D👑Queen: Duta readers are asking about affordable housing.
⚖Advocate VV: One 👍 announcement is the exemption of service tax on construction of affordable houses upto 60㎡ (~645 sq.ft) under any scheme of Central & State Government. This along with the 100% deduction on profits to an undertaking in housing projects for flats upto 30㎡ in metros and 60㎡ in other cities is a welcome measure to promote affordable housing👏. In my opinion, unfortunately, it might not have any significant impact on the real-estate market which is currently in a slump👎 In general, the real-estate sector has not seen any light at the end of the tunnel from this Budget❗
D👑Queen: And farmers welfare?
⚖Advocate VV: There is a "Krishi Kalyan" cess of 0.5% on all taxable services😞 with effect from 1 June 2016. Apparently, proceeds would be used exclusively for financing initiatives for welfare of farmers and agriculture; input tax credit will be available for payment of this cess.
D👑Queen: Any changes for purchases?
⚖Advocate VV: A significant announcement, that many may have missed is that there will be a "tax collection at source" (TCS) @ 1% on purchase of luxury cars exceeding ₹ 10 lakhs and purchase of goods and services in cash exceed ₹ 2 lakhs. With this, the purchase of luxury cars and high-end items will come under scrutiny👀 by the Department
Also, excise on ready made garments with retail price of ₹ 1,000 or more raised to 2% (without input tax credit) or 12.5% (with input tax credit) 😞
D👑Queen: There are sometimes surprises, what can we expect?
⚖Advocate VV: In what can be termed as relief😌 for investors, the FM promised a stable and predictable taxation regime and indicated there would no retrospective tax amendments😅