Amendments effective from A.Y. 2013-14 i.e. with effect from F.Y.

2012-13 unless stated otherwise Direct Tax Proposals

Corporate Taxation Direct Tax Code (DTC) Bill is deferred, phase wise implementation introduced. No change in corporate tax rate.

Removal of cascading effect of DDT In case any company receives, during the year, any dividend from any subsidiary and such subsidiary has paid DDT as paid on such dividend, then, dividend distributed by the holding company in the same year, to that extent, shall not be subject to DDT u/s 115-O (w.e.f. 1st July 2012)

Lower rate of tax on dividend received from foreign companies As per section 115BBD dividend income received from foreign subsidiary company shall be taxable @ 15% on the gross dividend. No expenditure in respect of such dividends shall be allowed under the Act. It is extended for 1(one) more year till AY 2013-14.

Extension of sunset clause for tax holiday for power sector Sunset clause for undertakings set up for the generation, distribution of power is extended for a further period of one year, i.e., up to 31 st March 2013.

Extending benefit of initial depreciation to power sector Benefit extended to power sector for initial depreciation of 20% (in addition to normal depreciation of 15%) for new plant & machinery acquired and installed during the previous year.

International Transactions To nullify the effect of Supreme Court decision in case of Vodafone the definition of Assets, Income deemed to accrue in India, transfer etc amended retrospectively w.e.f. 1st April 1962. Definition of Royalty amended to include consideration for use or right to use of computer software, transmission by satellite as royalty. Tax Residency Certificate (TRC) made compulsory

Transfer Pricing Advance Pricing Agreement (APA) introduced w.e.f. 1 July 2012. The Key feature are : o Board empowered to enter with any person undertaking an international transaction

o The Arms Length Price (ALP) may be determined under any method. o Validity of APA up to 5 years o APA to be legally binding on the tax payer and Income tax authority. o APA to be void in case of fraud or misrepresentation. General Anti Avoidance Regulations (GAAR) introduced o Measures proposed to deter the generation and use of unaccounted money o Assessments can be reopened for a period of 16 years Following transactions included under purview of transfer pricing regulation. o Specified domestic transactions with Associate Enterprises (AE) o Transaction of business restructuring or reorganization entered with AE o Purchase, sale, lease and use of intangible property, such as marketing intangibles. TPO is authorized to ascertain ALP of transaction even if the same was not referred to him by the assessing officer.

Tax incentives for funding of certain infrastructure sectors U/s 115A, interest paid on borrowings made in foreign currency (ECB) between 1 st July 2012 to 1st July 2015) to a non-resident by a company engaged in the business of construction of road, port, generation-distribution-transmission of power shall be subject to tax deduction @5% instead of 20% earlier provided. (w.e.f. 1 st July 2012)

Share premium in excess of fair market value considered as income A private company receives from any resident person, any consideration for issue of shares, if the consideration received for issue of shares exceeds the face value of such shares, the aggregate consideration received for such shares as exceeds the fair market value of the shares shall be chargeable to income tax u/s 56(2) under the head Income from other sources.

Weighted deduction for scientific research & development Weighted deduction of 200 per cent of expenditure incurred for approved in house research and development facilities is extended for 5(five) more years till AY 2017-18. [35(2AB)]

Investment linked deduction in respect of specified businesses Weighted deduction of 150% of capital expenditure (other than land, goodwill and financial instruments) incurred wholly and exclusively for specified businesses including building & operating new hospital with at least 100 beds for patients.

Extension of time limit for completion of assessments/tax audits/processing of returns Time limit for furnishing tax audit report is extended to 30th November for entities undertaking international transactions. (w.e.f. AY 2012-13) Time limit for completion of assessment u/s 143(3)/92CA is extended up to 36 months (earlier 33 months) from the end of assessment year. Processing of return u/s 143(1) is not necessary in refund cases where notice u/s 143(2) for scrutiny is issued by department. (w.e.f. 1st July 2012)

Interest u/s 234D Interest charged u/s 234D on refunds granted is now made applicable to any proceedings which is completed on or after 01.06.2003 irrespective of the assessment year to which it pertains. Earlier it was interpreted that it is applicable for AY 2004-05 onwards.

Minimum Alternate Tax (MAT) MAT is now made applicable to a company which is required to prepare P/L account in accordance with other regulatory Acts other than Companies Act, 1956.

Alternate Minimum Tax (AMT) on all persons other than companies Alternate Minimum Tax (in line with MAT for companies) is now applicable for all forms of business organizations such as partnership firms, sole proprietorship, association of persons etc.

Amendments relating to TDS / TCS Provisions Transfer of immovable property (other than agriculture land) by a non resident is subject to tax deduction @ 1%. Transferee is exempted from obtaining TAN and furnishing TDS statement as this would be mostly one time transaction. (w.e.f. 1st October 2012) Remuneration paid to directors, which is not in the nature of salary, is subject to tax deduction @10% u/s 194J. (w.e.f. 1st July 2012) Thresh hold for TDS on payment of interest on debenture is increased to Rs. 5000/-. (w.e.f. 1st July 2012) TCS now applicable on purchase of coal, lignite and iron ore @ 1%. (w.e.f. 1st July 2012)

Reduction in the rate of STT STT rate is reduced by 20% on cash delivery transactions. Applicable rate will be 0.1%. (w.e.f. 1st July 2012)

Wealth Tax Thresh hold limit of gross salary increased from Rs. 5 lacs to Rs. 10 lacs for levying wealth tax on valuation of residential accommodation provided to an employee / officer / whole time director by the employer.

Personal Taxation Tax Rate

Existing Income (Rs.) 0-1,80,000 1,80,001- 5,00,000 5,00,001- 8,00,000 8,00,001 & above Rate (%) Nil 10 20 30 Proposed Income (Rs.) 0-2,00,000 ** 2,00,001- 5,00,000 5,00,001- 10,00,000 10,00,001 & above Rate (%) Nil 10 20 30

Education cess of 3% is leviable on the amount of income tax. **The exemption limit of Rs. 2,50,000 in case of resident individuals of the age of 60 years or more at any time during the financial year and Rs. 5,00,000/- for very senior citizen category of assessees of the age of 80 years or more at any time during the financial year.

Senior citizens not having income from business are exempted from payment of advance tax. For the purpose of section 80D, 80DDB and 197A, the effective age for senior citizens is reduced to 60 years. Exemption from capital gains tax on sale of residential property, if sale consideration is used for subscription in equity of a manufacturing SME for purchase of new plant & machinery. Additional deduction up to Rs. 5000/- for preventive health check up u/s 80D is introduced. New section 80TTA is introduced for deduction up to Rs. 10000/- for interest on deposits (not being time deposits) received from savings account. Presumptive tax u/s 44AD on income @ 8% of total turnover or gross receipts is not applicable for professions mentioned u/s 44AA, income in the nature of commission or brokerage income or agency business. (w.e.f. AY 2011-12) Cash donations in excess of Rs. 10,000/- is not permitted Life insurance premium paid in a year in excess of 10% of sum assured is not eligible for deduction u/s 80C Sum received under life insurance policy is not exempted u/s 10(10D), if premium paid in a year is in excess of 10% of sum assured. (applicable for policies issued on or after 01.04.2012) Mandatory filing of return for every resident having any assets (including financial interest in any entity) located outside India. (w.e.f. AY 2012-13)

Indirect Tax Proposals

GST to be operational from August 2012 GST approved by the State Govts. Excise Duty increased from 10% to 12% with 30% Abatement Cement has come under MRP based assessment Service tax increased from 10% to 12% Scope of service tax widened Common registration and return form for Excise & Service Tax Common Tax Code for Service Tax & Excise Exemption of basic Customs Duty for Coal

Excise Duty applicable to Cement & Clinker, with effect from 17.03.2012
Sl N o 1 Cement Clinker Types of Clearances Name of Final Product Tariff Rate (Rs) 450/- PMT Excise Duty Pre - Budget (Till 16.03.2011) 10% Adv. + Rs.200/- PMT Excise Duty Post - Budget (From 17.03.2012) 12% Adv. + 2% + 1% Cess Relevant Excise Notification No. & Date 12/2012-CE dated 17.03.2012

Clinker

Trade Retail Sale M.R.P. below Rs. 190/- per bag

Cement OPC / PPC Cement OPC / PPC

900/- PMT

10% Adv. + Rs. 80/- PMT + 2% + 1% Cess

12% on M.R.P. with 30% Abatement + Specific Rate of Duty @ Rs. 120 PMT + 2% + 1% Cess 12/2012-CE dated 17.03.2012

Trade Retail Sale M.R.P. above Rs. 190/- per bag

900/- PMT

10% Adv. + Rs. 160/- PMT + 2% + 1% Cess

Supply of Bulk / Loose Cement

Cement OPC / PPC

900/- PMT

10% Ad-valorem + 2% + 1% Cess

12% Adv. + 2% + 1% Cess

12/2012-CE dated 17.03.2012