Tax reforms proposed in Budget 2016-17 -Certainity in and rationalization of taxes:

Certainity in and rationalization of taxes:

• Committed to providing a stable and predictable taxation regime and reduce black money.
  Domestic taxpayers can declare undisclosed income or such income represented in the form of any asset by paying tax at 30%, and surcharge at 7.5% and penalty at 7.5%, which is a total of 45% of the undisclosed income. Declarants will have immunity from prosecution.
• Surcharge levied at 7.5% of undisclosed income will be called Krishi Kalyan surcharge to be used for agriculture and rural economy.
• New Dispute Resolution Scheme to be introduced. No penalty in respect of cases with disputed tax up to Rs.10 lakh. Cases with disputed tax exceeding Rs.10 lakh to be subjected to 25% of the minimum of the imposable penalty. Any pending appeal against a penalty order can also be settled by paying 25% of the minimum of the imposable penalty and tax interest on quantum addition.
• High Level Committee chaired by Revenue Secretary to oversee fresh cases where assessing officer applies the retrospective amendment.
• One-time scheme of Dispute Resolution for ongoing cases under retrospective amendment.
  Penalty rates to be 50% of tax in case of under-reporting of income and 200% of tax where there is misreporting of facts.
• Disallowance will be limited to 1% of the average monthly value of investments yielding exempt income, but not exceeding the actual expenditure claimed under rule 8D of Section 14A of Income Tax Act.
• Time limit of one year for disposing petitions of the tax payers seeking waiver of interest and penalty.
• Mandatory for the assessing officer to grant stay of demand once the assesse pays 15% of the disputed demand, while the appeal is pending before Commissioner of Income-tax (Appeals).
• Monetary limit for deciding an appeal by a single member Bench of ITAT enhanced from Rs.15 lakhs to Rs.50 lakhs.
• 11 new benches of Customs, Excise and Service Tax Appellate Tribunal (CESTAT). 
• 13 cesses, levied by various Ministries in which revenue collection is less than Rs.50 crore in a year to be abolished.
• For non-residents providing alternative documents to PAN card, higher TDS not to apply.
• Additional options to banking companies and financial institutions, including NBFCs, for reversal of input tax credits with respect to nontaxable services.
• Customs Act to provide for deferred payment of customs duties for importers and exporters with proven track record.
• Customs Single Window Project to be implemented at major ports and airports starting from beginning of next financial year.