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    Hello and welcome to the chat with Ashish Gupta, Partner - taxation, KPMG in India on Budget & Taxes

  • M


    Although the budget has proposed to extend healthcare benefits to the masses with a new insurance scheme. It has proposed to reduce the deduction to 150 per cent from 200 per cent on research expenses and further lower to 100 per cent from 2020. What could possibly be the impact of this?


    While a reduction has been proposed to the R&D benefits, in line with the CBDT's phase out plan, there are certain potential counterbalancing proposals for lower taxation of patents registered and developed in India to boost the indegenious R&D activities including the pharma research.

  • K


    Do you envisage increase in service tax in the next Budget or much before as and when the GST Bill is cleared?


    No clear indication is coming from the current budget and the FM speech with respect to increase in rate of service tax except for levy of Krishi Kalyan cess of 0.5%.

  • L


    The fiscal deficit for FY17 is pegged at 3.5%. However, in case crude oil prices scale up 20-30% from current levels by the end of the current calendar year, do you think the target may be tough to achieve?


    It is too early to comment and definitely FM would have factored any increase in oil prices while pegging fiscal deficit at 3.5%

  • P


    EPF, PPF withdrawls at maturity to be taxed. Have the existing PPF accounts also been included in the fine print?


    Please note that the PPF withdrawals have not been impacted by this budget and therefore the said withdrawals continue to be tax exempt.

  • P


    The government today offered one-time settlement of cases after retrospective amendment of tax laws, by asking companies to pay the basic tax demand. What is your view on this tax reform?


    The proposed dispute resolution scheme seems to have a dual purpose of reducing litigation and bolstering tax collections expeditiously. It may be beneficial in cases where two views are possible and the tax payer would prefer buying peace of mind than continuing with the protracted litigation.

  • J


    What do you think is the impact of the taxation on EPF withdrawls?


    The changes would not impact any amount accumulated to the EPF account till 31st March 2016, however, any accumulations arising out of contributions made on or after 1st April 2016 may be taxable at the time of withdrawal to the extent of 60% of the accumulated amount subject to provisions of Rule 8 of fourth schedule of Income tax act, 1961

  • R


    Has there been any change in individual tax rates? If no, why?


    No there have been no changes to the individual tax rates except for increase of surcharge from 12% to 15% in case of individuals having income exceeding INR 1 Crore.

  • J


    Hello Mr. Gupta, Does the tax (newly imposed on withdrawl from EPF) apply to PPF and Kanya Samridhi withdrawls as well? If yes, If someone's PPFmatures, does he still have to pay tax OR does it apply to partial withdrawls only? Thanks, Jasmeet


    Dear Jasmeet, the current amendments do not impact the provisions governing PPF or Sukanya Samridhi Account, therefore, as was the situation earlier, there would be no tax implications at the time of withdrawal from the said accounts.

  • A


    Are there any areas, in your opinion, where the Budget could have done more as regards taxation?


    There were lot of wishes/ expectation from the individuals and industry from the budget like increase in the minimum exemption limit, deduction in respect of existing home loans etc. and clear roadmap on GST, clear guidelines on foreign tax credit rules etc. Therefore it is difficult to say where all budget could have done more. All we can say is that the budget has brought out many amendments to rationalise tax compliances and reduce litigation.

  • T


    The Budget has proposed 10% tax on dividends exceeding Rs 10 lakh in the next financial year. What is your call on this?


    This is a provision made applicable to individuals, firms , HUF earning high dividend income, who are resident in India to create equity by recovering additional 10% in addition to DDT paid by the company declaring dividend.

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