1. Time period and turnover limit increased to claim 100% exemption for start-ups
2. TDS rate on technical services reduced
3. Introduction of TDS on E-commerce transactions
4. Tightening of residency provisions
5. Dividend distribution tax in the hands of recipient
6. Introduction of Taxpayer’s Charter
Taxable Income up to Rs. 5 lacs made tax free. Standard deduction limit raised to Rs. 50,000. Annual value of the second self occupied house to be taken as Nil. TDS limit on rent increased from Rs. 180,000 to Rs. 240,000. Capital gain exemption extended to purchase of second residential house as well.
Concessional corporate tax of 25% extended to companies whose annual turnover is up to Rs. 250 crore. Dividend Distribution Tax to be applicable on Deemed Dividend. Standard deduction of Rs. 40,000 introduced against salary income. Definition of “business connection” widened. Surcharge increased by 1%.
Corporate tax for domestic companies having turnover up to INR 50 crore has been reduced from 30% to 25%. Period for claiming deduction for start up increased.Provision of “Secondary Adjustment” introduced in Transfer Pricing. Interest deduction restricted to 30% of EBIDTA. Limit of cash expenses reduced to half. Limit of receipt in cash restricted with penal provisions. Rationalisation of provisions of Section 10AA.
Rate of corporate tax has been reduced to 29% for small businesses having turnover of less than Rs. 5 Cr. Clarification on concessional rate of 10% on the Long term capital gain on Unlisted Securities. Increase in threshold limit for presumptive taxation from Rs. 1 crore to Rs. 2 crore. Professionals included in Presumptive Taxation Scheme.
Increase in service tax rate through a new levy in the name of “Krishi Kalyan Cess” by 0.5%. Indirect tax Dispute Resolution Scheme, 2016 introduced. Monetary limit for launching prosecution increased from Rs. 50 lacs to Rs. 2 crore. The limitation period has been increased from 18 months to 30 months for issuance of demand notices.