We are glad to share with you our presentation on Key Highlights of 2015 Budget of India​,​​ which was announced on 28.02.2015​. Please note this contains important key points and not a detailed analysis of the Budget. We have thus kept i​t​ simple and short. We hope it helps you in understanding the crux of the Budget in short time. We look forward for your feedback on the same. Please feel free to share it with your colleagues and associates.

1. 2015
Niraj D Mahajan & Co.
Chartered Accountants
28/02/2015
Indian Budget Highlights
TAX

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THE KING’S SPEECH
Presenting the Union Budget in the House of Parliament for second time, the Finance Minister of India
Mr. Arun Jaitely touched upon various sectors and aspects, the focus being job creation, poverty
elimination, enhancing investment and economic growth.
Where the IMF and WTO had downgraded its forecast of global economic growth by 0.3% and
1.3% respectively, the forecasts for India has upgraded or remained same establishing that it is ‘India’s
chance to fly’.
After the new government led by Mr
Narendra Modi (Prime Minister of India) from
2014, the CPI inflation has declined from 11.2%
to 5.1% and normal foreign inflows has
increased from $15 billion to 55 billion and also
the stock market is the second-best performing
amongst various major economies.
The GDP for 2014-15 has been 7.4% and
expected for 2015-16 will be between 8% to 8.5%. Aiming a double digit GDP growth is not beyond
reach.
GST was being discussed since over a decade now, and today we are very much close to its
implementation. GST will bring in place a state-of-the-art indirect tax system from 1st
April 2016. Also,
the FM raised concerns over stagnant manufacturing growth (17%) and manufacturing exports (10%) of
GDP. Thus, a “Make in India” (www.makeinindia.com) initiative was started in 2014 with an object to
create jobs as well.

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OVERVIEW

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DIRECT TAXES
CORPORATE TAXES
 Reduction in Corporate Tax rate from 30% to 25% over the next 4 years with removal
of various kinds of tax exemptions and incentives, which were reasons for various tax
disputes. This will be done in phased manner with objective of increased investments,
higher growth and jobs
 Domestic Transfer Pricing threshold limit increased from INR 50 million to 200 million
to reduce compliance costs of small taxpayers
 Surcharge at the rate of 7% for domestic companies having income exceeding 10
million upto 100 million and at 12% for income exceeding 100 million
 Foreign Companies surcharge rate continued at 2% for income exceeding 10 million
upto 100 million and at 12% for income exceeding 100 million.
 Wealth tax abolished. It is replaced by additional 2% surcharge for the super-rich
having taxable income over INR 10 million
PERSONAL TAXES
 No changes in personal tax slabs. Basic limit of exemption remain same at INR
2,50,000
 Wealth tax abolished. It is replaced by additional 2% surcharge for the super-rich
having taxable income over INR 10 million
 Surcharge at the rate of 12% for taxable income exceeding INR 10 million. This
surcharge similarly applicable to HUFs, AOPs, BOIs, AJPs, Firms, Cooperative Societies,
and Local Authorities

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 Health insurance premium deduction limit increased from INR 15,000 to INR 25,000.
Similar limit of INR 30,000 to senior citizen and deduction of medical treatment of INR
30,000 to very senior citizens (above age of 80 years) who are not covered by health
insurance
 Deduction limit increased from INR 1,00,000 to INR 1,50,000 towards contribution to
Pension Fund and New Pension Scheme
 Additional deduction u/s 80CCD of INR 50,000 for contribution to New Pension Scheme
considering requirement of India to be a pensioned society instead of pensionless
society
 Transport Allowance which remained the same since more than a decade has doubled
its exemption limit from INR 800 to INR 1,600 per month.
 Yoga is acknowledged gift to the world. Yoga will now be included in the definition of
‘charitable purpose’ u/s 2(15)
 The ceiling limit of INR 25,00,000 to carry out incidental business activity by a
charitable trust to be replaced by 20% of total receipts
OTHERS
 Additional Investment allowance @15% and additional depreciation @15% to new
manufacturing units setup during 01.04.2015 to 31.03.2020 in notified areas of Andhra
Pradesh and Telangana
 Acceptance or payment of advance of INR 20,000 or more in cash is prohibited to
purchase immovable property.
 Quoting of PAN (Permanent Account Number) is now mandatory for any sale/purchase
above INR 0.1 million
 CBDT (Central Board of Direct Taxes) and CBEC (Central Board for Excise and Customs)
to have improved sharing of database among each other
 No more Permanent Establishment (PE) exposure for fund managers of offshore funds
operating from India

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 To boost young entrepreneurs using latest technology, technology inflow is required at
low costs. Thus, rate of Income tax on Royalty and fees for technical services (FTS)
reduced from 25% to 10%
 100% deduction to contribution to ‘Swachh Bharat Kosh’ (Clean India and ‘Clean Ganga
Fund’
 General Anti Avoidance Rule (GAAR) is deferred by 2 years. Investments made upto
31.03.2017 shall not be subjected to GAAR.
 Reduced rate of tax of 5% on income of foreign investors (FIIs and QFIs) to be extended
from 31.05.2015 to 30.06.2017
 The rule of TDS to be done by Individual purchaser of immovable property is relaxed
when the seller is a non-resident
 National Fund for Control of Drug Abuse eligible for 100% deduction u/s 80G

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INDIRECT TAXES
 To modernise indirect tax regime, introduction of GST is necessary. GST is expected to
play a transformative role in the economy functions which also lead to unspeculated
challenges. To facilitate smooth introduction of GST from next year, Service tax
including cess increased from 12.36% to a consolidated rate of 14%
CUSTOM DUTY
 Some of the inputs whose duty is reduced :
- ‘Metal Parts’ for use in manufacture of electrical insulators’
- EPDM, water blocking tapes and mica glass tape used in insulated wire manufacturing
- Sulphuric acid used in making fertilizers
- Some of the items whose Basic Customs Duty is reduced:
- LED (OLED) TV panels from % to Nil
- Active energy Controller (AEC) for use in making of Renewable power system (RPS)
- Black Light Unit Module for use in the manufacture of LCD/LED TV panels from 10% to
Nil.
- Certain specified inputs for use in the manufacture of flexible medical video
endoscopes from 5% to 2.5%.
- Exempt artificial heart (left ventricular assist device) from Basic Customs Duty of 5%
and CVD
 Some of the items whose Basic Custom duty is increased :
- Metallurgical coke from 2.5% to 5%
- Tariff rate on iron & steel and articles of iron or steel, falling under Chapters 72 and 73
of the Customs Tariff, from 10% to 15%.
- Tariff rate on Commercial Vehicles from 10% to 40% and effective rate from 10% to
20%.

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EXCISE DUTY
 The standard ad valorem rate of Basic Excise Duty is being increased from 12% to
12.5% and specific rates of Basic Excise Duty on petrol, diesel, cement, cigarettes &
other tobacco products (other than biris) are being suitably changed
 Duty increased from 12% to 15% on sacks and bags of polymers of ethylene
 Concession on specified parts of manufacture of electrically operated and hybrid
vehicles to continue up to 31.03.2016
 Excise duty on cigarettes is being increased by 25% for cigarettes of length not
exceeding 65 mm and by 15% for cigarettes of other lengths. Similar increases are
proposed on cigars, cheroots and cigarillos.
 Excise duty on chassis for ambulances is being reduced from 24% to 12.5%.
 Tablet computers from 12% to 2% without CENVAT credit or 12.5% with CENVAT credit.
 Solar water heater and system from 12% to Nil without CENVAT credit or 12.5% with
CENVAT credit
 Mobiles handsets, including cellular phones from 1% without CENVAT credit or 6% with
CENVAT credit to 1% without CENVAT credit or 12.5% with CENVAT credit
SERVICE TAX
 Service tax rate including cess increased from 12.36% to consolidated rate of 14%. This
will be for a period of one year, since GST will be implemented from 01.04.2016
 Exemption to services of common affluent treatment plants
 Pre cold storage services in relation to fruits and vegetables exempted from tax
 Service provided by way of exhibition of movie by the exhibitor/theatre owner to the
distributor or association of persons consisting of exhibitor as one of it’s member is
being exempted

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 All ambulance services provided to patients are being exempted
 Manpower supply and security services when provided by individual, HUF, partnership
firm to a body corporate are being brought to full reverse charge as a simplification
measure. Presently, these are taxed under partial reverse charge mechanism.
 Exemption to services provided by a performing artist in folk or classical art form of (i)
music, or (ii) dance, or (iii) theater, will be limited only to such cases where amount
charged is upto Rs 1,00,000 per performance (except brand ambassador)
 Exemption to construction, erection, commissioning or installation of original works
pertaining to an airport or port is being withdrawn
 Service tax to be levied on service by way of admission to entertainment event of
concerts, non-recognized sporting events, pageants, music concerts and award
functions, if the amount charged for admission is more than Rs 500.
OTHER HIGHLIGHTS OF THE BUDGET
 Direct tax proposal results in revenue loss of INR 83,150 million and Indirect tax
expected yield is INR 2,33,830 million resulting in net effect of positive revenue gain of
INR 1,50,680 million
 Black Money curbing measures are in place now introducing non-compoundable
offence with punishment of rigorous imprisonment upto 10 years. This is specifically for
concealment of income and assets and evasion of tax in relation to foreign assets.
Many other measures in place with special focus to foreign assets income concealment.
 Online Central Excise/Service Tax Registration within two working days
 Time limit for taking CENVAT Credit on inputs and input services is being increased
from six months to one year
 Central Excise/Service Tax assessees are being allowed to issue digitally signed invoices
and maintain other records electronically

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IMPORTANT DETAILS:
INR (Indian Rupees) International terminology
1,00,000 One Lakh 0.1 million
10,00,000 Ten Lakhs 1 million
1,00,00,000 One Crore 10 million and so on
www.makeinindia.com
www.indiabudget.nic.in
www.investindia.gov.in

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Contact Us
Niraj Mahajan
Niraj D Mahajan & Co.
Chartered Accountants
E: nirajdmahajan@gmail.com
M:+91 98 600 92752
LinkedIn profile: http://in.linkedin.com/pub/niraj-
mahajan/22/65/607/
Pune
First Floor, Samarth Prasad, 253/254
Sadashiv Peth, LBS Road, Pune 411030
India
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general nature and is not intended to
address the circumstances of any
particular individual
or entity. Although we endeavor to provide
accurate and timely information, there can
be no guarantee that such information is
accurate as of the date it is received or
that it will continue to be accurate in the
future. No one should act on such
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without appropriate professional advice
after a thorough examination of the
particular situation.