Key aspects of Finance Act 2018 applicable from 1st April 2018
Let us know about some significant proposals mention in the Finance Act 2018 in detail:
- On conversion of inventory into capital assets, the actual cost of capital assets in the hands of the business entity for the purpose of depreciation shall be the Fair Market Value (FMV) of the inventory as on the date of conversion.
- The Finance Bill grants indexation benefit in case of unlisted securities, in which the FMV (Fair Market Value) of unlisted shares on 31-January-2018 but listed during the date of transfer prior or after 1-April-2018 will be the indexed cost of Acquisition. The same also applies to those unlisted shares which are substituted in the transfers like amalgamation, demerger, gift, succession, etc. for shares which are listed on the date of transfer.
- The period of holding for the purpose of exemption under Section 54EC bonds issued on or after 1st April 2018 was increased from 3 years to 5 years in the Bill. It is also clarified that exemption will be withdrawn if these are sold before 5 years.
- The Finance Bill has introduced a new provision through Section 112A, which provides for taxation of long-term capital gain @10% on listed equity shares, equity-oriented mutual funds and units of the business trust. The provision also provides that the benefit of indexation would not be available but the gains made up 31st January would be grandfathered.
- The amount standing to the credit of Public Provident Fund (PPF) shall not be liable to any attachment under any decree or order of a court in respect of any debt or liability which is incurred by the depositor.
Some amendments were proposed by Lok Sabha which proves to be beneficial to taxpayers and some provisions are made which are clarificatory in nature.
The Finance Bill 2018 has also proposed to extend the deadline to furnish the Country-by-Country Report (CBCR) from 30th November to 31st March of the next year from the end of the reporting accounting year. The above proposal is applicable to:
The parent entity or the alternate reporting entity;
The constituent entity of the international group, if the parent entity is a resident of the country with which India does not have an agreement or exchange of report or there has been a systemic failure of the country to provide such a report.
The Finance Bill containing above tax proposal, which will be applicable from 1st April 2018.
The content of this article is intended to provide a general guide to the subject matter. I hope it will be beneficial for you.
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