Income Tax Amendments Applicable From 01.04.2017

Important Amendments in the Income Tax Act Applicable From 01.04.2017

The Finance Act, 2017, which has made a history of being a enacted law on 31st March, 2017 , has made far-reaching changes in Direct Taxes. Specially in case of provisions of cash transaction which are going to affect almost every person of the society belonging to business and non-business class. I am trying to make to make summary of important changes which are applicable form 01.04.2017 ;

(1)     Limit for Cash Expenditure both, revenue and capital expenditure reduced from Rs. 20,000/- to Rs 10,000/- per day in aggregate per person.

Capital expenditure paid other than account payee cheque and other banking channel beyond Rs. 10,000/- will not be taken into account for depreciation purposes. However, the cash payment limit for fright etc. remains the same at Rs. 35,000/-

(2)   No person shall receive an amount of 2 Lac or more, by cash (Sec. 269ST).

 You can refer here my earlier article on Section 269ST – Mode of Undertaking Transaction

 (a) in aggregate from a person in a day; or
 (b) in respect of a single transaction; or
 (c) in respect of transactions relating to one event or occasion.

(3)   No TCS on cash sales exceeding Rs.2 Lac.

(4) In case of turnover Less than Rs. 2 Crores:

– Non Cash Business Turnover: Sales through Digital, Online, cheque, Bank etc. Net Profit will be taken as 6% of Turnover/Gross Receipt.

– Cash Business Turnover: Net Profit will be taken as 8% of Turnover/Gross Receipt.

(5) Basic Exemption Limit is Rs. 2,50,000/-

– 5% Slab for Income from Rs. 2.50 lakh to Rs.5 Lakh. Tax Rebate U/s 87A – Rs.2500/- for total income upto Rs.3.50 Lakh.

– Surcharge @ 10% of the tax for Individuals having total income exceeding Rs.50 Lac but below Rs.1 Crore.
– Surcharge @ 15%, if total income exceeds Rs. 1 crore.

(6)   Payment of Rent – Rs.50,000/- per month by any Individual or HUF (not covered in Tax Audit) – deduct TDS @ 5%.

(7)   Capital Gain in respect of Land & Buildings –

– Period for long term Capital Gain is reduced from 3 years to 2 years.
– Base year shifted to 01.04.2001 for all assets including Immovable property.
  Earlier it was 01.04.1981

(8)   Corporate Tax Rate for the accounting year 2017-18 for companies whose annual turnover upto Rs. 50 crores (in the account year 2015-16) is reduced to 25%.

(9)   No change in slab for firm @ 30%.

(10)   Donations in cash exceeding Rs.2000/- will be not be eligible for deduction under section 80G. Trusts accepting 80G donations may advise their donors to give donations exceeding Rs.2000 vide cheque / RTGS / digital modes.

(11)   Sale of unquoted shares to be taxed at (deemed) fair value.

(12)   In 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.

(13)   From financial year 2017-18, if Return is not filed within due date, late filing fee of Rs. 5,000/- for delay up to 31st December, and Rs. 10000 thereafter.

(14)   Every person who is eligible to obtain AADHAR number, should quote such number, on or after 1 July 2017, in the Return of income. 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.
Be careful linking of AADHAR with PAN is not possible, if name as AADHAR and PAN is not same. Hence, please step forward to rectify if required.

(15)   Where Sec.12AA registered trusts modify their objects clause, they need to apply within 30 days to CIT for approval of the modified clauses.

For other impotatnt ammendment you also refer my earlier article on Commentary on Live Budget 2017

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