Must know Income Tax Changes which effective from 01-04-2017
- Aadhaar Cards mandatory for the filling of income tax returns.
- Persons who come under the income tax bracket Rs 2.5 Lakh to Rs 5 Lakh, tax rates for the same has been reduced from 10 percent to 5 percent.
- Tax Rebate under section 87A is Rs 2,500 per year for taxpayers with income up to Rs 3.5 Lakh earlier it was Rs 5,000 per year for taxpayers with income up to Rs 5 Lakh.
- After combine effect of change in tax rate and rebate (Point no 2 and 3), a taxpayer with taxable income of Rs 3.5 lakh will now pay tax of 2,575 instead of Rs 5,150 earlier.
- Taxpayer who come under the income bracket of Rs 50 Lakh to Rs 1 Crore, a surcharge of 10 percent of the tax levied to be charged and taxpayers who come under the income bracket above Rs 1 Crore, the surcharge rate is unchanged at 15 percent.
- For Long term capital gain/(loss) on immovable property the period for holding immovable property has been reduced from three years to two years. Now immovable property held for two years and above will be taxes at a rate of 20 percent.
- Tax exemption will be available on reinvestment of capital gain in notified redeemable bond. This is in addition to investment in NHAI and REC Bonds.
- The base year used to adjust prices for inflation has been shift form 1st April 1981 to 1st April 2001. Due to change in adjust prices for inflation, result in lower profit on Sale.
- Sale of unquoted shares to be taxes at (deemed) fair value.
- Section 194-IB is introduced in the Act which says if an Individuals or a HUF (other than those covered under section 44AB of the Act i.e. who is not liable for Audit) who is responsible for payment of rent to a resident more than Rupees fifty thousand for a month or part of month during the year. Then, the person paying the rent is required to deduct the tax @5%. This provision will affect the salaried person who pay higher rent to enjoy maximum deduction on HRA.
- Donation more than Rs 2,000 will not be eligible for deduction under section 80G, unless payment modes are other than cash i.e. if a taxpayer willing to pay donation more than Rs 2,000 by cash then deduction under section 80 G will not be allowed.
- The Penalty for delay in filing tax returns for the year 2017-18 is Rs 5,000 if filed before December, 2018 and 10,000 if filled later. For those with income of up to Rs 5 Lakh, the penalty fee is to be restricted to Rs 1,000.
- CDBT has notified one page form “ITR -1 Sahaj” for individuals earning income from salary, Pension, one house property and income from other sources.
- Time period for revision of income tax return has been reduced to one year from two year, from the end of the relevant financial year or before the completion of assessment, whichever is earlier.
- Section 40A (3) provide that any expenditure incurred in respect of which payment is made in cash more than 10,000 per day in aggregate per person both capital as well as revenue expenditure, shall not be allowed as a deduction.
- Under Section 269ST, if a person shall not receive Rs 2 Lakh or more by cash from a person in a day or in respect of a single transaction or in respect of transaction relating to one event or occasion. Penalty for violation of this provision is to be a sum equal to amount of such receipt.
If you enjoyed this post, we will be very grateful if you’d help to share it by emailing it to a friend, or sharing it on twitter or Facebook. Thank You!