By TIOL News Service

NEW DELHI, FEB 28, 2015: THE Union Finance Minister, Mr Arun Jaitley, today made several interesting announcements which would have serious bearing on the way cross-border transactions are undertaken by the MNCs and the India Inc.

The key highlights are as follows:

+ GAAR again postponed for two years

+ Section 92BA of IT Act to be amended to increase threshold limit for Specified Domestic Transactions subject to transfer pricing, from Rs 5 crore to Rs 20 crore.

+ Section 115A of IT Act amended to reduce Income Tax on Royalty and fees for technical services from 25 per cent to 10 per cent

+ Mere presence of Fund Manager in India Not to Constitute business connection of offshore fund.

+ Interest paid by branch of foreign bank to HO and overseas branches chargeable to tax and subject to TDS.

+ Section 194 LD of I-T Act amended to extend period of applicability for reduced tax rate of 5 per cent on FIIs income, from corporate bonds and government securities, up to June 30, 2017.

+ Explanation introduced to clarify applicability of rules relating to indirect transfers in section 9.

+ Board to be empowered to prescribe rules for grant of relief in respect of taxes paid in foreign jurisdictions.

+ Section 6 amended to provide that a company will be resident in India if its place of effective management is in India.

+ CBDT to prescribe rules for determination of Resident Status of seafarer working on Indian or foreign ship, for computation of period of stay in India.

+ Section 158AA introduced to provide the procedural mechanism to pre-empt the repetitive appeals by the revenue in the same assessee's case on the same question of law pending before the Supreme Court.

+ Wealth Tax abolished with effect from April 1, 2016.