FOR INDIVIDUALS
Tax to be reduced by restructuring slab rates; highest tax rate of 30% to be applicable for income over Rs 25 lakh
Tax breaks on savings raised to Rs 3 lakh from Rs 1 lakh (at present under Section 80C)
Interest component on home loan for self-occupied property to be ineligible for deduction for calculating income from house property
All withdrawals from provident fund accounts opened from April 2011 to be taxable; life insurance also proposed to be covered by EET method
Wealth tax limit raised to Rs 50 crore. Tax of 0.25 per cent above this limit.
Perks to be included in salary income and taxed
Retirement benefits be exempted from tax only if saved in retirement benefits account
Scope of higher education for tax deduction purposes to be expanded
FOR COMPANIES
Tax rates to be cut from 30 to 25%
All capital gains arising before April 1, 2000 will be exempted
New framework for computation of business income
Profit-linked incentives to be replaced with investment-linked incentives; companies allowed sops for period in which they can recover capital and revenue expenses
Eligible sectors include SEZs, petroleum and natural gas and developing, power, maintaining and operating infrastructure facilities, maintenance of hospitals, certain food and warehousing units
Tax breaks for sectors such as IT to be withdrawn
Area-based exemptions to be grandfathered
Profit determination on a presumptive basis for sectors such as retail trading, goods vehicles business, operation of ship and aircraft business, civil construction
Amalgamations and demergers to be made tax-neutral
Business losses can be carried forward indefinitely
Dividend distribution tax of 15%
Foreign company can be treated as an Indian resident if control, management in India at any time in a financial year. At present, the company has to be wholly-situated in India
MAT burden to increase as tax will be be calculated on gross value of assets; carry forward to be disallowed
The rate of MAT will be 2% of the value of gross assets; for banking companies rate proposed at 0.25% for banking companies
Specified international transactions to be reported to the designated Transfer Pricing Officer
FOR THE MARKETS
STT to be scrapped and replaced with capital gains tax
To do away with distinction between long, short-term capital gains
Base year for calculation of capital gains tax moved to April 2000; all capital gains between April 1981 and March 2000, not liable to tax
No tax deduction on interest payable on any government security
Profits of non-life insurance business to be disclosed annually
No tax deduction on interest payable to banking companies, insurers
OTHERS
Changes in rates to be undertaken through amendment of Schedules
Concept of assessment year scrapped
Taxation of all non profit organisations rationalised
Tax recovery officers to deal with recovery of taxes that are due for over a year
Steps to be taken to amend the Right to Information Act prohibiting disclosure of information relating to any assessee to a third party except under special circumstances
To act as deterrent, a list of wilful defaulters proposed; it will include those who do not file returns by due date
Those wilfully under-reporting tax base liable to penalty of up to twice the tax payable
In the case of a conflict between the provisions of a DTAA and the tax code, the one that is later in point of time will prevail
To deal with issues such as round-tripping, General Anti-avoidance Rule proposed; to be invoked if an arrangement is to misuse the provisions of the law, lacks commercial substance, avoid payment of taxes
