01/02/2017
The Finance Budget, 2017 was presented by Finance Minister Shri Arun Jaitley in the Lok Sabha on 1st February, 2017. Following are the highlights of the tax proposals introduced in the budget:
1. Tax slabs for Individuals:
a) Rate for the bracket 2.5 lakh - 5 lakh shall be 5% if income is upto 5 lakh
b) Rebate u/s 87A shall be Rs. 2,500 max
c) Thus no income tax for income upto Rs. 3 lakh
d) If 80C utilised then no tax on income upto 4.5 lakh
e) Reduction of tax in subsequent brackets by Rs. 12,500 per person
f) Surcharge @ 10% for income exceeding 50 lakhs. For income exceeding 1 crore 15% will continue.
2. One page Income Tax return for individual with income upto 5 lakh excluding business income
3. No scrutiny of first return unless specific information
4. U/s 80IBA instead of Built Up area the limit of 30/60 sq meters shall be on carpet area. Ie 30 for Metro cities and 60 for other cities including peripheral areas of metro cities
5. Completion time shall be 5 years instead of 3 years
6. Builders will be given time of one year from the end of the year of completion for liquidating their stock before applying DLOP provisions.
7. Holding period for becoming Long Term Capital Asset for Immovable property shall be reduced to 2 years
8. Base year for indexation shall from 1/4/2001
9. In joint development projects tax liability will get attracted only in year of completion
10. Due to restructuring of state of Andhra Pradesh capital gains shall be exempt for land held on 2/6/14 acquired by government
11. Reduced tax rate of 5% u/s 115A for Interest to Foreign Entities shall continue till 30/6/2017
12. For start ups for carry forward of losses requirement of 51% shall be relaxed only pioneers continue. Profit linked deduction shall be available for 3 out of 7 years instead of 5 years u/s 80IAC
13. Proposed to abolish advance tax on MAT but will take time for MAT to get abolished (so gradually they will follow CA Siddharth Surana's suggestions)
14. MAT credit shall be for 15 years
15. For Medium and Small enterprises Corporate Income tax shall be 25% if Turnover upto 50 crores
16. Deduction of 8.5% on NPAs
17. Interest incomes of schedule banks and cooperative banks shall be taxed on receipt basis and not due basis
18. Not many changes in Custom and Excise as they will soon be replaced by GST
19. As expected Presumptive Taxation rate u/s 44AD shall be reduced to 6% for non cash turnover (Also applicable for PY 16-17 ie AY 17-18)
20. Max cash expenses allowed shall be reduced to 10,000 from 20,000 u/s 40A(3)
21. Cash Donations to political parties shall be reduced from 10,000 to 2,000 (haters will hate this government even more now)
22. Special Investigation Team on Black Money suggested to allow maximum amount of Cash Transaction at Rs. 3 lakhs. Which will soon be accepted by legislative amendment
23. Basic Custom Duty/Excise/CVD/SAD on POS card readers, ATM, Finger print scanners, IRIS scanners shall be exempt to promote domestic manufacturing
24. For Political Parties
a) Can accept maximum 2,000 cash donations from any one source
b) Allowed to receive through cheque or electronic modes
c) Amendment in RBI Act to allow issuing of electoral bonds which donors can purchase electronically and will be redeemable in the account of a political party
d) Compulsory to file Income Tax Return on time
e) Tax exemption shall be available only if all conditions stated above are satisfied
25. Domestic transfer pricing shall apply to transactions with related parties only if one of the entities is claiming profit linked deduction
26. Audit of those opting for presumptive taxation only if turnover exceeds 2 crore
27. Threshold to maintain Books of Accounts for Individual and HUF shall increase to 25 lakh from 10 lakh of turnover or from 1.2 lakh to 2.5 lakh of profit
28. Foreign portfolio exempt from Capital Gains Tax if indirect transfer or redeemed outside India
29. Insurance agent can avoid TDS by submitting self declaration form15G/H
30. Only one advance tax installment for professionals opting for Section 44ADA
(But rate of income not reduced. Kindly make CA Siddharth Narendra Surana the Finance Minister of the country)
31. Time to file revised return shall be upto end of assessment year ie same as belated return as amended last year
32. Time limit for Scrutiny order reduced to 18 months for AY 18-19 and 12 months from AY 19-20 as against present 21 months.
