TDS on Property sales withdrawn, TDS on Jewellery limit increased to 5 lacs

 

TDS on Property sales withdrawn, TDS on Jewellery limit increased to 5 laksh

 

 

In opening speech of on discussion of Finance Bill 2012(budget 2012) ,Finance Minister has announced major changes to the proposed Finance Bill 2012. The List of Main changes is given as under.

check Complete Text of Finance Minister Speech on 07/05/2012

1. The implementation of General Anti-Avoidance Rules has been deferred by a year to April 2013 onwards.
2. Clarificatory amendments will not override DTAAs, or double taxation avoidance agreement, that India has with other countries.
3. Retrospective clarification will impact cases where the transaction has been routed through low tax or no tax countries with whom India doesn't have a DTAA.
4. The retrospective clarificatory amendments will also not be used to reopen any cases where assessment orders have been finalised. Mr. Pranab Mukherjee has asked the Central Board of Direct Taxes to issue a policy circular to clearly state this position after the passage of the Finance Bill.
5. Investors will no longer have to prove the status of their compliance with tax laws. Instead, the onus on proving non-compliance will rest with tax authorities.
6. The tax rate for private equity funds is proposed to be reduced from 20 per cent to 10 per cent.
7. Long Term Capital Gains tax for PE funds will be along the same lines as applicable to foreign institutional investors (FIIs).
8. A Securities Transaction Tax at the rate of 0.2 per cent will be levied on the sale of unlisted securities. The Finance Minister proposed extending tax exemption on Long Term Capital Gains tax to the sale of unlisted securities in an initial public offer (IPO).
9. Mr. Pranab Mukherjee also proposed to provide an exemption to angel investors under a notified class of investors.
10. Government has decided to withdraw the levy on all precious metal jewellery, branded or unbranded, with effect from 17th March, 2012.
11. All businesses that are being funded through foreign borrowings will pay a lower withholding tax rate of 5 per cent.
12. A lower rate of withholding tax will now also apply to funds raised through long term infra bonds and borrowings under a loan agreement.
13. The Reserve Bank of India is finalising a scheme that will allow subsidiarisation of Indian branches of foreign banks. "I propose to provide tax neutrality to be provided for such subsidiarisation," Mr. Pranab Mukherjee said.
14. The Finance Bill also proposes to withdraw a levy of one per cent tax deducted at source (TDS) on transfer of immovable property
15. Mr. Mukherjee said he is proposing to raise threshold limit for TCS on cash purchases of jewellery to Rs 5 lakh from the current Rs 2 lakh.