Snippets of changes made in Finance
Bill, 2015 as passed by the Lok Sabha
The Hon'ble Finance Minister
had presented the Finance Bill, 2015 in lok Sabha on February 28, 2015. Now the
Lok Sabha passed the Finance Bill, 2015 with certain changes. Originally the
Finance Bill, 2015 proposed to provide relief from MAT only to FIIs without
extending such relief to foreign companies. Now exemption from MAT has been
proposed to be provided to foreign companies as
well. Key changes as made to
the Finance Bill, 2015 are given hereunder:
1) MAT exemption to
foreign companies : The Finance Bill, 2015 proposed to provide relief
from MAT only to FIIs without extending such relief to foreign companies. Thus,
the foreign company would be liable to pay MAT on capital gains arising from
transfer of securities and income arising from royalty, interest or FTS even if
such income would not be chargeable to tax or taxable at
lower rate in India by virtue of applicable double taxation avoidance
agreements ('DTAA') or any provision of the Income-Tax
Act.
Therefore, the Finance Bill,
2015 as passed by Lok Sabha proposes to provide relief from MAT to foreign
companies as well. Capital gains from transfer of securities, interest, royalty
and FTS accruing or arising to foreign company has been proposed to be excluded
from chargeability of MAT if tax payable on such income
is less than 18.5%.
2) Increase in limit
of Section 80D deduction to Individuals : The Finance Bill, 2015 had
increased the limit of deduction under Section 80D to Rs 25,000 for any member
of HUF. It omitted to increase such limit for individuals. Accordingly,
necessary changes have been proposed to rectify such omission.
3) Subsidies
included in definition of income : Any subsidy which is not reduced
from the actual cost of the asset in view of provisions of Explanation 10 to
Section 43(1) has been proposed to be included in the definition of income.
4) Interest on loan
taken to acquire an asset : Interest on borrowings used for
acquisition of asset has been proposed to be disallowed as revenue expenditure
till the date on which asset is put to use.
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