2. Contents
2
Snapshot of the year gone by
Agenda and focus for year
2017-18
Key Policy Announcements
Key Direct Tax Proposals
Key Indirect Tax Proposals
3. Snapshot of the year gone by
Demonetization of high denomination currency notes
Introduction of income disclosure and immunity schemes
Passage of Constitutional Amendment Bill enabling GST passed
The GST Council has finalised its recommendations on almost all the issues based
on consensus on the basis of 9 meetings held
Successful renegotiation of key tax treaties with Mauritius, Cyprus & Singapore
resulting in removal of capital gain exemptions
Final Guidelines for Place of Effective Management (‘POEM’) framed
3
4. Snapshot of the year gone by
GAAR clarifications issued – provisions come into force on 1 April 2017
Indirect transfers valuation and reporting rules notified
New Insolvency and Benami Property laws brought into force
Easwar Committee Report on tax simplification submitted
4
5. 5
‘TEC’ is the agenda for year 2017-18
TRANSFORM The quality of governance and quality of life of our people
ENERGISE Various sections of the society, especially the youth and the vulnerable, and
enable them to unleash their true potential
CLEAN The Country from the evils of corruption, black money and non-transparent
political funding
Agenda for year 2017-18
8. Key Policy Announcements
Proposal to abolish Foreign Investment Promotion Board (‘FIPB’) and further
liberalization of Foreign Direct Investment (‘FDI’) policy is under consideration
Shares of Railway PSEs like IRCTC, IRFC and IRCON will be listed in stock exchanges
Railway lines of 3500 kms will be commissioned in 2017-18
Proposal to set up strategic crude oil reserves at two more locations
Second phase of Solar Park development to be taken up for additional 20,000 MW
capacity
Incredible India 2.0 Campaign will be launched across the world to promote tourism and
employment
8
9. Key Policy Announcements
Proposal to mandate all Government receipts through digital means beyond a
prescribed limit is under consideration
Proposal to launch Aadhar Pay, a merchant version of Aadhar Enabled Payment
System
Proposal to launch two new schemes to promote Government e-payment app
(BHIM app); these are, Referral Bonus Scheme for individuals and a Cashback
Scheme for merchants
Proposal to incentivise credit, debit card transactions. Move to discourage cash
transaction and track black money
9
10. Key Policy Announcements
The Finance Minister expressed the Government’s readiness on all spheres for the
introduction of GST
The extensive reach-out efforts to trade and industry for GST will start from 1 April
2017 to make them aware of the new taxation system
Maximise efforts for e-assessment in the coming year
10
12. Personal Income Tax
Tax rate reduced from 10% to 5% in respect of incomes between INR 250,000 and INR
500,000 for Individuals, Hindu Undivided Family (’HUF’) and Association of Persons
(‘AOP’)
Tax rate reduced from 10% to 5% in respect of incomes between INR 300,000 and INR
500,000 for senior citizens
Surcharge of 10% of tax introduced for incomes between INR 5 million and INR 10
million
Proposal to introduce simple one page form to file Income tax return for the category of
individuals having taxable income upto INR 500,000 other than business income
Introduction of withholding tax regime @ 5% for payment of rent exceeding INR 50,000
per month by Individuals and HUF’s
12
13. Corporate income tax
Tax rate reduced to 25% for medium and small companies with annual turnover of less
than INR 500 million
No other reduction in Minimum Alternate Tax (‘MAT’) and corporate tax rates
MAT/ Alternate Minimum Tax (‘AMT’) credit allowed to be carried forward for 15 years
(from existing 10 years)
Rationalisation of MAT in line with treatment under Indian Accounting Standards
(‘Ind AS’) (from AY 2017-18)
No announcement on scrapping of Income Computation Disclosure Standards (‘ICDS’)
Proposal of concessional tax rate of 10% for sale of carbon credits
13
14. Capital Gains
Exemption for long term capital gains on sale of listed shares not available for shares
acquired after 1 October 2004 without payment of Securities Transaction Tax –
Exceptions to be notified
Joint Development Agreements (‘JDAs’) – relaxation of capital gains on deemed transfer
of immovable properties in JDAs
Land & Building – change in holding period reduced from 3 years to 2 years for long term
eligibility
Base year for computing cost of acquisition and improvement changed from 1981 to
2001
Conversion of preference shares to equity shareholding not to be considered as capital
gain
14
15. International Tax
Investments held directly or indirectly by a non-resident in a Category I or a Category II
Foreign Portfolio Investors (‘FPI’) excluded from indirect transfer provisions –
retrospective from AY 2012-13
Clarifications proposed to be issued to exclude offshore redemptions consequent to sale
of investments chargeable to tax in India from the ambit of indirect transfer provisions
Benefit of 5% rate of interest on External Commercial Borrowings (‘ECB’) & Bonds
extended to year 2020
Proposal to enable provisions for rectification of assessment to grant Foreign Tax Credit
(‘FTC’) on payment of disputed tax abroad
15
16. Transfer Pricing
Domestic Transfer Pricing (‘DTP’) scope restricted – transactions between two
domestic related parties not to trigger specified domestic transaction provisions
except where one of the parties is claiming a profit linked deduction
Proposal to introduce secondary adjustment where primary adjustment exceeds
INR 10 million
Proposal to restrict interest deduction in line with recommendation of BEPS Action
Plan 4 - restricts deduction towards interest paid to non-resident associated
enterprises (’AE’) to 30% of EBITDA (earnings before interest, taxes, depreciation
and amortization). Provision to trigger only when interest expenditure exceeds INR
10 million
16
17. Other announcements
Time limit for completion of assessments proposed to be reduced in respect of:
AY 2018-19 to 18 months from 21 months
AY 2019-20 to 12 months from 21 months
Restriction on loss carry forward for start ups relaxed for change in shareholding
due to capital infusions
Tax refunds claimed in tax returns cannot be withheld in case scrutiny assessments
without the approval of higher authorities
Cash transactions in excess of INR 300,000 prohibited: penalty leviable
Depreciation and deduction not allowed in respect of cash payments in excess of
INR 10,000
17
19. Common legislative changes
No change in peak rate of customs, excise and service tax – due to likelihood of GST
implementation in near future. However, no definitive announcement on the GO-LIVE date
The Research and Development (‘R&D’) Cess Act, 1986 abolished. Consequential
amendments made in the Service tax law for withdrawal of notification granting deduction of
R&D cess paid (effective from the date of enactment of the Finance Bill, 2017)
Application to be filed for transfer of Cenvat Credit on account of change in ownership/ sale/
merger/ lease/ transfer etc. of business/ factory. Such application to be allowed within a period
of 3 months from the date of receipt of application (effective from 02 February 2017)
Authority for Advance Ruling under Indirect taxes merged with the one under the Direct tax
legislation
19
20. Key changes – Tariff rates
Change in custom duty/ excise duty tariff rates:
To incentivise domestic value addition ‘Make in India’ (e.g LNG, parts of LED)
To address problems of inverted duty structure (e.g Solar tempered glass)
To provide protection to the domestic industry (e.g PCB’s for mobile)
To promote cashless transactions and domestic manufacturing of device (e.g POS card reader, micro
ATM, scanner and components)
To improve ease of doing business and export promotion (e.g increase the limit of duty free import of input
for leather/ synthetic footwear)
Anti avoidance measure (eg. Silver coins)
Key legislative change – Customs:
Ambit of importer/ exporter under customs widened to include beneficial owner
Ceiling of one day from the date of arrival of vessel/ aircraft/ vehicle introduced for filing bill of entry in case
of imports for home consumption or warehousing
20
21. Disclaimer
This publication has been prepared for general guidance on matters of
interest only, and does not constitute professional advice. You should not act
upon the information contained in this publication without obtaining specific
professional advice. No representation or warranty (express or implied) is
given as to the accuracy or completeness of the information contained in this
publication, and, to the extent permitted by law, TASS Advisors LLP, its
members, employees and agents accept no liability, and disclaim all
responsibility, for the consequences of you or anyone else acting, or
refraining to act, in reliance on the information contained in this publication or
for any decision based on it. Without prior permission of TASS Advisors LLP,
this publication may not be quoted in whole or in part or otherwise referred to
in any documents
21
22. TASS Advisors has its offices in New Delhi, Noida and Dehradun with
a Business desk in Cyprus
New Delhi
Dehradun
Noida
Or visit us at: www.tassadvisors.com
B 18, Lower Ground Floor, Express Green,
Sector 44, Noida – 201301
+91 120 4222 010
First Floor, 5/3, Cross Road,
Dehradun, Uttrakhand – 248001
+91 135 271 9600
62, Lower Ground Floor, Jasola, Pocket 2,
New Delhi – 110025
+91 11 4102 7248
Our Offices
22
23. 23
Thank you
www.tassadvisors.com
Disclaimer: The contents of this presentation are confidential and intended for the named recipient(s) only. It shall not attach any liability
on the originator or TASS Advisors or its affiliates/ member firms/ external counsels. Any form of reproduction, dissemination, copying,
disclosure, modification, distribution and/ or publication of this message without the prior written consent of TASS Advisors is strictly
prohibited. If you have received this presentation in error please delete it and notify the sender immediately
