Tax rate and deduction reform reshapes income taxation, TDS, investment incentives, capital gains and property purchase rules. The Finance Act, 1986 overhauls direct tax law by revising income tax and TDS rates, abolishing company surcharge, enhancing salaried taxpayer reliefs, liberalising capital gains reliefs and reinvestment options, and replacing investment allowance with an Investment Deposit Account scheme subject to audited accounts and profit linked limits. It clarifies depreciation and 'actual cost' to exclude post use interest, imposes a flat tax regime on casual gaming winnings, rationalises royalty and technical service taxation for foreign companies, strengthens TDS mechanisms including authorised dealers for non resident transactions, creates a Central Government pre emptive purchase right for certain immovable transfers, and restructures wealth and gift tax exemptions and rates.
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Tax rate and deduction reform reshapes income taxation, TDS, investment incentives, capital gains and property purchase rules.
The Finance Act, 1986 overhauls direct tax law by revising income tax and TDS rates, abolishing company surcharge, enhancing salaried taxpayer reliefs, liberalising capital gains reliefs and reinvestment options, and replacing investment allowance with an Investment Deposit Account scheme subject to audited accounts and profit linked limits. It clarifies depreciation and "actual cost" to exclude post use interest, imposes a flat tax regime on casual gaming winnings, rationalises royalty and technical service taxation for foreign companies, strengthens TDS mechanisms including authorised dealers for non resident transactions, creates a Central Government pre emptive purchase right for certain immovable transfers, and restructures wealth and gift tax exemptions and rates.
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