period of holding for shares acquired on redemption of GDRs shall be reckoned from the date on which a request for redemption is made by the assessee.

In addition, the cost of acquisition shall be computed in accordance with sub-section (2ABB) proposed to be inserted in Section 49 by the Finance Bill, 2015 as passed by the Lok Sabha.

Passed: The price of such shares as prevailing on any recognized stock exchange on the date on which a request for redemption is made by the assessee.

 

Few major amendments in the Budget 2015:

• Clean Energy Cess on coal increased from Rs. 100 to Rs. 200
• The corporate tax reduced over the period of next four years from 30 per cent to 25 per cent
• Wealth tax has been abolished
• Two per cent additional surcharge on the super rich
• Sukanya Samridhi Yojana will be exempted under Section 80C
• Transport Allowance has been doubled from Rs. 800 to Rs. 1600
• Mandatory filing of return by a person, being a resident other than not ordinarily resident in India, who at any time during the previous year:

(a) holds, as a beneficial owner or otherwise, any asset (including financial interest in any entity) located outside India or has signing authority in any account located

outside India; or

(b) is a beneficiary of any asset (including any financial interest in any entity) located outside India.

However, filing of return shall not be mandatory under this proviso for an individual, being a beneficiary of any asset (including any financial interest in any entity) located outside India, if income arising from such an asset is includible in the income of the person who is beneficial owner of such an asset.

• Any subsidy which is not reduced from the actual cost of the asset in view of provisions of Explanation 10 to Section 43(1) shall be taxable as revenue receipts of the assessee.
• Bad-debts could be claimed without writing off in books of account. This shall be allowed if the amount of debt or part thereof has been taken into account in computing the income of the assessee of the previous year in which the amount of such debt or part thereof becomes irrecoverable
• Custom Duties reduced and rationalised for 14 items.

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