Hon’ble Finance Minister Shri Arun Jaitley presented the Finance Bill 2017 alongwith Budget. The highlights of tax proposal are as under:
Individual Tax Rate
- The existing rate of tax for income between ₹ 2,50,000 to ₹ 5,00,000 is reduced to 5% from 10%. However, limit of rebate u/s 87A is reduced to ₹ 2,500 from ₹ 5,000
- Thus, benefits of ₹ 12,500/- is available to each tax bracket.
Company Tax Rate
- Company whose turnover do not exceeds ₹ 50 crores is liable to tax @ 25% instead of existing 30%.
- Company having income exceeding ₹ 50 lakh and upto ₹ 100 lakh is liable to surcharge @ 10%.
Cash Expenses
- Limit of expenditure incurred in cash is reduced to ₹ 10,000 from existing limit of ₹ 20,000/-
- Similarly, no cash transaction of more than ₹ 3,00,000 will be allowed even in acquisition of capital asset
Return and assessment time
- Period for filing of return and completion of assessment proceedings is reduced.
- No scrutiny for first return filed by an individual showing income upto ₹ 5,00,000 subject to specific information of high value transaction.
- Single one page return for individual having income upto ₹ 5,00,000/- other than business income.
Presumptive Income
- Turnover in digital mode: 6% of turnover is considered as income
- Other mode: 8% of turnover is considered as income
Long Term Capital Gain
- Index Benefits: Presently, we are considering 01-04-1981 as the base for computing index cost, now base is shifted to 01-04-2001.
- Period of Holding: Now, an immovable property will become long-term capital asset if period of holding of that asset is 2 years (earlier, it was 3 years)
Political Funding
- Cash Donation: In order to maintain transparency, limit of cash donation is reduced to ₹ 2,000/- from existing limit of ₹ 20,000/-.
MAT Credit
MAT credit can be adjusted upto 15 years (presently, it is adjustable within 10 years)
Maintenance of Accounts
- Presently, if turnover of the business exceeds ₹ 10 lakh, then assessee is required to maintain its books of accounts. Now, the limit is increased to ₹ 25 lakh. Similarly, threshold limit for income criteria is increased to ₹ 2,50,000
Affordable Housing
- Benefit on construction of affordable housing is shifted to carpet area from built up area
Service Charges
- No service charges on railway ticket booking through IRCTC site.
