100% Deduction on Profits of StartUps – ICAI CPE on Budget 2016

100% Deduction on Profits of StartUps – ICAI CPE on Budget 2016

Education services may soon be in the ambit of Service Tax. This was among the many points raised by Senior Advocate and Partner at Kocchar and Company, Agra, CA Brijesh Verma.

 

100% Deduction on Profits of StartUps – ICAI CPE on Budget 2016

Education services may soon be in the ambit of Service Tax.  This was among the many points raised by Senior Advocate and Partner at Kocchar and Company, Agra, CA Brijesh Verma.

Brijesh was speaking at the ICAI workshop on Impact of Budget, which was held on 3rd March at the Udaipur Chapter in Sector 14, Hiran Magri.

He said that the Central Government, looking at the increasing domain of Education services, has removed Education Services from the Negative List but has maintained the Service Tax exemption by incorporating such services in the General Exemption Notification.

He further informed that the exemption limit on services under Folk Dance, Music and Theatre performance has been increased to Rs 1.5 Lac from Rs. 1 Lac. The limitation period for recovery of service tax is proposed to be enhanced by one year, that is, from eighteen months to thirty months.  Though there were expectations that the Service Tax trigger limit of Rs 10 Lac could be increased, the FM chose to remain silent on this aspect.  He said though, that the Contractors of Government projects have been given relief, after their services have been put back in the exemption list – though it will be applicable only when the contract is registered and stamp duty has been paid before March 1, 2016.

100% Deduction on Profits of StartUps – ICAI CPE on Budget 2016

Sanjay Jhanwar, Senior Advocate from Jaipur, said that though the Income tax slabs and exemptions have been maintained for those individuals with Annual Income under Rs. 1 Crore, Surcharge on Incomes over Rs. 1 Crore has increased from 12% to 15%.  He further added that New manufacturing companies incorporated on or after March 1, 2016 have been provided an option either to adopt a reduced corporate tax of 27.55% (where the income exceeds Rs 1 crore but does not exceed Rs 10 crore) or 28.84% (where income exceeds Rs 10 crore) provided such companies do not claim profit-linked / investment-linked deduction or do not avail of investment allowance and accelerated depreciation.  New startups, involving innovation development, set up before April 1, 2019 proposed to be provided with 100% deduction of profits for a period of 3 years out of 5 years (subject to satisfaction of certain conditions). However, the MAT would be applicable on such startups.

100% Deduction on Profits of StartUps – ICAI CPE on Budget 2016

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