der indische haushalt - 2014

DER INDISCHE HAUSHALT - 2014
India Law Offices
UNION BUDGET 2014 (INDIEN) : HIGHLIGHTS
Sehr geehrte Leser und Leserin,
Folgendes sind die Key Highlights from the Budget 2014:
am 10.Juli.2014 hat Herr Arun Jaitley, der indische
Finanzminister sein erstes Haushalts offengelegt. Er hat
gesagt, dass dieses Budget stark auf das Wachstum
fokusiert ist. Es hat das seit langem geplante
Gesamtverbraucherssteuer eingeführt und stellt eine
Strategie dar, um die Wirtschaftsleistung 7% bis 8% in
kommenden Jahren zu bringen und stabilisieren.
Verteidigungsindustrie
Ein andere Mitteilung ist die Öffnung des Versicherungsund Rüstungsmarkts für ausländische Investoren und die
Erhöhung der Beteiligungsgrenze von 26% auf 49 %. Das
Budget liefert die wichtige Hinweise zum Thema Steuerund Zollregelung für ausländische Investoren und
erleichert den Weg zum indischen Markt.
Für das Jahr 2014 gilt das Ziel, die Wirtschaftsleistung zu
waschen und das indische Haushaltdefizit von 4,5 % zu
4.1 % sinken und endlich bei 3% im Jahr 2016/2017
anzustreben.
Union Budget 2014
Die Beteiligungsgrenze für ausländische Investoren hat sich
von 26 % auf 49% erhöht mit einem indischem
Management und die Zustimmung von FIPB (Foreign
Investment Promotion Board).
Immobilien und Infrastruktur
FDI Richtlinie Anforderungen an bebauten Gebiet und
Mindestkapital Normen von 50.000 Quadratmetern auf
20.000 Quadratmeter und von USD 10 Millionen auf USD 5
Millionen bzw. reduziert werden. Der Zustand der
Mindestbindungsfrist von drei Jahr beibehalten.
Projekte mit mindestens 30% der Gesamtkosten des Projekts
für “Low-Cost (kostengüntiger) Wohnbau”
und
Mindestkapitalpflicht befreit zu sein, aber die 3 Jahre
Sperrfrist gilt.
UNION BUDGET 2014 (INDIEN) : HIGHLIGHTS
Versicherung
Bruttoeinkommen (INR)
Die Versicherungsbereich wird für ausländische
Unternehmen geöffnet und die Beteiligungsgrenze
steigt von 26 % auf 49 % mit einem inlanlischen
Management und die Zustimmung von FIB (Forgein
Investment Promotion Board)
Herstellung
Die Hersteller sind erlaubt, ihre Produkte im
Einzelhandel oder im Internet (E-Commerce Website)
ohne jegliche zusätzliche Zulassung zu verkaufen.
Direkt Steuerung
Körperschaftsteuer:
diesem Steuersatz.
Union Budget 2014
Es
gibt
keine
Aenderung
in
Inländische
Unternehmen
Ausländische
Unternehmen
Steuersatz
Einkommen < 10 million
30.90%
Einkommen > 10 million, but <100 million
32.45%
Einkommen > 100 million
33.99%
Einkommen < 10 million
41.20%
Einkommen > 10 million, but <100 million
42.02%
Einkommen > 100 million
43.26%
Einkommenssteuer
Das Haushalt beabsichtigt, dass die Steuerfreibetrag für
individuellen d.h. HUF, AOP, BOI und sonstige justizielle
Firmen von INR 200.000 auf INR 250.000 erhöht wird.
Höchste Abzug absetzbar für Zinsen an Kredit für
selbstgenutzte Immobilien steigt von INR 150.000 auf 200.000
und die Steuerersparnisse Geldanlage von INR 100.000 auf
INR 150.000 bzw.
UNION BUDGET 2014 (INDIEN) : HIGHLIGHTS
Dividende
Von einem indischen Unternehmen aus einem
festgelegten
ausländische
Gesellschaft
(Aktienbeteiligung von 26 Prozent oder mehr)
Dividenden steuerpflichtig zu Vorzugssatz von 15
Prozent für alle künftigen Beurteilung Jahre ohne eine
Beendigung.
Capital Gain
Ungelistete
Wertpapiere
und
Mutual
Fonds
(ausschließlich Euitey Oriented Fonds) wird als
langfristige Kapitalanlage bewertet, wenn es mehr als
36 Monten dauert.
Wertpapiere festgehalten von FII ( Foreign Institutional
Investor) im Rahmen von SEBI Regulierung wird als
Anlagegüter
bewertet und steuerpflichtig unter
Kapital Gain.
Union Budget 2014
Veräußerungsgewinne aus dem Verkauf von Anteilen an
Investmentfonds (einschließlich Units der Equity Oriented
Funds) werden nicht mehr den 10 % Vorzugssteuersatz
erhalten. Das wäre jetzt steuerpflichtig in Höhe von 20%.
Steueranreize
Anreize für Herstellung
Ein Unternehmen, das in der Herstellung von Artikeln und
Dinge ist, erworben engagiert und installiert eine neue
Anlage und Maschinen über 250 Mio. EUR, wäre berechtigt,
eine Investitionszulage in Höhe von 15% der Kosten für eine
solche neue Anlagen und Maschinen zu verlangen. Dieser
Abzug wäre für solche Investitionen bis 31. März 2017 gültig.
Anreize für Stormindustrie (Energie)
Ablauftermin für die Berechtigung zur Steuerbefreiung für
die Stromerzeugung, Verteilung oder Übertragung ist zum
31. März 2017 verlängert zu behaupten.
UNION BUDGET 2014 (INDIEN) : HIGHLIGHTS
Anreize anhand eines Investition
Die Investitionen auf steuerliche Anreize (in Bezug auf
die qualifizierten Investitionen) erweitert "Verlegung
und den Betrieb einer Schlammpipeline für den
Transport von Eisenerz" und "Aufbau und Betrieb eines
Halbleiterwaferherstellung Produktionseinheit.
Transferpreis
Roll back’ Mechanism for APA: Das Budget hat
vorgeschlagen, die 'Roll back' Bestimmung in der
vorliegenden APA Schema vorzustellen. Gemäß dem
Vorschlag, Methodik zur Bestimmung ALP einer
internationalen Transaktion unter einer APA konnte für
Zeitraum zu vier Jahren vor dem ersten Jahr unter
dem APA abgedeckt werden. Allerdings würden
Nutzen solcher 'Roll back' wird unter bestimmten
Bedingungen verfügbar, die noch verschreiben
werden. Die Änderung ist ab 1. Oktober 2014 wirksam
Union Budget 2014
Indirekte Steuerung:
Zollgebühr:
Mineralöle (einschließlich Erdöl und Erdgas) extrahiert
oder in dem Festlandsockel von Indien oder der
ausschließlichen Wirtschaftszone von Indien hergestellt
und vor der 7. Tag des Monats Februar 2002 importiert,
wurden aus dem gesamten Zölle rückwirkend befreit.
Es wird jedoch keine Erstattung von Zöllen bereits in
Bezug auf solche Mineralöle bezahlt gewährt werden.
Befreiung von BCD auf bestimmten Rohstoff wie
Fettsäure, Crude Palm Stearin, RBD, andere Palm
Stearin. Industriequalität Rohöle, Polytetrametylene
Etherglycols.
Befreiung von BCD erlaubt, LCD / LED-Panel (unter 19
Zoll), Farbe Fernsehbildröhre bei der Herstellung von
Kathodenstrahlfernseher verwendet, bestimmte Teile
LCD / LED-Panels.
UNION BUDGET 2014 (INDIEN) : HIGHLIGHTS
Dienstleistungssteuer
Verbrauchssteuer
Aktivität
der
Verpackung,
Umpacken,
Kennzeichnung usw. für bestimmte Produkte wie
Impfstoffe,
Zahnpulver,
Standardsoftware,
Klimaanlagen, Batterien, Chipkarten etc., um ein
als "Herstellen" betrachtet werden.
Nutzen
von
Advance
Ruling
wird
gebietsansässigen
Gesellschaften
beschränkter Haftung erweitert.
zu
mit
Die erforderlichen Maschinen / Komponenten,
die wichtige für die
Ersteinrichtung der
Druckbiogasanlage
sind
auch
Verbrauchsteuerbefreiung erhalten.
Solar Zelle: Die Maschinen oder Teile , die für die
Herstellung des Solar galvanische Zelle und den
Aufbau von Solarenergieproduktion wichtig sind,
werden auch steuerlich freigestellt.
Union Budget 2014
Die folgenden Dienstleistungen sind neu in der
steuerpflichtigen Einkünfte hinzugefügt:
Dienstleistungen in Bezug auf den Verkauf von Raum
oder Zeit für Anzeigen in Broadcast-Medien nämlich
Radio und Fernsehen wird jetzt auf andere Segmente
wie Online-und Mobile-Werbung erweitert und wird
jetzt steuerpflichtig.
Technische Erprobung oder Analysen von neu
entwickelten Medikamenten einschließlich Impfstoffen
und pflanzliche Heilmittel auf die menschliche
Teilnehmer ist auch als
steuerpflichtige Einkünfte
gelistet.
Dies
wird
vom
einem
klinischen
Forschungsorganisation genehmigt klinische Studien,
die von dem Controller General of India Drug eine
Zustimmung erhalten haben.
UNION BUDGET 2014 (INDIEN) : HIGHLIGHTS
Die folgende Dienstleistung wird als neu steuerfrei gelistet:
Zur sicheren Entsorgung von medizinischen und klinischen Abfällen, Dienstleistungen durch
gemeinsame bio medizinische Abfallbehandlungsanlagen freigestellt.
Service Steuerbefreiung von Bildungseinrichtungen empfangenen Leistungen nur auf
bestimmte Dienste beschränkt, im Gegensatz zu allen Hilfsbildungsdienstleistungen.
Der Haushalt beinhaltet auch strukturelle Reformen und auch teilweise Steuerentlastung für
Steuerzahler, um Sparanlagen in Staatsanleihen anzukurbeln.
Sollten Sie mehr Information zu diesem Thema benötigen, steht unser Team Ihnen gern zur Verfügung.
Mit freundlichen Grüßen,
Gautam Khurana
Grunder und geschäftsführender Gesellschafter.
India Law Office – Ihr Partner für gesetzliche Aufgaben jegelicher Art
Kontakt : [email protected]
Union Budget 2014
INDEX
1
Introduction
2
Economic Performance
3
Key Policy Announcement
4
Direct Taxation
5
Indirect Taxation
6
Tax Card
7
Tax Calendar
Union Budget 2014
BUDGET 2014
Information in this publication is intended to provide only a general outline of the subjects covered. It
should neither be regarded as comprehensive nor sufficient for making decisions, nor should it be used in
place of professional advice. India Law Offices (ILO) accepts no responsibility for loss arising from any
action taken or not taken by anyone using this publication.
Union Budget 2014
INTRODUCTION
The new government presented its first union budget for 201415 in the parliament on 10th July’ 2014.
The economic survey highlight that the Indian economy is likely
to grow in the range of 5.4 to 5.9 per cent in 2014-15
overcoming the lower than 5 per cent GDP growth in last two
consecutive years i.e., 2012-13 and 2013-14.
The steps
announced in the budget are the beginning towards a
sustained growth of 7 to 8 per cent with macro-economic
stabilization.
Increase in the basic tax exemption limit in case of individuals is
expected to increase disposable incomes and thereby provide
some relief against inflation.
The Finance Minister has announced that the sovereign right of
the government to undertake retrospective legislation has to
be exercised with extreme caution and will not ordinarily bring
about any change retrospectively which creates a fresh
liability.
The government has proposed that all fresh cases arising from
retrospective amendments of 2012 in respect of indirect
transfer taxation will be scrutinized by a high level committee.
Union Budget 2014
Unfortunately, the budget does not contain any proposal that
would provide relief to taxpayers who are already in litigation on
this matter.
The Finance Minister has extended the scope of advance rulings
to cover residents, enlarging the scope of Income-tax
Settlement Commission and enabling roll back of Advance Price
Agreements (APAs).
The budget has announced some significant proposals for the
real estate and infrastructure sector such as grant of tax status to
Real Estate Investment Trusts (REIT) and Infrastructure Investment
Trusts (InvIT), Public – Private Partnerships (PPPs), development of
industrial and economic corridors, smart cities linked to transport
connectivity, new airports in tier-1 and tier-2 cities, research
centres etc.
The Finance Minister has strongly re-affirmed the commitment to
introduce Goods & Service Tax (GST), however no date of
implementation has been announced.
The increase in FDI limit from 26 to 49 per cent into Insurance &
Defence and reducing the mandatory requirements of built up area
and capital conditions in the development of smart cities are much
awaited steps.
ECONOMIC PERFORMANCE
Data Category
Units
2012-13
2013-14
GDP (factor cost 2004-05 prices)
INR
54,821.11 billion (first revised
estimates)
57,417.91 billion (provisional
estimates)
Growth rate
%
4.5
4.7
Savings rate
%GDP
31.8 (Planning Commission)
30.5 (Planning Commission)
Investment rate
%GDP
34.7 (Planning Commission)
31.4 (Planning Commission)
Index of Industrial Production (growth)
(The IIP has been revised since 2005-06
on base (2004-05=100))
%
1.1
0.1
Average WPI inflation
% Change
7.4
6
Inflation (CPI – IW) (average)
% Change
10.4
9.7
Export growth (USD)
% Change
-1.8
4.1
Import growth (USD)
% Change
0.3
-8.3
Current account balance / GDP
%
-4.7
-1.7
Gross fiscal deficit (as % of GDP)
%
4.9
4.5
Union Budget 2014
KEY POLICY ANNOUCEMENT
Defence
The composite cap on foreign investment in Defence
manufacturing to be raised from 26 per cent to 49 per
cent with Indian management and control subject to an
approval from FIPB.
Real Estate and Infrastructure
FDI policy requirements regarding built up area and
minimum capital norms to be reduced from 50,000 square
meters to 20,000 square meters and from USD 10 million to
USD 5 million respectively. The condition of minimum lock-in
period of three year has been retained.
Scheme for the development of new Airports in Tier-I & Tier-II
cities
Development of sixteen new port projects, policy for
encouraging
Indian-controlled
tonnage
and
a
comprehensive policy to promote the Indian shipbuilding
industry are being considered.
Insurance
The composite cap in the Insurance sector is to be
increased to 49% from 26% for companies with Indian
management and control through FIPB route.
Manufacturing and Industries
Projects with minimum 30% of its total project cost for lowcost affordable housing to be exempt from built-up area
and minimum capital requirement, however, the three
year lock-in period shall apply.
The manufacturing unit would be allowed to sell its products
through retail including through e-commerce platforms
without any additional approval.
15000 km of gas pipelines to be developed using the PPP
mode.
The Government is to strengthen research centres in areas
such as nanotechnology, materials science and biomedical
devices technology through PPPs.
Union Budget 2014
DIRECT TAXATION
Corporate Tax Rates
Personal Income Tax
Rates of corporate tax remain unchanged for both
domestic and foreign companies.
Total Income (INR)
Domestic
Company
Foreign
Company
Union Budget 2014
Tax Rates
Income < 10 million
30.90%
Income > 10 million, but
<100 million
32.45%
Income > 100 million
The budget proposes to increase the minimum exemption
limit in the case of Individuals, HUF, AOP, BOI, and artificial
judicial person from INR 200,000 to INR 250,000.
The applicable surcharge and cess remains unchanged.
The tax slab rates applicable are as follows:
Total Income (INR)
Tax Rate
33.99%
0 – 250,000*
Nil
Income < 10 million
41.20%
250,001 – 500,000
10%
Income > 10 million, but
<100 million
42.02%
500,001 – 1,000,000
20%
Income > 100 million
43.26%
1,000,000 and above
30%
*INR 300,000 for individual residents aged sixty years and INR 500,000
for individual residents aged eighty years and above
Maximum deduction allowable for interest on loan for selfoccupied property increased from INR 150,000 to INR
200,000 and towards prescribed tax saving investments
increased from INR 100,000 to INR 150,000.
DIRECT TAXATION
Dividend
Capital Gain
Dividends received by an Indian company from any
specified foreign company (equity shareholding of 26 per
cent or more) is taxable at concessional rate of 15 per
cent for all future assessment years without any sunset
clause.
The dividend received by the domestic company would
require to grossed up for the purpose of computing DDT.
Particular
Amount
DDT
Amount allocated for distribution to
shareholders (Pre-DDT payment)
100
Total Dividend pay-out after DDT
(Pre-amendment)
85.47
14.526*
Total dividend pay-out (proposed
amendment)
83.00
16.995**
Difference
2.47
*16.995% on INR 85.47
**16.995% on INR. 100
Union Budget 2014
Unlisted securities and mutual funds (other than equity
oriented funds) to be treated as long term capital assets, if
held for a period more than 36 months (Earlier 12 months).
Securities held by FIIs in accordance with SEBI regulations to
be treated capital asset and taxable under capital gain.
Capital gains from sale of units of mutual funds, including
units of equity oriented funds eligible for concessional tax
rate of 10% would not be available. It would now be
taxable at the rate of 20%.
In relation to capital gains arising from transfer of an asset
by way of compulsory acquisition, it has been clarified that
the enhanced compensation will be taxed as capital gains
in the financial year in which the final order is made.
It is proposed that any transfer of government security
carrying periodic payment of interest, through an
intermediary from a non-resident to another non resident
shall not be taxable as capital gains.
DIRECT TAXATION
Tax Incentives
Incentive to manufacturing sector
A company is engaged in the manufacturing of any article
or things, acquired and installed a new plant & machinery
exceeds INR 250 million, would be eligible to claim an
Investment allowance of 15% of the cost of such new plant
& machinery. This deduction would be available for such
investments made till 31 March 2017.
Incentive to power sector
Sunset date for being eligible to claim tax holiday for
power generation, distribution or transmission extended to
31 March 2017.
Investment based incentive
The investment based tax incentive (in respect of the
eligible capital expenditure) extended ‘laying and
operating a slurry pipeline for the transportation of iron
ore’, and ‘setting up and operating a semiconductor
wafer fabrication manufacturing unit’.
Union Budget 2014
Transfer Pricing
International Transaction
The budget seeks to clarify that even a transaction entered
into by an assessee with a resident unrelated third party
would be deemed to be an International transaction, if the
same is pursuant to a prior arrangement between the third
party and Associated Enterprise.
‘Roll back’ Mechanism for APA
The Budget has proposed to introduce ‘Roll back’ provision
in the present APA scheme. As per the proposal,
methodology agreed for determining ALP of an
International transaction under an APA could be made
applicable to period of up to four years prior to the first year
covered under the APA. However, benefit of such ‘Roll
back’ would be available subject to certain conditions/rules
which are to be prescribed. The amendment is effective
from October 1, 2014.
DIRECT TAXATION
Transfer Pricing
Computation of arm’s length price
The Budget has proposed the concept of price range for
determination of ALP. However, the existing concept of
arithmetic mean would continue to apply where the
number of available comparable are inadequate.
Use of multi year data
As per the transfer pricing regulations, the use of single
year data for comparable analysis and multi year data
with some exception is available. The budget has
proposed to amend regulations to allow the use of multiple
year data for comparability analysis.
Taxation of real estate investment trusts and infrastructure
investment trust (business trusts) – w.e.f. 1 October’ 2014
The SEBI has proposed draft regulations relating to two
new categories of investment vehicles, namely:
REIT; and
Infrastructure Investment Trust.
Union Budget 2014
It is proposed to introduce a specific taxation regime for
business trusts and investors in such a business trusts in a
manner that there is no double taxation.
The key features to the regimes are as follows:
Dividend
SPV (company) distributing dividend to the business trust is
subject to DDT.
Dividend is exempt in the hands of the business trust.
Dividend component of the income distributed by the
business trust is treated as such in the hands of the unit
holder.
Interest
Interest from SPV is not taxable in the hands of the business
trust.
SPV is exempted from withholding tax on interest paid to the
business trust.
Interest distributed by business trust is taxable in the hands of
unit holders.
DIRECT TAXATION
Interest
Business Trust to withhold tax on distribution attributable to
the interest component - from Domestic unit holders @10%
and Non-resident unit holders @ 5%.
Capital gains
Capital gains on transfer of units held in trust:
Securities Transaction Tax applicable to transfer of
units of Business Trust.
Long term capital gains (LTCG) to be exempt from
tax
Short term capital gains taxable at 15% (plus
applicable surcharge and cess)
Capital gains on disposal of shares in SPV:
Taxable at normal capital gains (assuming shares in
SPV are held as capital asset by Business Trust)
Onward distribution of amount attributable to capital
gains is exempt in hands of unit holders
Union Budget 2014
Capital gains arising to Sponsor on exchange of shares in
Special Purpose Vehicle (SPV) with units of Business Trust:
Exchange of shares of SPV for units of a business trust is
not regarded as taxable transfer. Consequently,
taxability is deferred till the time of ultimate disposal of
the units by the sponsor.
At the time of ultimate disposal of the units of the
business trust, the sponsor shall not be entitled to avail
the concessional STT-based capital gains tax regime.
The acquisition cost of the units to the sponsor shall be
deemed to be the acquisition cost of the shares in the
SPV.
The holding period of the shares would also be
included in reckoning the holding period of the units.
DIRECT TAXATION
Withholding Tax
Reduced rate of withholding tax at 5 per cent would
apply on interest paid by an Indian company to nonresident taxpayers on monies borrowed by it in foreign
currency from a source outside India:
under a loan agreement or by way of issue of long
term infrastructure bond up to 30 June 2017 or
by way of issue of any long term bond between
1 October 2014 to 30 June 2017.
In case of non deduction or non payment of tax
deducted at source on payment to a residents, the
disallowance would restricted to 30% (Earlier 100%).
The payment to a non resident will be allowed as a
deduction if the tax deducted at source during the year is
deposited on or before the due date of filling of income
tax return.
Union Budget 2014
Other Changes
Sum of money received as advance or otherwise in the
course of negotiations for transfer of capital asset and such
some is forfeited or negotiations do not result in transfer of
such asset would be taxable as Income from Other Source.
Benefit of advance ruling extended to resident private
limited company.
INDIRECT TAXATION
Custom Duty
General rate of BCD remain unchanged i.e., 10 per cent.
Mineral oils (including petroleum and natural gas)
extracted or produced in the continental shelf of India or
exclusive economic zone of India and imported prior to
the 7th day of February, 2002 have been exempted from
the whole of customs duties with retrospective effect.
However, no refund of duties already paid in respect of
such mineral oils shall be granted.
Benefit of advance ruling extended to resident private
limited company.
In case of appeal, mandatory pre-deposit needs to be
made to the extent of 7.5 per cent of the amount involved
at first appeals level and 10 per cent at second stage level
subject to a cap of INR100 million.
Union Budget 2014
Exemption from BCD on specified raw material such as Fatty
Acid, Crude Palm stearin, RBD, other Palm Stearin. industrial
grade crude oils, Polytetrametylene Ether Glycol.
Exemption from BCD allowed to LCD/ LED panel (below 19
inches), colour television picture tube used in the
manufacture of cathode ray televisions, specified parts of
LCD/ LED panels.
Exemption from BCD allowed to flat copper wire for use in
the manufacture of PV ribbon (tinned copper interconnect)
for manufacture of SPV cells or modules.
Exemption from BCD allowed to e-book reader.
Exemption from SAD allowed to Inputs/components used in
manufacture of Personal Computers (laptops/desktops)
and tablet computers.
INDIRECT TAXATION
Increase in BCD on various type of coal and diamonds to
2.5 per cent.
Increase in export duty on bauxite increased from 10 per
cent to 20 per cent.
Excise Duty
General rate of Excise duty remain unchanged i.e., 12.36
per cent.
In case of appeal, mandatory pre-deposit needs to be
made to the extent of 7.5 per cent of the amount involved
at first appeals level and 10 per cent at second stage level
subject to a cap of INR100 million.
Activity of packing, re-packing, labelling etc. for specified
products such as vaccines, toothpowder, packaged
software, air conditioners, batteries, smart cards etc. to be
a considered as ‘manufacture’.
Union Budget 2014
In cases where excisable goods are sold at a price below
the manufacturing cost and profit and there is no additional
consideration flowing from the buyers to the assessee
directly or from a third person on behalf of the buyer, value
for the assessment of duty shall be deemed to be the
transaction value.
Benefit of advance ruling extended to include resident
private limited companies.
Exemption from Excise duty is allowed to machine /
components required for initial setting up of compressed bio
gas plant.
Machines/parts related to manufacture of solar voltaic cells
and setting up of solar energy production, projects have
been exempted.
Parts consumed within the factory of production for the
manufacture of goods to be used for generating solar/wind
energy have been exempted.
INDIRECT TAXATION
Increase in excise duty on cigarettes, Pan Masala,
Recorded smart cards etc.
The exemption has been withdrawn from the following
services:
Decrease in excise duty on products such as branded
petrol, footwear, LED etc.
Passenger transportation by air conditioned contract
carriage.
Technical testing or analysis of newly developed drugs
including vaccines and herbal remedies on human
participants by a clinical research organization
approved to conduct clinical trials by the Drug
Controller General of India.
Renting of immovable property to educational
institutions.
Service Tax
Rate of service Tax remain unchanged i.e., 12.36 per cent.
Following services to be removed from the negative list of
services i.e., now taxable (with effect from enactment of
Finance Bill):
Services in relation to Selling of Space or time for
Advertisements in broadcast media namely radio
and television is now extended to other segments like
online and mobile advertisement are now taxable.
Services provided by radio cabs or radio taxis
whether or not air conditioned, are now taxable.
Union Budget 2014
The exemption has been introduced in the following
services:
Services provided by Common Bio-medical Waste
Treatment Facility operators by way of treatment or
disposal of bio-medical waste or processes incidental
thereto, to a clinical establishment.
INDIRECT TAXATION
Services provided under all life micro-insurance
schemes approved by IRDA, where sum assured does
not exceed INR 50,000.
Services provided by way of transport of organic
manure by vessel, rail or road.
Services provided by way of loading, unloading,
packing, storage or warehousing, transport by vessel,
rail or road, of cotton, ginned or bale.
Services provided by Indian tour operators to foreign
tourists for a tour outside India.
Services received by RBI from outside India, in relation
to management of foreign exchange reserves.
Following are the changes in the existing services
exemptions:
Service tax exemption on services received by
educational institutes restricted only to specified
services as opposed to all auxiliary education
services.
Union Budget 2014
The scope of reverse charge mechanism has been
extended to cover:
services provided by directors to body corporate; and
services provided by recovery agents to banks,
financial institutions and NBFCs
The interest on delay in payment of services tax has been
revised to:
Particular
Others
Up to 6 months
18%
6 months to 1 year
24%
Above 1 year
30%
In work contract valuation, the service portion of the work
relating to movable and immovable is aligned to 70%.
The tax for transport of goods by vessels will be computed
on 40 per cent of the service value instead of 50 per cent of
the contract value.
TAX CARD
These rates are subject to enactment of the Finance Bill 2014. The Rates are for the Financial Year 2014-15.
1. Income Tax Rates
a) For Companies (includes Domestic and Foreign Companies)
Total Income (INR)
Tax Rates
Domestic Company
Income < 10 million
Income > 10 million, but <100 million
Income > 100 million
30.90%
32.45%
33.99%
Foreign Company
Income < 10 million
Income > 10 million, but <100 million
Income > 100 million
41.20%
42.02%
43.26%
a) For Firms (Including Limited Liability Partnerships), Local Authorities
Total Income (INR)
Tax Rates
Income < 10 million
Income > 10 million
30.90%
33.99%
Union Budget 2014
TAX CARD
1. Income Tax Rates
c) For Individuals, Hindu Undivided Families, Association of Persons and Body of Individual
Total Income (INR)
Tax Rate

0 – 250,000
Nil

250,001 – 500,000
10%
500,001 – 1,000,000
20%
1,000,000 and above
30%



Surcharge of 10% of the total tax liability where the total income
exceeds INR 10 million.
Education cess of 3% is leviable on the amount of income-tax and
surcharge, if any.
The exemption limit remains INR 300,000 in case of
resident
individuals of the age of 60 years or more but less than 80 years.
In case of individuals of the age of 80 years or above, the
exemption limit remains INR 500,000
Rebate of INR 2,000 or actual tax payable whichever is less for
resident individuals with total income up to INR 500,000
d) For Co-Operative Societies
Total Income (INR)
Tax Rate

Up to INR 10,000
10%

10,001 – 20,000
20%
20,001 and above
30%
Union Budget 2014
Surcharge of 10% of the total tax liability where the total income
exceeds INR 10 million.
Education cess of 3% is leviable on the amount of income-tax and
surcharge, if any.
TAX CARD
2. Minimum Alternative Tax (MAT)
Total Income (INR)
MAT
Domestic Company
Income < 10 million
Income > 10 million, but <100 million
Income > 100 million
19.055%
20.008%
20.960%
Foreign Company
Income < 10 million
Income > 10 million, but <100 million
Income > 100 million
19.055%
19.436%
20.008%
Firms, LLP, Local Authorities
& Co-Operative Societies
Income < 10 million
Income > 10 million
19.055%
20.961%
3. Tax on distribution of dividend, buyback of shares
Particular
Tax Rate
Payable By
Tax on Dividend received from the Domestic Company
16.995%
Domestic Company
Tax on Dividend received from the Foreign Company
16.995%
Shareholder
Tax on buyback of unlisted shares
22.660%
Domestic Company
Union Budget 2014
TAX CARD
4. Capital Gain Tax Rates
Particular
Short Term Capital Tax
Rates*
Long Term Capital Tax
Rates*
Sale transaction of equity shares / unit of an
equity oriented fund which attract STT
15%
Nil
Sale transaction other than mentioned above:
Individual (resident and non resident)
Slab Rates
Firms including LLP (resident and non resident)
30%
Resident Companies
30%
Overseas financial organisations specified in
Section 115AB
40% (corporate)
30% (non-corporate)
10%
FIIs
30%
10%
Other Foreign Companies
40%
20% / 10%**
Local authorities
30%
20% / 10%**
Co-operative society
Slab Rates
*Plus applicable education cess and surcharge
** 20% with indexation 10% without indexation for listed securities and zero coupon bonds (other than units)
20% / 10%**
TAX CARD
5. Special tax rates for non resident
Particular
Tax Rate*
Interest received on loans given in foreign currency to Indian concern or GOI
20%
Interest received on notified Infrastructure debt fund
5%
Interest received from Indian Company or Business Trust on monies borrowed
in foreign currency and approved by the Central government:
• Under a loan agreement borrowed from 1 July 2012 to 30 June 2017
• By issue of long term infrastructure bond from 1 July 2012 to 30 June 2017
• By issue of long term bond from 1 October 2014 to 30 June 2017
5%
Income in respect of units purchased in foreign currency of specified Mutual Funds / UTI
20%
Royalty
25%
Fees for Technical Services
25%
Interest on FCCB, FCEB /dividends on GDRs(c)
10%
*Plus applicable education cess and surcharge
Union Budget 2014
TAX CALENDAR
Month
Payment
of TDS
TDS Return
Income
Tax Return
Advance
Tax
Payment
Payment
of Service
Tax
Service
Tax
Return
ESIC
Payment
PF
Payment
VAT
Payment
April
30
-
-
-
-
25
21
15
21/30
May
7
15
-
-
5
-
21
15
21
June
7
-
-
15
5
-
21
15
21
July
7
15
31
-
5
-
21
15
21
August
7
-
-
-
5
-
21
15
21
September
7
-
30
15
5
-
21
15
21/31
October
7
15
-
-
5
25
21
15
21
November
7
-
30
-
5
-
21
15
21
December
7
-
-
15
5
-
21
15
21
January
7
15
-
-
5
-
21
15
21
February
7
-
-
-
5
-
21
15
21
March
7
-
-
15/31
5/31
-
21
15
21
Union Budget 2014
ABBREVATIONS
ALP
Arm Length Price
GDP
Gross Domestic Product
APA
Advance Pricing Agreement
GDR
Global Depository Receipt
BCD
Basic Custom Duty
GST
Goods and Service Tax
DDT
Dividend Distribution Tax
GOI
Government of India
DTA
Domestic tariff area
InvIT
Infrastructure Investment Trusts
DTC
Direct Tax Code
IRDA
Insurance Regulatory and Development Authority
EHTP
Electronic Hardware Technology Park
LIG
Lower Income Group
EOU
Export Oriented Unit
LTCG
Long Term Capital Gain
EWS
Economically Weaker Sections
PPP
Public – Private Partnerships
FDI
Foreign Direct Investment
REIT
Real Estate Investment Trusts
FCCB
Foreign Currency Convertible Bonds
SAD
Special Additional Duty
FCEB
Foreign Currency Exchangeable Bonds
SEBI
Securities and Exchange Board of India
FIPB
Foreign Investment Promotion Board
SPV
Special Purpose Vehicle
FII
Foreign Institutional Investor
STP
Software Technology Park
FM
Finance Minister
STT
Security Transaction Tax
Union Budget 2014
CONTACT
Gautam Khurana (Managing Partner, India Law Offices)
T +91 (11) 24622218, 24619750, 24619751
F +91 (11) 24654364
E [email protected]
New Delhi Offices
D-19 (GF) & D-31,
South Extension-I,
New Delhi-110049
India
Bangalore Offices
No - S 45 Vatika Business Centre
Divyasree Chambers, 2nd Floor,
Wing A, 11, O'shaugnessy Road,
Langford Town,
Bangalore – 560025
India
Pune Offices
Vatika Business Center,
Level-5, Tech Park-1,
Airport Road, Yerwada,
Pune - 411 006,
India
Mumbai Offices
106, Durga Chambers,
8A Veera Desai Ind. Estate,
Veera Desai Rd.
Andheri (W)
Mumbai-400 053
India
Chennai Offices
23/10, I Avenue,
Shastri Nagar, Adyar,
Chennai – 600 034,
India
Hyderabad Offices
Vatika Business Centre
3rd Floor, NSL Icon, Road No 12,
Banjara Hills
Hyderabad 500 034
India
Union Budget 2014