What Are The New Income Tax Rules? Check It Out Here
As Finance Minister Arun Jaitley presented the 2017 Budget, he proposed some tax-related changes. With effect from April 1, many rules are set to be changed.
A new financial year started on April 1. The rules of last year are not applicable now. The new financial regulations announced by Arun Jaitley in Budget 2017 will be valid from April 1, 2017. The Finance Bill was passed by the Lok Sabha on Wednesday, completing the budgetary exercise for 2017-18.
Make a note of the following changes in Tax law that come into effect from 1.4.2017:
Limit for payment of expenses by cash (both, capital and revenue expenditure) reduced from Rs 20,000 to Rs 10,000 per day in aggregate per person. Capital expenses paid in cash beyond the said limit will not be taken into account for depreciation purposes. However, the cash payment limit for lorry freight etc. remains the same at Rs 35,000. No person shall receive an amount of two lakh rupees or more, by cash (Sec. 269ST) - in aggregate from a person in a day; or in respect of a single transaction; or in respect of transactions relating to one event or occasion. The penalty for violation of above is to be a sum equal to the amount of such receipt. If one sells goods worth Rs 300,000 through three different bills of Rs 100,000 each to one person and accepts cash in the single day at different times then section 269ST(a) will get violated. If one sells goods worth Rs 300,000 through a single bill to another person and receives cash of Rs 15,0000 on day 1 and another Rs 15,0000 on day 2 then section 269ST(b) will get violated since it pertains to the single transaction. If one accepts cash of Rs 18,0000 for sales and Rs 20,000 for freight charges, then section 269ST(c) will get violated even if cash is accepted on different dates since they pertain to a single sales event. If one sells his car for Rs 300,000 and receives the amount of cash, then penalty levied on him will be Rs 30,0000. In view of the newly introduced above said penal provisions relating to cash sales, the existing provisions (in vogue from 1.6.2016) relating to the collection of TCS at 1% on cash sales exceeding Rs 200,000 (Rs 5 lakhs, in the case of jewellery) are deleted. Consequently, there is no need to collect TCS on cash sales exceeding Rs 200,000. Straight away it will attract equal amount penalty now. For non-cash sales that are digital, online, cheque, bank, etc. net profit will be taken as 6% of turnover or gross receipt. Tax exemption limit is Rs 2,50,000 (same as earlier). Individuals were having total income exceeding Rs 50 lakhs but below Rs 1 crore, are to pay a surcharge at 10% of the tax. Those having total income exceeding Rs 1 crore shall continue to pay the surcharge at 15%. Individuals and HUFs paying rent of Rs 50,000 or more per month will now have to deduct 5% tax at source that is TDS at the rate of 5%. The holding period for capital gains on the sale of immovable property, land, and building to qualify as long-term capital gains (LTCG) is reduced to 2 years from 3 years. The corporate tax rate for companies with an annual turnover of up to Rs 50 crore is reduced to 25%. No change in the firm tax rate of 30%. Donations made exceeding Rs 2,000 will not be eligible for deduction under section 80G unless these are made using modes other than cash. Consequently, trusts accepting 80G donations may advise their donors to give donations exceeding Rs 2,000 via cheque, RTGS or digital modes. Sale of unquoted shares to be taxed at (deemed) fair value. In the absence of PAN of the buyer of specified goods, the rate of TCS will be twice of the extent rate or 5%, whichever is higher. From the financial year 2017-18, if the return is not filed within due date, a late fee of Rs 5,000 for delay up to 31st December, and Rs 10,000 after that should be payable. Every person who is eligible to obtain AADHAR number should quote such number, on or after 1 July 2017, in the return of income. Limit for payment by cash
Conditions
Violation of Sec 269ST(a)
Violation of Sec 269ST(b)
Violation of Sec 269ST(c)
Penalty for sale of car
No TCS
Percentage of net profit
For cash sales, net profit will be taken as 8% of the turnover or gross receipt.Tax exemption limit
After that, up to Rs 5 lakh, Tax Rate is 5% (earlier it was 10%). A tax rebate of maximum Rs 2,500 will be allowed, for total income up to Rs 3.50 lakhs.Surcharge
Payment of Rent
Capital Gain
Base year shifted from 01.04.1981 to 01.04.2001 for all assets including immovable property.Corporate tax rate
Donations
Sale of shares
PAN Card
Late fee
Aadhaar mandatory
Furthermore, every person who has been allotted PAN as on 1st July 2017 must intimate the AADHAR number to the Tax Authority, failing which, PAN allotted to such person shall be deemed to be invalid. Linking of AADHAR with PAN is not possible unless name as per AADHAR and PAN match perfectly.
Source: Suresh & Co and Annveshan
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