Highlights of Tax Proposal in Budget 2017

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Arun Jaitley

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)
Also Read  Is Depreciation a source of fund or charge?

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.
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