1. No change in Tax Rate. All persons including Individuals, HUFs, Firms and Companies to pay same tax. However, education cess is being increased from 3% to 4%, to be known as Health & Education Cess.
2. For Domestic Companies having total turnover or gross receipts not exceeding Rs.250 Crores in Financial Year 2016-17 shall be liable to pay tax at the rate of 25%, as against the present ceiling of Rs.50 Crores in Financial Year 2015-16.
3. Long-term Capital Gain exemption under section 10(38) in respect of listed STT paid shares being withdrawn in case of gain exceeding Rs.1,00,000/-. However, capital gain up to 31.01.2018 shall not be taxed, as cost of acquisition will be taken as Fair Market Value as on 31.01.2018.
4. Tax on STT paid Long-term Capital Gain will be 10% under Section 112A. Further, such tax will be liable for TDS.
5. Standard Deduction of Rs.40,000/- for salaried employees. However, benefit of transport allowance of Rs.19,200/- and Medical Reimbursement of Rs.15,000/- under Section 17(2) are being withdrawn. Thus, the net benefit to salaried class is only Rs.5,800/-.
6. Provisions of Section 43CA, 50C and 56(2)(x) being amended to allow 5% variation from sale consideration vis-a-vis stamp duty value, on account of location, disadvantage etc.
7. Provisions of section 40(ia), 40A(3) and 40A(3A) are being made applicable to Charitable Trusts. Hence, expenditure incurred without deduction of tax or in cash exceeding Rs.10,000/- will not be eligible as application of income under section 10(23C) and section 11(1)(a).
8. Agriculture Commodity Derivates income/loss also not to be considered as speculative under section 43(5).
9. Income Computation and Disclosure Standards (ICDS) being given statutory backing in view of decision of Delhi High Court.
10. Marked-to-market loss computed as per ICDS to be allowed under section 36.
11. Gain or loss in Foreign Exchange as per ICDS to be allowed under new section 43AA.
12. Construction Contract income to be computed on percentage of completion method (POCM) as per ICDS.
13. Valuation of Inventory including Securities to be as per ICDS.
14. Interest on compensation, enhanced compensation, claim or enhancement claim and subsidy, incentives to be taxed in the year of receipt only as per new Section 145B.
15. Conversion of stock-in-trade to capital asset to be charged as business income in the year of conversion on the basis of Fair Market Value on the date of conversion.
16. Section 54EC benefit of investment in Bonds to be restricted to Capital Gain on land and building only. Further, period of holding being increased from 3 years to 5 years.
17. PAN to be obtained by all entities including HUFs, other than individuals, in case aggregate of financial transactions in a year is Rs.2,50,000/- or more. All Directors, Partners, Members of such entities also to obtain PAN.
18. All companies, irrespective of income, to file returns, and in case it is not filed, such companies will be liable for prosecution, irrespective of the fact weather it has tax liability of Rs.3,000/- or not.
19. Assessments to be e-assessments under new section 143(3A).
20. No adjustment under section 143(1) while processing on account of mismatch with Form 26AS and Form 16A.
21. Deemed dividend to be taxed in the hands of the company itself as Dividend Distribution Tax @ 30%.
22. Penalty for non-filing financial return as required under section 285BA being increased to Rs.500/- per day.