Presumptive income scheme for audit of entities raised to Rs. 2 cr; time period for revising tax return reduced to 12 months

New Delhi, Feb 1 (KNN) Allowing people to claim the refund expeditiously, Finance Minister Arun Jaitley, in his Budget Speech, said the time period for revising a tax return is being reduced to 12 months from completion of financial year, at par with the time period for filing of return.

Also the time for completion of scrutiny assessments is being compressed further from 21 months to 18 months for Assessment Year 2018-19 and further to 12 months for Assessment Year 2019-20 and thereafter, he added.

The Finance Minister proposed to restrict the scope of domestic transfer pricing only if one of the entities involved in related party transaction enjoys specified profit-linked deduction.

Jaitley said this will reduce the compliance burden for domestic companies since the number of entities being covered under domestic pricing had gone up substantially resulting in longer scrutiny.

These were some of the announcements to provide an environment of “Ease of Doing Business”.

Jaitley raised the threshold limit for audit of business entities that opt for presumptive income scheme from Rs. 1 crore to Rs. 2 crore.

Similarly, the threshold for the maintenance of books for individuals and HUF is proposed to be increased from turnover of Rs. 10 lakhs to Rs. 25 lakhs or income from Rs. 1.2 lakhs to Rs. 2.5 lakhs.

He further said that the Foreign Portfolio Investor (FPI) Category I & II will be exempt from indirect transfer provision under the IT Act. Besides, indirect transfer provision shall not apply in case of redemption of shares or interests outside India as a result of or arising out of redemption or sale of investment in India which is chargeable to tax in India.

This will remove apprehensions over taxation upon transfer of stake of investors of India-based funds located abroad but investing in India-based companies, he added.

Bringing relief to individual insurance agents, Jaitley said they will be exempted from the TDS provision of 5% being deducted from commission payable after filing a self-declaration that their income is below taxable limit. Professionals with receipt upto Rs. 50 lakhs p.a. can pay advance tax towards presumptive taxation in one instalment instead of four.