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Union budget 2015-16: Deciphering the key Direct and Indirect Tax Proposals

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Union budget 2015-16: Deciphering the key Direct and Indirect Tax Proposals

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Union budget 2015-16: Deciphering the key Direct and Indirect Tax Proposals

  1. 1. Union Budget 2015-16 Deciphering the Budget proposals 1st March, 2015
  2. 2. - DecipheringtheBudgetproposals 2 Budget Proposals 1. Direct Taxes 1.1. Rates of Income Tax v The personal and corporate income tax rates remain unchanged. However, an additional 2% surcharge has been proposed to be imposed. The surcharge is imposed as a substitution of the Wealth tax regime. The surcharge rates are summarized as below: Type of Assessee Individuals (including non-residents) Domestic Company Companies other than domestic companyTotal Income 1 to 10 crore 12% 7% 2% More than 10 crore Same as above 12% 5% v Importantly, it is also proposed to reduce the corporate tax rate to 25% in a phased manner over next 4 years. Consequentially, it is proposed that exemptions/incentives available to the corporate may also be withdrawn in a phased manner over a period of 4 years. v Rebate under section 87A of the Income Tax Act, 1961 (‘the Act’) to continue as no sunset clause has been inserted by the Finance Bill, 2015. Other deductions under personal taxation v Contribution to Sukanya Samriddhi Scheme shall be considered as an eligible investment under section 80C of the Act. Further, any payment from SukanyaSamriddhi Account shall be exempt from income tax under section 10 (11A) of the Act. v The contribution to certain pension schemes under section 80CCC of the Act is increased to 1.5 Lacs from 1 Lacs. v The contribution to new pension scheme under section 80CCD of the Act is increased by 0.5 Lacs, in addition to the deduction provided under section 80CCD(1) v Deduction for Health insurance for an individual and his family under section 80D increased from 15,000 to 25,000. Further, where no health insurance is taken for very
  3. 3. - DecipheringtheBudgetproposals 3 senior citizens, the medical expenditure for treatment upto 30,000 shall be allowed as deduction. v In case of HUF, health insurance taken for any member of the HUF shall be allowed as deduction upto 25,000 as against the earlier limit of 15,000. v The whole amount incurred by HUF for medical expenditure of very senior citizen shall be allowed as deduction of 30,000. v Deduction for maintenance of a person with disability increased from 50,000 to 75,000 and for those with severe disability to 1.25 lacs from 1 lacs. The said amendment is to take care of the rising medical costs. v Deduction for medical treatment of prescribed ailments has been increased from 60,000 to 80,000. 1.2. Taxation of Real Estate Investment Trusts v Definition of business trust under section 2(13A) of the Act have been modified to mean REITs as trust registered under SEBI (REIT) Regulations, 2014 made under SEBI Act, whether or not notified by the Central Government, as against to those which were required to be notified earlier. v A new section 10(23FCA) is inserted to exempt the income arising out of renting, leasing and letting out the real estate held directly by the REITs and thus, providing a pass through status to the REITs for the purpose of rental income also. Further, suitable amendment is also made to ensure that the said income is not being subject to withholding tax under section 194-I of the 1961. v The income in the nature of 10 (23FCA) distributed by the REITs to the unit holders shall be subject to withholding tax under section 194LBA (3). Section 2(37A) of the Act has also been amended to this effect in order to consider the rates specified therein for the purpose of determining rates for deduction in case of such payments made to non- residents. However, the said income is taxable in the hands of resident investor at normal rates. v The ‘real estate asset’ shall have the meaning as given in Regulation 2 (1) (zj) of SEBI (REIT) Regulation, 2014.
  4. 4. - DecipheringtheBudgetproposals 4 v The benefit of section 10 (38) and section 112 (1) of the Act on REIT units, is now proposed to be made available to a sponsor which was specifically restricted by Finance (No.2) Act, 2014. Reference may be made to the article1 authored by the one of the Founding Partner on 16th July 2014 wherein the said anomaly was highlighted and suggestion was made to address the said anomaly. 1.3. Taxation of Infrastructure Investment Trust (‘INVITs’) v Definition of business trust under section 2(13A) have been modified to mean INVITs as those registered under SEBI (INVIT) Regulations, 2014 made under SEBI Act, whether or not notified by the Central Government, as against to those which were required to be notified earlier. v The nature and proportion of income is to remain the same in the hands of investor as that in the hands of INVITs. However, the loss suffered by the INVITs under any head of income (other than PGBP) which cannot be set-off, is to be carried forward by the INVITs itself and not the investor. v The income of the INVITs shall be deemed to have been credited to the investor on the last day of the previous year where such income is not paid or credited. v The taxation regime for INVITs and the investor as proposed under Section 10 (23FBA), 10 (23FBB) read with Section 115UB is summarized as follows: Nature of Income INVIT Investor All income, other than in the nature of PGBP Exempt [Section 10 (23FBA)]. No requirement of withholding on such incomes by the payer [Notification proposed to be issued under section 197A(1F)] Taxable at rates applicable to the nature of income. INVITs is required to withhold taxes at the rate of 10% [Section 194LBB] Income in the nature of PGBP Company or firm – Taxable at rates specified in Finance Act of relevant year [Section 115UB (4) (i)] Any other case – Taxable at Exempt [Section 10 (23FBB)] 1 http://www.taxsutra.com/experts/column?sid=243.
  5. 5. - DecipheringtheBudgetproposals 5 Maximum Marginal Rates [Section 115UB (4) (ii)] Applicability of DDT No tax on income distributed to the investors as envisaged in section 115- O or 115R [Section 115UB(5)] Not Applicable 1.4. Taxation of Charitable Trusts v Charitable activities as defined under section 2(15) of the Act has been amended to include ‘Yoga’. v In order to encourage the charitable institutions with object of general public utility, the limit on the receipts from activities in the nature of trade, commerce or business for a cess, fee or consideration have been amended to 20% of their total receipts during a previous year as against an absolute threshold of 25 Lacs. The step may have been taken to save the interest of the large charitable institutions where the threshold of 25 Lacs would be very small in comparison to their total receipts. However, such a step may not be appreciated by smaller charitable institutions that were earlier able to claim an absolute exemption of business receipts to the tune of 25 Lacs. v A charitable institution is required to exercise an option of accumulation or setting apart income in excess of 15% in the prescribed form before expiry of time provided to file return of income under 139 (1) of the Further, the period for accumulation or setting apart such income has been decreased from 10 years to 5 years. Act. A statement is further required to be submitted to the Assessing officer stating the purpose for which the income is accumulated or set apart on or before the due date of filing of return under section 139(1). v No benefit under section 11 will available if such statement is not filed or return of income is not furnished before the due date for filing of returns under section 139(1). v 1.5. Disclosure requirements for universities and other institutions v Section 139 (4C) is proposed to be amended to mandate filing of return by any university, other educational institution, any hospital or other institution; which is wholly or
  6. 6. - DecipheringtheBudgetproposals 6 substantially financed by the Government, where the income of such bodies (before giving effect to exemption under section 10) exceed the maximum amount not chargeable to tax. 1.6. Residence v Conditions to be prescribed to determine the period of stay in India where an individual leaves for voyage as member of the crew of a foreign bound ship. v A company having place of effective control in India shall also be considered as a resident of India. An attempt to blend the provisions of the Direct Tax Code in the existing law. It would be interesting to see how the revenue authorities interpret the provision especially in the age of digitalization. 1.7. Rationalizing taxation of Indirect Transfers v An attempt to further clarify the ambiguity around the indirect transfer regime in India introduced by Finance Act, 2012. v Explanation 6 is inserted to clarify that the share/interest shall be deemed to be situated in India if it derives value from assets situated in India and the value of such assets— (i) exceeds the amount of ten crore rupees; and (ii) represents at least 50%2 of the value of all the assets owned by the company or entity, as the case may be; v The value of the assets has been defined to be the fair market value of such assets without deducting the liabilities calculated as per the prescribed method v It is further clarified that no income shall be deemed to accrue or arise to a non-resident from indirect transfers (i) where entity directly owns the assets situated in India and the transferor (whether individually or along with its associated enterprises), does not hold any right of 2 As per the recommendations of Dr. Shome Committee Report, Direct Tax Code Bill of 2010 as well as by Delhi High Court in the decision of DIT v. Copal Research Mauritius Limited [2014] 49 taxmann.com 125 (Delhi), and AAR Ruling in Moody's Analytics, USA & Ors [2012] 24 taxmann.com 41 (AAR), the term ‘substantially’ was interpreted to mean a threshold of 50% of the total value derived from Indian assets.
  7. 7. - DecipheringtheBudgetproposals 7 management or voting rights exceeding 5% of the total voting rights in that entity at any time in preceding 12 months; or (ii) where such entity indirectly owns the assets situated in India and the transferor (whether individually or along with its associated enterprises), does not hold any right of management or voting rights exceeding 5% of the total voting rights in that entity or the company/entity that directly owns assets in India at any time in preceding 12 months. v In a case where all the assets owned, directly or indirectly, by a company or, as the case may be, an entity referred to in the Explanation 5, are not located in India, the income of the non-resident transferor, from indirect transfer shall be only such part of the income as is reasonably attributable to assets located in India and determined in such manner as may be prescribed; v The intention behind insertion of explanations is to provide clear guidelines is to avoid disputes arising out of the ambiguous provisions in respect to indirect transfers Exemption on transfer of shares deriving value from Indian Assets: Section 47 of the Act is amended to include the following additional scenarios: v Transfer, in a scheme of amalgamation, of a capital asset, being a share of a foreign company which derives, directly or indirectly, its value substantially from the share or shares of an Indian company, held by the amalgamating foreign company to the amalgamated foreign company provided: · 25% of the shareholders of amalgamating foreign company become the shareholder of amalgamated foreign company; and · No capital gain on such transfer is attracted in the country where amalgamating foreign company is incorporated. v Transfer in a demerger, of a capital asset, being a share of a foreign company which derives, directly or indirectly, its value substantially from the share or shares of an Indian company, held by the demerged foreign company to the resulting foreign company provided:
  8. 8. - DecipheringtheBudgetproposals 8 · 75% of the shareholders of demerged foreign company continue to remain the shareholder of resulting foreign company; and · No capital gain on such transfer is attracted in the country where demerged foreign company is incorporated. v Section 49 (1) (iii) (e) of the Act is also amended to provide for the cost of acquisition to be the same as in the hands of amalgamating foreign company or demerged foreign company, as the case may be. 1.8. Merger of similar schemes of mutual funds v Section 47 of the Act is proposed to be amended to provide for exemption on transfer of units allotted under a consolidated scheme under SEBI (MF) Regulations, 1996. The cost of acquisition of such units of consolidated scheme is proposed to be the cost of units in the consolidating scheme and period of holding of the units of the consolidated scheme shall include the period for which the units in consolidating schemes were held by the investor. v The said move is in line of the effort of SEBI to encourage merger of similar mutual fund schemes and will avoid levy of capital gains on such transfers. 1.9. Cost of acquisition to be same as in the hands of previous owner v Section 49 (1) (iii) (e) of the Act is also proposed to be amended to provide for that cost of acquisition of an asset acquired by resulting company shall be the cost for which the demerged company acquired the capital asset as increased by the cost of improvement incurred by the demerged company. 1.10. Interest payments to head office v A measure of rationalizing the provisions of the Act and Double tax Avoidance Agreements (‘DTAA’). v A branch is treated as a different taxable entity as per the provisions of the Act read with the DTAA. Accordingly, any interest paid by the branch to its head office is allowed as deduction while computing the tax liability on the profits attributable in India as per DTAA. However, such interest received by the head office was held not be taxable in
  9. 9. - DecipheringtheBudgetproposals 9 India on the principle that no one can earn income from itself.3 This was also held by the Mumbai ITAT special bench in the case of Sumitomo Mitsui Banking Corporation [136 ITD 66]. The reasoning given by the Bench was that specific provisions which allows for the taxability of interest paid by a permanent establishment to its head office and other branches are absent in the domestic law. v The insertion of Explanation in section 9 (1) (v) is intended to implement the suggestion of the Bench and it is provided that any interest payable by Indian PE to the head office or any other PE of the bank outside India shall be: - deemed to accrue or arise in India; - shall be chargeable to tax in respect of such interest income in addition to any other income attributable to the PE in India; - The PE in India shall be deemed to be a person separate and independent of the non- resident person of which it is a PE; - The provisions of the Act relating to computation of total income, determination of tax and collection and recovery would apply v Thus, the PE in India shall be obligated to deduct tax at source on any interest payable to either the head office or any other branch or PE, etc. of the non-resident outside India. Further, non-deduction would result in disallowance of interest claimed as expenditure by the PE apart from attracting levy of interest and penalty in accordance with relevant provisions of the Act. 1.11. Presence of fund manager in India excluded to constitute a PE v In case of eligible offshore Investment fund, the fund managers are generally stationed outside India. Major reason behind this is that the presence of fund manager in India would have constituted a PE in India in terms of Article 5 of various DTAAs entered by India. v For addressing the problems faced by such funds in this respect, it is proposed that the presence of fund manager in India would not trigger the constitution of a PE in India for 3 Sir Kika Bai Premchand v. CIT 24 ITR 506 (SC)
  10. 10. - DecipheringtheBudgetproposals 10 such offshore investment fund. Also, under section 6, the place of effective management shall not be deemed as India by virtue of the Fund manager’s presence. v However, it is clarified that the provision will not have effect on the taxability of income which would have been otherwise taxable if the fund manager was not present in India. 1.12. Rationalization of additional depreciation allowance v Additional depreciation to the tune of 20% is allowed to the assessee engaged in the business of manufacturing of any article or thing. v There has been a controversy for a long time regarding the allowance of additional depreciation in the cases where the asset is put to use for less than 180 days. Since additional depreciation was allowable only in the first year, the 50% claim on account of the additional depreciation was never available to the assessee. v The revenue authorities made additions on the ground that no express provision is available in the act to provide the balance claim in the next assessment year. Accordingly, the proviso inserted in this regard has provided the much needed relief and thus, the balance additional depreciation can now be claimed in the immediately succeeding assessment year. 1.13. Special incentives for investment in backward states v Recently the new state of Telangana has been formed and therefore it requires fresh investment for development. Similarly, due to the partition of the state of Andhra Pradesh it also requires ample investments. v Accordingly, in order to encourage the investment in these states the additional depreciation on the assets purchased and put to use by an assessee carrying out manufacturing activities in the aforesaid states shall be allowable at the rate of 35%. v Further, an investment allowance to the tune of 15% has also been proposed to be allowed for investment in these states.
  11. 11. - DecipheringtheBudgetproposals 11 1.14. Increase in threshold limit for Domestic transfer pricing v Currently, the threshold limit for specified domestic transactions to be subject to transfer pricing provisions is 5 crores. The said limit is increased to 20 crores in order to exclude small business from the transfer pricing provisions. v It would be interesting to see whether in respect of transactions totaling less than 20 crores, a report of similar kind is required to be maintained by the assessee in terms of section 40A(2)/80A(6) of the Act. 1.15. Reduction in rate of tax for Royalties and Fee for technical services (‘FTS’) payable to Non-residents v The rate of tax for royalties and FTS payable to a non-resident, not effectively connected to a PE, was increased from 10% to 25% by Finance Act 2013. In order to reduce hardship faced by small entities and Indian concerns as they were made to bear the tax cast of the non-resident, the rates are once again brought down to 10%. It is a welcome move and is in accordance with Mr. Modi’s ‘Make in India’ mission. v India in today’s scenario require huge amount of technology to be transferred in order to be capable of becoming self-reliant in future. 1.16. Taxation of gains from transfer of ESOPs in form of GDR/FCCBs v Section 115ACA of the Act provided for taxation of a resident employee of an Indian company (including Indian or foreign subsidiaries also) engaged in the specified knowledge based industry such as information technology etc., deriving income by way of dividends or long term capital gains from Global Depository Receipts (‘GDR’) purchased under employees stock option scheme, at the rate of ten per cent. v Explanation (a) to section 115ACA (3) is proposed to be amended to restrict the tax benefit only in respect of Depository Receipts issued to investors against the issue of (i) ordinary shares of an issuing company, being a company listed on a recognized stock exchange or (ii) FCCBs of the issuing company.
  12. 12. - DecipheringtheBudgetproposals 12 1.17. Deduction for employment of new workmen v The existing provisions contained in section 80JJAA of the Act, inter alia, provide for deduction to an Indian company, deriving profits from manufacture of goods in a factory. The quantum of deduction allowed is equal to thirty per cent of additional wages paid to the new regular workmen employed by the assessee in such factory, in the previous year, for three assessment years including the assessment year relevant to the previous year in which such employment is provided. v The requirement of having at least 100 workmen has been reduced to 50 workmen in order to provide the benefit to smaller enterprises. 1.18. Deferment of GAAR and its applicability v GAAR provisions have been postponed for another 2 years to AY 2018-19. v The investment scenario in the country has recently started building up and therefore it is necessary to build confidence in the investors. An anti-avoidance provision like GAAR may be act as deterrent for the investment inflows in India. v Further, investments made up to 31.03.2017 are to be protected from the applicability of GAAR by suitable amendment in rules. 1.19. Accountant not eligible to express opinion in certain cases v The amendment aims at importing the independence rules given under the Companies Act, 2013 under the Act. Therefore, a person who is not eligible for conducting Audit/certification of a company is also ineligible to conduct audit or furnish report/certificate under Act for such company. On similar lines, ineligibility for carrying out any audit or furnishing of any report/certificate under any provisions of the Act in respect of non-company is also provided. v A dependent accountant is, however, eligible to represent before the income tax authorities. v It is further proposed to provide that the person convicted by a court of an offence involving fraud shall not be eligible to act as authorized representative for a period of 10 years from the date of such conviction.
  13. 13. - DecipheringtheBudgetproposals 13 1.20. Foreign tax credit (‘FTC’) v Claim of FTC is one of the major issues faced by various assessees in India. Accordingly, in order to provide clarity on the subject, CBDT has been empowered to make rules for granting FTC. 1.21. Appealable order before CIT(A) v Intimation generated on processing of TCS statement has been made appealable before the CIT (A). 1.22. Powers of Income tax Appellate Tribunal (‘ITAT’) v A University or educational institution is required to obtain approval of the prescribed authority under section 10(23C) of the act in order to claim exemptions on its income arising out of the educational activities. v Such order of the prescribed authority was not appealable before any Income tax authority and the assessee was required to take judicial recourse. In order to rationalize the provisions the order of the prescribed authority refusing to grant the approval is now made appealable before the ITAT v Further, single member bench of ITAT would be able to hear and dispose of case where the total income as computed by the assessing officer does not exceed fifteen lakh rupees. Thereby, reducing the pendency in ITAT. 1.23. Reporting requirements for institutions/entities engaged in scientific research v Section 35 (2AA) of the Act requiring the prescribed authority to submit feasibility report of carrying out scientific research is amended to provide for submission of such report to Principal Chief Commissioner or Chief Commissioner also. v Section 35 (2AB) (3) of the Act is amended to provide for fulfillment of conditions with regard to maintenance of accounts and audit thereof and furnishing of reports in manner, as may be prescribed, in order to be eligible for deduction. 1.24. Changes in revision by Commissioner
  14. 14. - DecipheringtheBudgetproposals 14 v A clarity is been given under section 263 (1) to provide that order passed by the assessing officer shall be deemed to be erroneous in so far as it is prejudicial to the interest of the revenue, if, in the opinion of the principal commissioner or commissioner,- (a) The order is passed without making inquiries or verification which, should have been made; (b) The order is passed allowing any relief without inquiring into the claim; (c) The order has not been made in accordance with any order, direction or instruction issued by the Board under section 119; or (d) The order has not been passed in accordance with any decision, prejudicial to the assessee, rendered by the jurisdictional High Court or Supreme Court in the case of the assessee or any other person. 1.25. Streamlining of provisions of Settlement Commission v The provisions under ‘Chapter XIX-A - Settlement of cases’ are be amended to take care of certain administrative difficulties/loop holes existing in the present set of provisions. v Settlement Commission can be approached for assessment years other than for which notice is issued under section 148 provided such notice could have been issued and return is furnished under 139 or 142, as the case may be; v A proceeding4 for any assessment year shall be deemed to have commenced from the date on which a return of income is furnished under section 139 or section 142, as the case may be and concluded on the date on which the assessment is made or on the expiry of two years from the end of relevant assessment year where no assessment is made; v Time limit of passing of rectification order by settlement commission is amended to include the time limit of six months from the date of rectification application made by the Principal Commissioner or Commissioner of applicant provided such application is made within the period of six months from the date of passing of order by Settlement Commission. An opportunity of being heard is to be given where such order has the effect of modifying the liability of the applicant; 4 Other than the proceedings of assessment or reassessment referred to in clause (i) or clause (iii) or clause (iiia) of Explanation to Section 245A (b) of the Act.
  15. 15. - DecipheringtheBudgetproposals 15 v Reasons of granting of immunity to any person is proposed to be mandatorily recorded in writing in the order passed by the Settlement Commission; v Settlement order passed without providing the terms of settlement is proposed to abate on the day on which such order was passed; v Settlement Commission non approachable by a person related to person who has already availed the benefit of Settlement Commission. Related person means: Assessee who has availed benefit of settlement commission Related Person Individual A company where such individual holds > 50% of shares or voting power at any time; A firm/AOP/BOI where such individual is entitled to > 50% of profits at any time; An HUF where such person is a Karta Company A individual who holds > 50% of shares or voting power at any time; Firm/AOP/BOI A individual who is entitled to > 50% of profits at any time; HUF Karta of the HUF v Section 132B of the Act is amended to enable the assessee to appropriate the assets seized in a search towards payment of liability arising on application made before the settlement commission. 1.26. Widening the powers under search and seizure v The usage of the phrase ‘belongs to’ in section 153C has called for different interpretation by different courts5 . In order to end such different interpretations and to 5 Refer Kamleshbhai Dharamshibhai Patel v. CIT, SCA No. 13635/2012 dated 24th December, 2012 (Gujarat High Court), Vijaybhai N. Chandrani v. ACIT [2011] 333 ITR 436 (Gujarat High Court).
  16. 16. - DecipheringtheBudgetproposals 16 meet the intended objective, section 153C (1) is re-worded and the phrase ‘relates to’ is used. Such usage also widens the scope of the section. 1.27. Changes in Withholding tax provisions v The benefit of non-deduction of tax under section 194C (6) in case of transporter is limited to small operators only i.e. tax is not deductible only if the transporter is eligible to compute income as per section 44AE of the Act, and who has also furnished a declaration to this effect along with his PAN. v Eligibility period for the benefit of beneficial rate of tax available under section 194LD in respect of external commercial borrowings (ECB) has been extended from 30th June, 2015 to 30th June, 2017. v In order to rationalize the tax computation of employees for the purpose of tax deduction under section 192, the section is amended to cast an obligation on the principal officer/Drawing and disbursement officer to obtain the proofs of the deductions including the set-off losses (under head house property) claimed by the employees in a prescribed form and manner. v A new section 192A is inserted to provide for applicability of withholding tax provisions on the premature withdrawal of the provident fund by EPFO at the rate of 10%. Further, it is also provided that in absence of PAN, tax would be deducted at the maximum marginal rate and accordingly ensures recovery from the employee who may be falling under higher slabs. v There has been a controversy regarding the deductibility of tax paid by co-operative societies in business of banking. The cooperative banks generally made their clients their members and hence escaped the withholding provisions. Section 194A has been accordingly amended to carve an exception for the cooperative societies in banking operations and make them liable to deduct taxes. v Further, income credited by way interest on the compensation amount awarded by the Motor Accidents Claims Tribunal is exempted from deduction of tax under section 194A without any limit, against the earlier limit of 50,000.
  17. 17. - DecipheringtheBudgetproposals 17 v Section 197A (1C) is amended to provide relief in respect of deduction envisaged under section 192A (deduction by EPFO) and 194DA (payments in respect of life insurance policies) to the senior citizens subject to the submission of form 15H. v Sec.200A provides for processing of TDS statements for determining the amount payable or refundable to the deductor, however, it do not provide for the manner of determination of late fee under section 234E at the time of processing of TDS return. Section 200A of the Act is proposed to be amended to enable computation of such late fee. v To reduce the compliance burden on the assessee who is required to deduct taxes under section 194-IA while transfer of immovable property, section 203A of the Act is amended to provide that the requirement of obtaining and quoting of TAN shall not apply to notified deductors and collector. v A new section 206CB is inserted to provide for a procedure for processing of TCS statements or a correction statement made under section 206C of the Act. Section 154 of the Act is also amended to enable the income-tax authority to amend the intimation issued under section 206CB to rectify any mistake apparent from record. v Further, Section 156 is also amended to provide that intimation of sum payable under section 206CB (1) shall be deemed to be a notice of demand for the purposes of section 156. Consequentially, a new section 220 (2C) is inserted to avoid levy of interest under section 220 (2) as interest for the delay in collection of tax at source is already levied under section 206C (7) in the intimation issued under section 206CB. 1.28. Measures for reducing litigation and clearing backlog v Section 158AA is inserted enabling the tax authorities to file an application as against an appeal before ITAT stating that an identical question is pending before the Supreme Court and thus, appeal will be filed only when the decision of the Supreme Court is pronounced, in cases where an acceptance regarding pendency of identical question of law is received by the taxpayer. However, appeal to ITAT is proposed to be filed where (1) no acceptance is receiver (2) order of Commissioner (A) is not in conformity with the decision of Supreme Court.
  18. 18. - DecipheringtheBudgetproposals 18 v The proposed step of the Central Government will help in avoiding duplication of appeal on identical question also in line with, the existing mechanism (Section 158A) and the initiative taken by the Supreme Court.6 1.29. Pass through status for Venture Capital Funds (‘VCF’) and Venture Capital Companies (‘VCC’) v Section 115U of the Act provides for pass through tax regime for venture capital funds (VCF), venture capital companies (VCC); however, the said regime is different from the proposed regime for INVITs. The said existing regime is proposed to be continued to apply to them which had been registered under SEBI (VCF) Regulations, 1996. Further, it is clarified that the remaining VCF/VCC, being part of Category-I Alternative Investment Funds shall not be subject to the existing provisions of Section 115U of the Act, but will mandatorily have to follow the new regime i.e. 115UB. 1.30. Rationalization of MAT provisions v There has been a lot of controversy7 regarding the taxability of the share of profit from an AOP received by a company under section 115JB where company has book profits but does not have taxable profits. Section 115JB is amended to provide that where the income of a company from its share in an AOP or a BOI is exempt, then such income and its corresponding expenditure will not be taken into consideration for the purpose of calculation of book profits under MAT. Section 115JB is further amended to provide that capital gains8 arising from sale of securities by Foreign Institutional Investors and its corresponding expenditure will not be taken into consideration while calculating book profits under MAT. 1.31. Exempt Incomes 6 It was in the news that the Supreme Court has constituted a Special Bench to hear taxation cases from 9th March, 2015 in an attempt to deal with a backlog of more than 10,000 cases, http://www.livemint.com/Politics/o1CE12NRGJBYSxFTkMmuJI/Supreme-Court-sets-up-new-benches-for-tax- criminal-cases.html 7 B. Seenaiah& Co Projects Ltd ITA NO. 433/H/09 (ITAT-Hyderabad) 8 Other than short term capital gains on which securities transaction tax is not chargeable
  19. 19. - DecipheringtheBudgetproposals 19 v Section 10 (23EE) is inserted in the Act to exempt the income of the Core Settlement Guarantee Fund (Fund) arising from contribution received, investment made, penalties imposed by the recognized clearing corporation (Corporation). However, where any amount standing to the credit of the Fund and not charged to income-tax during any previous year is shared, the whole of the amount so shared shall be deemed to be the income of the corporation or the shareholder of such corporation, of the previous year in which such amount is shared. v For making the Prime Minister Swachh Bharta Yojana and Clean Ganga Yojana more successful, Section 10(23C) of the act is amended to exempt any income received on behalf of Swachh Bharat Kosh and Clean Ganga Fund. The contribution to such funds is eligible for 100% deduction under section 80G. Section 80G is further amended to include donations made to National Fund for Control of Drug Abuse for 100% deduction. 1.32. Mandatory Interest under section 234B v Section 234B is proposed to be amended to take into consideration the following scenarios: · Where income has been recomputed on reassessment under section 147 or section 153A the assessee shall be liable for interest at the rate of 1% on the amount of the increase in total income for the period commencing from date of determination of total income under section 143 (1) or on regular assessment and ending on the date of reassessment under section 147 or section 153A from 1st day of April of that assessment year till the date of determination of such liability · Similarly, where an application has been filed with the Settlement Commission, and an additional income is disclosed in the application, the interest is proposed to be charged from the first day of the assessment year till the date of filing of application · Where the income disclosed is enhanced by the order of the Settlement Commission, interest on such enhanced income is to be charged from the first day of the assessment year to which the income relates till the date of determination of such income by the Settlement Commission.
  20. 20. - DecipheringtheBudgetproposals 20 1.33. Penalties The Finance Minister during his budget speech has given a clear indication that India is upgrading as a no tolerance zone for offences like black money, non-compliance with procedural requirement of furnishing information or documents entailing exemption or lower rate of tax. Below is a gist of various amendments proposed in ‘Chapter XXI- Penalties Imposable’ vide Finance Bill, 2015: v Rationalizing definition of ‘tax sought to be evaded’ [Section 271(1)(c)]: The section as it stands today is ambiguous to the extent where ‘tax sought to be evaded’ is to be calculated in the cases where tax is paid under the provisions of section 115JB and 115 JC (MAT & AMT). In past, various courts have taken a view that the penalty cannot be levied on the assessee if the tax is paid under the provisions of MAT/AMT. Therefore, in order to plug this loophole in the legislation, Explanation 4 to section 271(1)(c) is sought to be substituted by another explanation which provides a computation mechanism for the ‘tax sought to be evaded’. The formula takes into consideration both the scenarios viz. where an assessee is paying taxes as per the general provisions and also where the assessee is paying taxes under the provisions of MAT/AMT. v Measures to curb black money [Section 271D/271E]: Section 271D/271E as it stood today provides that no amount of loan or deposit shall be accepted/paid, except otherwise than by an account payee cheque or account payee bank draft, or through electronic transfer through a bank account. The Central Government taking another initiative to curb generation of black money, has amended the sections 269SS and 269T so as to provide that no person shall accept/pay from/to any person any sum of money, whether as advance or otherwise, in relation to transfer of an immovable property (whether or not such transfer takes place) except otherwise than by way of above specified modes. Failure of compliance with the same may attract penalty under section 271D/271E. However, the proposed amendment is not made applicable where both the parties dealing with, are having agricultural income and neither of them is having any income chargeable to tax under the Act.
  21. 21. - DecipheringtheBudgetproposals 21 v Furnishing of statement, information or document by eligible investment fund [Section 271FAB]: The managers taking care of off-shore fund houses were forced to manage their investment activity from outside India due to the fear of adverse tax consequences in respect of income of such fund houses. A new section [section 9A] is inserted whereby the income of the fund houses may not be taxable subject to the fulfillment of conditions mentioned therein. Section 9A (5) casts a liability on such eligible fund houses to furnish statement, information or documents, as required within a period of 90 days from the end of the financial year. In order to ensure that the eligible fund house complies with such reporting requirement, section 271FAB is inserted to provide for penalty of 5 lakhs in case of non-compliance. v Reporting obligation on Indian concern through or in which the Indian assets are held by the foreign company or the entity [Section 271GA]: A new section 285A is inserted casting a responsibility on the Indian entity, through or in, which the Indian assets are held by the foreign company or the entity whose value9 is substantially10 derived by the Indian assets. The Indian entity is obligated to furnish, information relating to the transaction having the effect of directly or indirectly modifying the ownership structure or control of the Indian company, or documents as required. Section 271GA is inserted to provide for penalty to the tune of 2% of the value of transaction or INR 500,000, as the case may be, in the event of failure to furnish such information or document by the Indian entity. v Information of cross border payments: [Section 271I]: The person responsible for making cross border payment was required to furnish information as envisaged in Form 15CA and 15CB while making such payments, as per section 195 (6) of the Act. The said sub-section is substituted to provide information relating to payment of any sum (whether or not chargeable to tax) in the prescribed form and manner. In order to ensure correct tax compliance, new section 271I is inserted whereby a penalty of INR 100,000 will be levied in the event of failure to furnish information or furnishing of inaccurate information. 9 Share or interest in a company or entity. 10 As referred in Explanation 5 to Section 9 (1) (i).
  22. 22. - DecipheringtheBudgetproposals 22 v Payment of tax deducted/collected through book entry [272A]: The Government deductors/collectors i.e. Drawing and Disbursing Officer (DDO) are allowed to make payment of tax deducted/collected by them through book entry under the existing mechanism. The DDO, thereafter, intimates such amount to the concerned officer11 who credits the amount to the credit of Central Government through book entry. The Concerned officers were required to furnish detail of payment made through book entry in the prescribed Form 24G. However, the compliance was not effectively done by the concerned officers resulting into delay in furnishing of the TDS/TCS statement by the DDO. There was no specific section in the Act to enforce timely filing of the same. In order to improve the reporting of payment of TDS/TCS made through book entry and to make existing mechanism enforceable, section 200 and 206C of the Act is amended to ensure timely furnishing of information by the concerned officer. Further, to ensure compliance of this proposed obligation of filing statement, Section 272A of the Act is amended so as to provide for a penalty of Rs.100/- for each day of default during which the default continues subject to the limit of the amount deductible or collectible in respect of which the statement is to be furnished. Indirect tax proposals 2. Service Tax Amendment in the Finance Act, 1994 The following key changes will be effective from the date of enactment of Finance Bill 2015 2.1. Change in Service Tax rates v The effective service tax rate is proposed to increase from 12.36% to 14%. The ‘Education Cess (EC)’ and ‘Secondary and Higher Education Cess (SHEC)’ shall be subsumed in the new service tax rate. 2.2. Review of the Negative List 11 Pay and Accounts Officer (PAO) or Treasury Officer (TO) or Cheque Drawing and Disbursing Officer (CDDO), as the case may be.
  23. 23. - DecipheringtheBudgetproposals 23 v Service tax to be levied on the service provided by way of access to amusement facility such as rides, bowling alleys, amusement arcades, water parks, theme parks, etc. v 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. Service by way of admission to exhibition of the cinematographic film, circus, dance, or theatrical performances including drama, ballets or recognized sporting events shall continue to be exempt. v Service tax to be levied on service provided by way of carrying out any processes as job work for production or manufacture of alcoholic liquor for human consumption. v An enabling provision is being made to exclude all services provided by the Government or local authority to a business entity from the Negative List. Once this amendment is given effect to, all service provided by the Government to business entities, unless specifically exempt, shall become taxable. 2.3. Other Amendment v A definition of the term “government” is being incorporated in the Act to resolve interpretational issues as regards the scope of this term in the context of the Negative List and service tax exemptions. v The definition of term “service” is proposed to be amended to specifically state the intention of legislature to levy service tax on: · chit fund foremen by way of conducting a chit; and · distributor or selling agent of lottery, as appointed or authorized by the organizing state for promoting, marketing, distributing, selling, or assisting the state in any other way for organizing and conducting a lottery. v It is being specifically prescribed in the Act that value of a taxable service shall include any reimbursable cost or expenditure incurred and charged by the service provider to make legal position clear and avoid disputes. v Classification of input services used for providing output services has been clarified by inserting an illustration under the Section 66F (1) of the Act. v Penalty provisions has been rationalized
  24. 24. - DecipheringtheBudgetproposals 24 Particular Non-Evasion Cases (Section 76) Evasion Cases (Section 78) Normal Penalty Upto 10% of Service Tax 100% of Service Tax Service and Interest paid within 30 days of issuance of SCN No Penalty 15% provided such reduced penalty is also paid Service, Interest and reduced penalty paid within 30 days of Order 25% of the penalty imposed by the officer in the order 25% of the Service Tax amount determined by the officer in the order v Section 80 providing non levy of penalty in case of reasonable cause has been omitted. v Requirement for issuing SCN has been removed in cases where the assesse has self- declared short payment or non-payment in the periodical return. The Central Government can directly initiate tax recovery proceedings in such case as per procedure prescribed Review of Mega Exemptions (Notification 25/2012-ST) The following key changes will be effective from 01 April 2015 2.4. Exemption Withdrawn v Exemption is withdrawn on the services provided to Government by way construction, erection, repair of ,- · civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession; · a structure meant predominantly for use as (i) an educational, (ii) a clinical, or (iii) an art or cultural establishment · residential complex predominantly meant for self-use or the use of their employees or other persons specified in the Explanation 1 to clause 44 of section 65 B of the said Act; v Exemption to construction, erection, commissioning or installation of original works pertaining to an airport or port is being withdrawn. v Exemptions are being withdrawn on the following services:
  25. 25. - DecipheringtheBudgetproposals 25 · services provided by a mutual fund agent to a mutual fund or assets management company; · distributor to a mutual fund or AMC; and · selling or marketing agent of lottery ticket to a distributor of lottery. v Exemption is being withdrawn on the following services,- · Departmentally run public telephone · Guaranteed public telephone operating only local calls · Service by way of making telephone calls from free telephone at airport and hospital where no bill is issued v Existing exemption notification for service provided by a commission agent located outside India to an exporter located in India is rescinded. The said exemption has already built in the law in the previous budget. 2.5. Exemption Modified v 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). v Exemption to transportation of ‘food stuff’ by rail, or vessels or road will be limited to transportation of food grains including rice and pulses, flours, milk and salt only. Transportation of agricultural produce is separately exempt which would continue. 2.6. New Exemptions v Services of pre-conditioning, pre-cooling, ripening, waxing, retail packing, labeling of fruits and vegetables are being exempted. v Life insurance service provided by way of Varishtha Pension BimaYojna is being exempted. v 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. v All ambulance services provided to patients are being exempted.
  26. 26. - DecipheringtheBudgetproposals 26 v Service provided by way of admission to a museum, zoo, national park, wild life sanctuary and a tiger reserve is being exempted. v Service provided by a Common Effluent Treatment Plant operator for treatment of effluent is being exempted. 2.7. Rationalization of abatement (Notification No 26/2012-ST) The following key changes will be effective from 01 April 2015 v A uniform abatement is being prescribed for transport by rail, road and vessel to bring parity in these sectors. Service Tax shall be payable on 30% of the value of such service subject to a uniform condition of non-availment of Cenvat Credit on inputs, capital goods and input services. Presently, tax is payable on 30% of the value in case of rail transport, 25% in case of road transport and 40% in case of transport by vessels. v The abatement for executive (business/first class) air travel, wherein the service element is higher, is being reduced from 60% to 40%. Consequently, service tax would be payable on 60% of the value of fare for business class. v Abatement is being withdrawn on chit fund service. 2.8. Service Tax Rules (Effective from 01 April 2015) The following key changes will be effective from 01 April 2015 v In respect of any service provided under aggregator model, the aggregator is being made liable to pay service tax if the service is provided using the brand name of aggregator in any manner. v Consequent to the upward revision in Service Tax rate, the composition rate on specified services, namely, life insurance service, services of air travel agent, money changing service provided by banks or authorized dealers, and service provided by lottery distributor and selling agent, is proposed to be revised proportionately. v Rule 6 (6A) which provided for recovery of service tax self-assessed and declared in the return under section 87 is being omitted consequent to amendment in section 73 for enabling such recovery.
  27. 27. - DecipheringtheBudgetproposals 27 v Service tax registration process has been liberalised. Single premise registration to be granted within 2 days of filing application subject to post grant review of documents v Provision to allow authentication of service invoice by means of digital signatures 2.9. Reverse charge mechanism (Effective from 01 April 2015) The following key changes will be effective from 01 April 2015 v 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. v Services provided by mutual fund agents, mutual fund distributors and lottery agents are being brought to under reverse charge consequent to withdrawal of exemption on such services. 2.10. The Cenvat Credit Rules, 2004 (w.e.f. 01.03.2015) The following key changes will be effective from 01 April 2015 v Cenvat credit on receipt of input services, which are taxable under the partial reverse charge mechanism, to be allowed when the Service tax is paid by the service recipient and condition of payment of consideration to service provider for taking credit removed. v The period for taking Cenvat Credit is being extended from six months to one year from the date of invoice. v The term ‘Export Good’ for the purpose of Rule 5 is defined in the Credit rules. v Time limit for return of capital goods from job worker increased from 6 months to 2 years v “Non-excisable goods” to be considered “exempted goods” for the purpose of Cenvat credit availability / reversal under Rule 6 v Provisions of Section 11A of the Excise Act and Section 73 of the Finance Act, 1994 related to recovery of unpaid tax is now applicable in case of Cenvat credit is taken wrongly but not utilized. However, no provision for levy of interest in such cases
  28. 28. - DecipheringtheBudgetproposals 28 2.11. Swachh Bharat Cess v An enabling provision is being made to empower the Central Government to impose a Swachh Bharat Cess on all or certain taxable services at a rate of 2% on the value of such taxable services. The proceeds from this Cess would be utilized for Swachh Bharat initiatives. This Cess will be effective from a date to be notified. 3. Excise Duty 3.1. The following key changes will be effective from 01 March 2015 v Standard ad-valorem rate of Excise duty increased from 12% to 12.5% v Education cess and secondary and higher education cess exempt on all excisable goods. However, Customs Education Cesses will continue to be levied on imported goods. 3.2. Valuation v All goods falling under Chapter sub-heading 2101 20, including iced tea, are being notified under section 4A of the Central Excise Act for the purpose of assessment of Central Excise duty with reference to the Retail Sale Price with an abatement of 30%. Such goods are also being included in the Third Schedule to the Central Excise Act, 1944. v Goods, such as lemonade and other beverages, are being notified under section 4A of the Central Excise Act for the purpose of assessment of Central Excise duty with reference to the Retail Sale Price with an abatement of 35%. Such goods are also being included in the Third Schedule to the Central Excise Act, 1944. v The excise duty rates in case of certain goods have been amended. v Full exemption from excise duty is being extended to captivelyconsumed intermediate compound coming into existence during the manufacture of Agarbattis. Agarbattis attract Nil excise duty. v The scheme of Advance Ruling has been extended to 'resident firm'. 'Firm' shall have the meaning assigned to it in section 4 of the Indian Partnership Act and includes LLP, Proprietorship and one person company
  29. 29. - DecipheringtheBudgetproposals 29 3.3. Compliance Simplification: v Registration process in Central excise simplified to ensure that registration is granted within two working days of the receipt of a duly completed application form. Detailed procedure issued by CBEC. v Central Excise/Service Tax assessees are being allowed to maintain other records and issue digitally signed invoices electronically. Detailed guideline to be issued by CG. v Facility of direct dispatch of goods by registered, dealer from seller to customer’s premises is being provided. Similar facility is also being allowed in respect of job- workers. Registered importer can also send goods directly to customer from the port of importation. 3.4. Changes effective from date to enactment of Finance Bill 2015 v The provision relating to determination of relevant date has been amended to include situation of cases where a return is not filed on the due date and where only interest is required to be recovered. v Requirement for issuing SCN has been removed in cases where the assesse has self- declared short payment or non-payment in the periodical return. The Central Government can directly initiate tax recovery proceedings in such case as per procedure prescribed v Penalty provisions in Customs, Central Excise & Service Tax are being rationalized to encourage compliance and early dispute resolution. << This space is left blank intentionally>>
  30. 30. - DecipheringtheBudgetproposals 30 About TAG Advisors TAG Advisors (‘TAG’ or ‘We’) works with both individuals and corporate to assist them in taxation and regulatory matters. TAG provides taxation advisory, litigation support, management services including audit and regulatory services to a large variety of clients of different sectors. We have been in the trade long enough to acquire a thorough understanding of the challenges individuals and corporate face while dealing with Indian Tax Laws. We provide quality service and add tangible value to clients by blending practical business advice with tax and regulatory inputs. We work to ensure that the needs of our clients come first. We view our clients as partners and work collaboratively with them to achieve results they can measure. • Managed by team of highly motivated young professionals with high integrity • Finding out the best possible solution for clients by applying problem solving attitude • Application of modern project management techniques to ensure on-target delivery • Single window services to cater all the needs of the clients • Emphasize on quality more than quantity • Experience in catering to the clients in various industries such as Aviation, Aerospace & Defense, Automotive and allied component, Education, Retail, Consumer Durables, FMCG, Construction, Telecom, Hospitality, EPC, Real estate, Pharmaceuticals, Healthcare, Oil & Natural Gas, Technology etc. Services we offer • International Tax: Assisting clients in addressing cross-border tax challenges with respect to investment and transaction structuring, use of tax treaty networks, planning strategies to achieve and implement sound tax policies. • Transfer Pricing: Advising clients on applicability of transfer pricing provisions, preparation of transfer pricing studies, undertaking benchmarking study and related compliances. • Foreign Account Tax Compliance Act (FATCA): Advising client on applicability of FATCA, preparation of due diligence report ensuring compliance with Income Tax provisions, RBI guidelines and SEBI guidelines. • Corporate Tax: Advising clients in structuring or restructuring of business resulting in high operational performance and legal protection whilst ensuring optimum tax payout.
  31. 31. - DecipheringtheBudgetproposals 31 • Indirect Tax: Advising clients on classification of goods and services and related tax implications, excisability of goods, business structuring to avail concessions, benefits, subsidies, exemptions and credits. • Tax Dispute Resolution: Representing clients before revenue authorities including Tribunals (ITAT/CESTAT), High Court and Supreme Court; • Tax Diagnostic Review: Audit of compliance requirements from perspective of different tax laws to ensure correct availment of concessions, benefits, subsidies, exemptions and credits. • Departmental Audit Support: We assist clients during the audit/investigation conducted by the tax authorities in both direct and indirect tax related matters. • Tax Compliances: Assistance in obtaining registration, filing of returns, certification for foreign remittances, processing of refunds under tax laws including state tax laws, etc. • Management Services: Assisting clients in accounting including book keeping, accounts management, project financing, etc. • Valuation: Preparation of share valuation report, undertaking of patents, copyrights, intellectual property valuations. • RBI and FEMA: Advisory and compliance services encompassing the entire gamut of foreign exchange laws. Areas of Practice International Tax Transfer Pricing FATCA Corporate Tax RBI and FEMA Foreign Trade Policy Special Economic Zone Central Excise and State Excise Customs Service Tax Cenvat Credit Value Added Tax (VAT)/Sales Tax Entry Tax/Octoroi
  32. 32. DecipheringtheBudgetproposals 32 Our Clients We have the privilege of working with the well-known native & global companies. Our clients engage us in a number of ways. We together as a team have provided exceptional professional services to various clients, few amongst them are: << This space is left blank intentionally>> Punj Lloyd Ltd. HLS Asia Ltd. LIC of India Daffodil Software Limited Daiichi N Horizon Auto Comp Private Ltd. H.I.S. Travel India Private Limited AFOOZO Private Limited
  33. 33. DecipheringtheBudgetproposals 33 Key team members Ashish Karundia Founding Partner, TAG Advisors Tax Professional and FATCA consultant Phone: +91 999 922 2349 e-connect: akkarundia.ca@gmail.com Ashish Karundia is a member of the Institute of Chartered Accountant of India with extensive experience in taxation. He specializes in area of international tax, corporate tax and Value Added Tax (VAT). He has been associated with a leading law firm, Lakshmikumaran & Sridharan in past where he has advised clients on complex issues of treaty interpretation such as permanent establishment, secondment of employees, royalty, fees for technical/included services etc. From VAT and entry tax perspective, he has advised clients on classification, interstate movement of goods, undertaken tax due diligence. He is also an expert in dealing with Foreign Account Tax Compliance Act (FATCA), a United States based reporting requirement. He has written several articles for highlighting tax controversies/ambiguities prevalent in the industry. His articles has been highly appreciated by the members of industry and sometimes referred into the judgment of the courts/tribunals. His contributions are rated among the top 5 read articles in Taxsutra. He is an eminent member of Tax Treaty Group headed by Ned Shelton which addresses treaty issues arising worldwide. Education and professional affiliations § Gold Medalist, B. Com., Gorakhpur University. § Rank Holder, Member of Institute of Chartered Accountants of India.
  34. 34. DecipheringtheBudgetproposals 34 Gaurav Goel Founding Partner, TAG Advisors Tax Professional Phone: +91 999 998 7718, +91 981 838 5185 e-connect: cagauravgoel@hotmail.com Gaurav Goel is a member of the Institute of Chartered Accountant of India with extensive experience in direct tax, transfer pricing and regulatory matters. He has been associated with tier 1 tax firms such as Ernst & Young and Deloitte Haskins & Sells in past where he has advised his clients on various domestic and international taxation matters such as inbound/outbound structuring, analysis of intermediary jurisdictions, modes of investment, forms of presence, tax efficient structuring of transactions etc. He has hands on experience in handling transfer pricing assignments for his domestic and international clients. He has also assisted clients in their corporate tax litigation before HC and ITAT and specialized assignments such as Special Audits under Income tax Act, Block assessments in the case of search proceedings etc. He has been awarded the prestigious ‘Tax Ninja’ award by Ernst & Young for showcasing his excellence and strength in taxation and allied matters. He is a prolific speaker and has delivered seminars on interpretation of treaties, transfer pricing etc. at various professional forums. He has serviced clients in various industries such as auto components, consumer electronics, pharmaceuticals, aerospace and defence, logistics, real estate, hospitality, IT/ITeS etc. Education and professional affiliations § Economics (H), Delhi University. § Member of Institute of Chartered Accountants of India.
  35. 35. DecipheringtheBudgetproposals 35 Vishal Tayal Founding Partner, TAG Advisors Tax Professional Phone: +91 989 912 2879 e-connect: cavishal.tayal@gmail.com Vishal Tayal is a member of the Institute of the Chartered Accountants of India practicing in the field of Indirect Taxes. He is a thorough professional having hand on experience in the field of indirect taxes with special focus on service tax and Special Economic Zone (SEZ) related matters. He had also been associated with the indirect tax vertical of globally renowned consulting firm viz. Ernst & Young, LLP. He is a prolific speaker and has delivered several trainings to various corporate on service tax related issues. He has been awarded with quality education and awareness award at 2002 World Quality Congress. He has serviced several multinational clients across industries such as telecom, media, information technology, construction, hospitality, tour & travel etc. Education and professional affiliations § B.com (H), Delhi University. § Member of Institute of Chartered Accountants of India. Get in touch DelhiOffice Ø 18/2822, Ist Floor, Beadon Pura, Ajmal Khan Road, Karol Bagh, New Delhi- 110 005 Ø Board line: +91-11-4509-5465.