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I-T Act amendment to prohibit cash payment of Rs 20 k
The Income-Tax Act will be amended to prohibit acceptance or payment of an advance of Rs 20,000 or more in cash for purchase of immovable property. Quoting of PAN is being made mandatory for any purchase or sale exceeding the value of Rs 1 lakh. Provisions will also be made to tackle splitting of reportable transactions.


Read our full coverage on Union Budget Capital gains regime for REITs to be rationalised
To release funds locked up in various completed construction projects, the government will rationalise the capital gains regime for the sponsors exiting at the time of listing of the units of Real Estate Investment Trusts (REITs) and Infrastructure Investments Trusts (InvITs), subject to payment of securities transaction tax.

Limit on deduction for contribution to pension increased
The government is to increase the limit on deduction on account of contribution to a pension fund and the New Pension Scheme from Rs 1 lakh to Rs 1.5 lakh. To provide a social safety net to individuals, an additional deduction of Rs 50,000 is to be provided for contribution to the scheme under Section 80CCD.

Focus on growth to through domestic manufacturing
Tax 'pass through' is to be allowed to category-I and category-II Alternative Investment Funds, so that tax is levied on the investors in these funds and not on the funds per se. This will enable these funds to mobilise more resources and invest more in small and medium enterprises, infrastructure and social projects, and start-ups.

Central excise duty to be rounded off to 12.5%
As part of the movement towards GST, education cess and the secondary and higher education cess will be subsumed in Central excise duty, which will lead to rounding off the general rate of Central excise of 12.36 per cent, including the cesses, to 12.5 per cent. The specific rates of Central excise in certain commodities will be revised.

Applicability of GAAR to be deferred by two years
The applicability of GAAR is to be deferred by two years. Further, when implemented, GAAR will apply prospectively to investments made on or after April 1, 2017. This has been done on the ground that investment sentiment has now turned positive and the momentum needs to be accelerated, and also because contentious issues need resolving.

Tax on royalty and fees for technical services to be cut
To facilitate technology inflows to small businesses at low costs, the rate of income tax on royalty and fees for technical services is to be reduced from 25 per cent to 10 per cent, in view of the large number of young entrepreneurs running business ventures or wanting to start new ones.

Wealth tax replaced by surcharge on the super-rich
The government will abolish the wealth tax and replace it with an additional surcharge of two per cent on the super-rich with a taxable income of over Rs 1 crore, in the expectation that this will lead to tax simplification and enable the income tax department to focus on widening the tax base. The net gain is expected to be some Rs 9,000 crore.

Tax deduction for health insurance premium increased
The tax-deductible limit for health insurance premium has been increased from Rs 15,000 to Rs 25,000. For senior citizens the limit has been increased to Rs 30,000, from Rs 20,000. For very senior citizens aged 80 years or more and not covered by health insurance, a deduction of Rs 30,000 towards expenditure incurred on their treatment will be allowed.

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First Published: Sun, March 01 2015. 00:02 IST