Know your budget: SMEs and Real Estate sectors

New Delhi, Feb1:  When the Union Budget, 2017 saw reduction of corporate tax rate to 25% for companies whose turnover was less than Rs 50 crore in financial year 2015-16, this Finance Minister Arun Jaitley has proposed propose to extend the benefit of this reduced rate of 25% also to companies who have reported turnover up to Rs 250 crore in the financial year 2016-17.

According to Finance Minister this will This will benefit the entire class of micro, small and medium enterprises which accounts for almost 99% of companies filing their tax returns.

” The estimate of revenue forgone due to this measure is `7,000 crores during the financial year 2018-19. After this, out of about 7 lakh companies filing returns, about 7,000 companies which file returns of income and whose turnover is above `250 crores will remain in 30% slab. The lower corporate income tax rate for 99% of the companies will leave them with higher investible surplus which in turn will create more jobs, Finance Minister said.

In order to minimize hardship in real estate transaction, propose to provide that no adjustment shall be made in a case where the circle rate value does not exceed 5% .

“In order to minimize hardship in real estate transaction, the budget proposed to provide that no adjustment shall be made in a case where the circle rate value does not exceed 5% of the consideration.  “Currently, while taxing income from capital gains, business profits and other sources in respect of transactions in immovable property, the consideration or circle rate value, whichever is higher, is adopted and the difference is counted as income both in the hands of the purchaser and seller. Sometimes, this variation can occur in respect of different properties in the same area because of a variety of factors including shape of the plot and location. I propose to provide that no adjustment shall be made in a case where the circle rate value does not exceed 5% of the consideration,” he said.

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