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Budget's impact on Nifty 50 companies: EY analysis

MAT carry forward upped to 15 yrs, extension of 5% withholding tax among the Budget's announcements

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Last Updated : Feb 01 2017 | 7:54 PM IST

With Minimum Alternate Tax (MAT) carry forward being upped to 15 years, extension of a concessional five per cent withholding tax for the next three years and other provisions being announced in Budget 2017-18, EY analyses how the Nifty 50 companies have been impacted.

Here is a company-wise analysis of the Budget's impact:

1) Adani Ports and Special Economic Zone Ltd

Concessional withholding tax rate of 5 per cent on interest on ECBs and RDBs extended upto June 2020.

Rationalisation of MAT provisions in line with Ind-AS

MAT credit to be carried forward up to 15 years

Immovable property will now be long term where held for 2 years as against 3 years

Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise

2) Axis Bank Ltd

Concessional withholding tax rate of 5 per cent on interest on ECBs and RDBs extended upto June 2020.

Increase in rate for deduction in respect of provision for bad and doubtful debts from 7.5 per cent to 8.5 per cent of the total income

MAT credit to be carried forward up to 15 years

Rationalisation of MAT provisions in line with Ind-AS

Immovable property will now be long term where held for 2 years as against 3 years

Custom and Excise duty exemption on specified goods for digital payment

3) Bank of Baroda

Concessional withholding tax rate of 5 per cent on interest on ECBs and RDBs extended upto June 2020.

Increase in rate for deduction in respect of provision for bad and doubtful debts from 7.5 per cent to 8.5 per cent of the total income

MAT credit to be carried forward up to 15 years

Rationalisation of MAT provisions in line with Ind-AS

Immovable property will now be long term where held for 2 years as against 3 years

Custom and Excise duty exemption on specified goods for digital payment

4) HCL Technologies Ltd

MAT credit to be carried forward up to 15 years

Rationalisation of MAT provisions in line with Ind-AS

Concessional withholding tax rate of 5 per cent on interest on ECBs and RDBs extended upto June 2020.

Withholding tax rate reduced to 2 per cent from 10 per cent on call centre receipts

MAT paid to the extent of FTC claimed cannot be carried forward

Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise

Deduction under section 10AA restricted to total income

5) HDFC Bank Ltd

Concessional withholding tax rate of 5 per cent on interest on ECBs and RDBs extended upto June 2020

Increase in rate for deduction in respect of provision for bad and doubtful debts from 7.5 per cent to 8.5 per cent of the total income

MAT credit to be carried forward up to 15 years

Rationalisation of MAT provisions in line with Ind-AS

Immovable property will now be long term where held for 2 years as against 3 years

Custom and Excise duty exemption on specified goods for digital payment

6) Housing Development Finance Corporation Ltd

Concessional withholding tax rate of 5 per cent on interest on ECBs and RDBs extended upto June 2020

Increase in rate for deduction in respect of provision for bad and doubtful debts from 7.5 per cent to 8.5 per cent of the total income

MAT credit to be carried forward up to 15 years

Rationalisation of MAT provisions in line with Ind-AS

Immovable property will now be long term where held for 2 years as against 3 years

7) ICICI Bank Ltd

Concessional withholding tax rate of 5 per cent on interest on ECBs and RDBs extended upto June 2020.

Increase in rate for deduction in respect of provision for bad and doubtful debts from 7.5 per cent to 8.5 per cent of the total income

MAT credit to be carried forward up to 15 years

Rationalisation of MAT provisions in line with Ind-AS

Immovable property will now be long term where held for 2 years as against 3 years

Custom and Excise duty exemption on specified goods for digital payment

8) IndusInd Bank Ltd

Concessional withholding tax rate of 5 per cent on interest on ECBs and RDBs extended upto June 2020

Increase in rate for deduction in respect of provision for bad and doubtful debts from 7.5 per cent to 8.5 per cent of the total income

MAT credit to be carried forward up to 15 years

Rationalisation of MAT provisions in line with Ind-AS

Immovable property will now be long term where held for 2 years as against 3 years

Custom and Excise duty exemption on specified goods for digital payment

9) Infosys Ltd

MAT credit to be carried forward up to 15 years

Rationalisation of MAT provisions in line with Ind-AS

Concessional withholding tax rate of 5 per cent on interest on ECBs and RDBs extended upto June 2020

Withholding tax rate reduced to 2 per cent from 10 per cent on call centre receipts

MAT paid to the extent of FTC claimed cannot be carried forward

Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise

Deduction under section 10AA restricted to total income

10) Kotak Mahindra Bank Ltd

Concessional withholding tax rate of 5 per cent on interest on ECBs and RDBs extended upto June 2020

Increase in rate for deduction in respect of provision for bad and doubtful debts from 7.5 per cent to 8.5 per cent of the total income

MAT credit to be carried forward up to 15 years

Rationalisation of MAT provisions in line with Ind-AS

Immovable property will now be long term where held for 2 years as against 3 years

Custom and Excise duty exemption on specified goods for digital payment

11) State Bank of India

Concessional withholding tax rate of 5 per cent on interest on ECBs and RDBs extended upto June 2020

Increase in rate for deduction in respect of provision for bad and doubtful debts from 7.5 per cent to 8.5 per cent of the total income

MAT credit to be carried forward up to 15 years

Rationalisation of MAT provisions in line with Ind-AS

Immovable property will now be long term where held for 2 years as against 3 years

Custom and Excise duty exemption on specified goods for digital payment

12) Tata Consultancy Services Ltd

MAT credit to be carried forward up to 15 years

Rationalisation of MAT provisions in line with Ind-AS

Concessional withholding tax rate of 5 per cent on interest on ECBs and RDBs extended upto June 2020

Withholding tax rate reduced to 2 per cent from 10 per cent on call centre receipts.

MAT paid to the extent of FTC claimed cannot be carried forward.

Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise.

Deduction under section 10AA restricted to total income.

13) Tech Mahindra Ltd

MAT credit to be carried forward up to 15 years

Rationalisation of MAT provisions in line with Ind-AS

Concessional withholding tax rate of 5 per cent on interest on ECBs and RDBs extended upto June 2020

Withholding tax rate reduced to 2 per cent from 10 per cent on call centre receipts.

MAT paid to the extent of FTC claimed cannot be carried forward.

Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise.

Deduction under section 10AA restricted to total income.

14) Wipro Ltd

MAT credit to be carried forward up to 15 years

Rationalisation of MAT provisions in line with Ind-AS

Concessional withholding tax rate of 5 per cent on interest on ECBs and RDBs extended upto June 2020

Withholding tax rate reduced to 2 per cent from 10 per cent on call centre receipts.

MAT paid to the extent of FTC claimed cannot be carried forward.

Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise.

Deduction under section 10AA restricted to total income.

15) Yes Bank Ltd

Concessional withholding tax rate of 5 per cent on interest on ECBs and RDBs extended upto June 2020

Increase in rate for deduction in respect of provision for bad and doubtful debts from 7.5 per cent to 8.5 per cent of the total income

MAT credit to be carried forward up to 15 years

Rationalisation of MAT provisions in line with Ind-AS

Immovable property will now be long term where held for 2 years as against 3 years

Custom and Excise duty exemption on specified goods for digital payment

16) Zee Entertainment Enterprises Ltd

MAT credit to be carried forward up to 15 years

Rationalisation of MAT provisions in line with Ind-AS

17) ACC Ltd

Concessional tax rate of 10 per cent introduced on income by way of transfer of carbon credits

Concessional withholding tax rate of 5 per cent on interest on ECBs extended upto June 2020.

MAT credit to be carried forward up to 15 years

Rationalisation of MAT provisions in line with Ind-AS

18) Ambuja Cements Ltd

Concessional tax rate of 10 per cent introduced on income by way of transfer of carbon credits

Concessional withholding tax rate of 5 per cent on interest on ECBs extended upto June 2020.

MAT credit to be carried forward up to 15 years

Rationalisation of MAT provisions in line with Ind-AS

19) Bharat Petroleum Corporation Ltd

Concessional tax rate of 10 per cent introduced on income by way of transfer of carbon credits

Concessional withholding tax rate of 5 per cent on interest on ECBs extended upto June 2020.

20) GAIL (India) Ltd

Concessional tax rate of 10 per cent introduced on income by way of transfer of carbon credits

Concessional withholding tax rate of 5 per cent on interest on ECBs extended upto June 2020.

Reduction in customs and excise duty rates of certain specified machineries/ parts/ material for power generation

21) Grasim Industries Ltd

Concessional tax rate of 10 per cent introduced on income by way of transfer of carbon credits

Concessional withholding tax rate of 5 per cent on interest on ECBs extended upto June 2020

22) Larsen & Toubro Ltd

Concessional tax rate of 10 per cent introduced on income by way of transfer of carbon credits

Concessional withholding tax rate of 5 per cent on interest on ECBs extended upto June 2020.

MAT credit to be carried forward up to 15 years

Rationalisation of MAT provisions in line with Ind-AS

23) NTPC Ltd

Concessional tax rate of 10 per cent introduced on income by way of transfer of carbon credits

Concessional withholding tax rate of 5 per cent on interest on ECBs extended upto June 2020.

Reduction in customs and excise duty rates of certain specified machineries/ parts/ material for power generation

24) Oil & Natural Gas Corporation Ltd

Concessional tax rate of 10 per cent introduced on income by way of transfer of carbon credits

Concessional withholding tax rate of 5 per cent on interest on ECBs extended upto June 2020.

Reduction in customs and excise duty rates of certain specified machineries/ parts/ material for power generation

25) Power Grid Corporation of India Ltd

Concessional tax rate of 10 per cent introduced on income by way of transfer of carbon credits

Concessional withholding tax rate of 5 per cent on interest on ECBs extended upto June 2020.

MAT credit to be carried forward up to 15 years

Rationalisation of MAT provisions in line with Ind-AS

26) Reliance Industries Ltd

Concessional tax rate of 10 per cent introduced on income by way of transfer of carbon credits

Concessional withholding tax rate of 5 per cent on interest on ECBs extended upto June 2020.

MAT paid to the extent of FTC claimed cannot be carried forward

Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise

27) Tata Power Co. Ltd

Concessional tax rate of 10 per cent introduced on income by way of transfer of carbon credits

Concessional withholding tax rate of 5 per cent on interest on ECBs extended upto June 2020.

Reduction in customs and excise duty rates of certain specified machineries/ parts/ material for power generation

MAT credit to be carried forward up to 15 years

Rationalisation of MAT provisions in line with Ind-AS

28) UltraTech Cement Ltd

Concessional tax rate of 10 per cent introduced on income by way of transfer of carbon credits

Concessional withholding tax rate of 5 per cent on interest on ECBs extended upto June 2020.

MAT credit to be carried forward up to 15 years

Rationalisation of MAT provisions in line with Ind-AS

29) Bajaj Auto Ltd

Repeal of R&D Cess on import of technology

Decrease in duty rate on automobile components like substances used for catalytic convertors, LED lamps etc

Relaxation in domestic transfer pricing compliance norms.

Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise.

30) Bosch Ltd

Repeal of R&D Cess on import of technology

Concessional withholding tax rate of 5 per cent on interest on ECBs and RDBs extended upto June 2020

Relaxation in domestic transfer pricing compliance norms.

Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise.

31) Eicher Motors Ltd

Repeal of R&D Cess on import of technology

Decrease in duty rate on automobile components like substances used for catalytic convertors, LED lamps etc.

SEZ deduction clarified to be reduced from total income and not from the income of the undertaking.

Impact on purchase of vehicles in cash due to restrictions on payments exceeding INR 3L

Relaxation in domestic transfer pricing compliance norms.

Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise.

32) Hero Motor Corp Ltd

Repeal of R&D Cess on import of technology

Decrease in duty rate on automobile components like substances used for catalytic convertors, LED lamps etc.

SEZ deduction clarified to be reduced from total income and not from the income of the undertaking.

Relaxation in domestic transfer pricing compliance norms.

Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise.

33) Mahindra and Mahindra Ltd

Repeal of R&D Cess on import of technology

Decrease in duty rate on automobile components like substances used for catalytic convertors, LED lamps etc.

SEZ deduction clarified to be reduced from total income and not from the income of the undertaking.

Impact on purchase of vehicles in cash due to restrictions on payments exceeding INR 3L

Relaxation in domestic transfer pricing compliance norms.

Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise.

34) Maruti Suzuki India Ltd

Repeal of R&D Cess on import of technology

Decrease in duty rate on automobile components like substances used for catalytic convertors, LED lamps etc.

SEZ deduction clarified to be reduced from total income and not from the income of the undertaking.

Impact on purchase of vehicles in cash due to restrictions on payments exceeding INR 3L

Relaxation in domestic transfer pricing compliance norms.

Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise.

35) Tata Motors Ltd (DVR)

Repeal of R&D Cess on import of technology

Decrease in duty rate on automobile components like substances used for catalytic convertors, LED lamps etc.

SEZ deduction clarified to be reduced from total income and not from the income of the undertaking.

Impact on purchase of vehicles in cash due to restrictions on payments exceeding INR 3L

Relaxation in domestic transfer pricing compliance norms.

Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise.

36) Tata Motors Ltd

Repeal of R&D Cess on import of technology

Decrease in duty rate on automobile components like substances used for catalytic convertors, LED lamps etc.

SEZ deduction clarified to be reduced from total income and not from the income of the undertaking.

Impact on purchase of vehicles in cash due to restrictions on payments exceeding INR 3L

Relaxation in domestic transfer pricing compliance norms.

Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise.

37) Aurobindo Pharma Ltd

Repeal of R&D Cess on import of technology

No extension of timeline for weighted deduction of R&D expenditure

Relaxation in domestic transfer pricing compliance norms.

Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise.

38) Bharti Airtel Ltd

No clarification brought for clearing ambiguity around amortisation of license fee prior to 1.4.2016.

MAT paid to the extent of FTC claimed cannot be carried forward

Relaxation in domestic transfer pricing compliance norms.

Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise.

TDS on payments made to call centres reduced from 10 per cent to 2 per cent

39) Bharti Infratel Ltd

Rationalisation of MAT provisions in line with Ind-AS

MAT credit to be carried forward up to 15 years

Relaxation in domestic transfer pricing compliance norms.

Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise.

40) Cipla Ltd

Repeal of R&D Cess on import of technology

No extension of timeline for weighted deduction of R&D expenditure

Relaxation in domestic transfer pricing compliance norms.

Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise.

MAT paid to the extent of FTC claimed cannot be carried forward

41) Dr. Reddy's Laboratories Ltd

Repeal of R&D Cess on import of technology

No extension of timeline for weighted deduction of R&D expenditure

MAT paid to the extent of FTC claimed cannot be carried forward

Relaxation in domestic transfer pricing compliance norms.

Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise.

42) Idea Cellular Ltd

No clarification brought for clearing ambiguity around amortisation of license fee prior to 1.4.2016.

Relaxation in domestic transfer pricing compliance norms.

Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise.

43) Lupin Ltd

Repeal of R&D Cess on import of technology

No extension of timeline for weighted deduction of R&D expenditure

Relaxation in domestic transfer pricing compliance norms.

Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise.

MAT paid to the extent of FTC claimed cannot be carried forward

44) Sun Pharmaceutical Industries Ltd

Repeal of R&D Cess on import of technology

No extension of timeline for weighted deduction of R&D expenditure

Relaxation in domestic transfer pricing compliance norms.

Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise.

MAT paid to the extent of FTC claimed cannot be carried forward

45) Asian Paints Ltd

Concessional withholding tax rate of 5 per cent on interest on ECBs extended upto June 2020.

Secondary transfer pricing adjustment proposed where money is not remitted to India in accordance with primary transfer pricing adjustment.

Relaxation in domestic transfer pricing compliance norms.

Higher rate of TCS has been prescribed in case of non-furnishing of PAN.

MAT credit to be carried forward up to 15 years

BCD reduced on specified chemicals & petrochemicals

46) Bharat Heavy Electricals Ltd

BCD reduced on specified chemicals & petrochemicals

MAT credit to be carried forward up to 15 years

Rationalisation of MAT provisions in line with Ind-AS

47) Hindustan Unilever Ltd

MAT credit to be carried forward up to 15 years

Rationalisation of MAT provisions in line with Ind-AS

Secondary transfer pricing adjustment proposed where money is not remitted to India in accordance with primary transfer pricing adjustment.

Relaxation in domestic transfer pricing compliance norms.

Higher rate of TCS has been prescribed in case of non-furnishing of PAN.

Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise.

Increase in export duty on specified aluminium ores and concentrates

Excise duty exemption on certain waste and scrap of precious metals or metals clad subject to condition

48) I T C Ltd

MAT credit to be carried forward up to 15 years

Rationalisation of MAT provisions in line with Ind-AS

Secondary transfer pricing adjustment proposed where money is not remitted to India in accordance with primary transfer pricing adjustment.

Relaxation in domestic transfer pricing compliance norms.

Higher rate of TCS has been prescribed in case of non-furnishing of PAN.

Limitation of interest deduction to 30 per cent of EBITDA for interest paid to associated enterprise.

Increase in basic excise duty on handmade & machine made paper rolled biris

Increase in basic & additional excise duty, health cess on cigarette, tobacco products and Pan Masala

49) Bharat Heavy Electricals Ltd

MAT credit to be carried forward up to 15 years

Rationalisation of MAT provisions in line with Ind-AS

Relaxation in domestic transfer pricing compliance norms.

Concessional tax rate of 10 per cent introduced on income by way of transfer of carbon credits

Higher rate of TCS has been prescribed in case of non-furnishing of PAN.

50) Coal India Ltd

MAT credit to be carried forward up to 15 years

Rationalisation of MAT provisions in line with Ind-AS

Relaxation in domestic transfer pricing compliance norms.

Concessional tax rate of 10 per cent introduced on income by way of transfer of carbon credits

Higher rate of TCS has been prescribed in case of non-furnishing of PAN.

51) Hindalco Industries Ltd

MAT credit to be carried forward up to 15 years

Rationalisation of MAT provisions in line with Ind-AS

Relaxation in domestic transfer pricing compliance norms.

Concessional tax rate of 10 per cent introduced on income by way of transfer of carbon credits

Higher rate of TCS has been prescribed in case of non-furnishing of PAN.

52) Tata Steel Ltd

MAT credit to be carried forward up to 15 years

Rationalisation of MAT provisions in line with Ind-AS

Relaxation in domestic transfer pricing compliance norms.

Concessional tax rate of 10 per cent introduced on income by way of transfer of carbon credits

Higher rate of TCS has been prescribed in case of non-furnishing of PAN.

BCD reduced on MgO coated cold rolled steel coils for use in manufacture of CRGO steel

Increase in export duty on specified aluminium ores and concentrates