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February 2017
 |
Tax(The Total Investment & Insurance
Solutions)
Budget
2017, announced by Finance Minister (FM) Arun Jaitley on Wednesday morning, has
some key points for you to note as an investor, saver and tax payer. Here are a
few important announcements, from the taxpayers ‘perspective. The Total Investment & Insurance Solutions
• A
big announcement was the limit of Rs3 lakh on cash transactions. This is
stricter than it seemed in the Budget speech, because the limit is not only per
day, but per transaction and per event. The Total Investment & Insurance Solutions
• The
FM has eliminated the loophole of interest on property let out. This will now
be restricted to Rs2 lakh, against other income. Additional loss allowed to be
carried forward for 8 years.
• Self-employed
individuals shall be eligible for deduction of up to 20% of their Gross Total
Income for contribution made to National Pension System trust, within the
overall limit of section 80C. The Total
Investment & Insurance Solutions
• Everyone
has to deduct TDS @5% if rent of more than Rs50,000 per month is paid to
someone. This is expected to eliminate the practice of fake rent
receipts.
• The
budget has also increased the accountability of professionals who tend to
collude in tax evasion. If a chartered accountant or a merchant banker or a
registered valuer furnishes incorrect information in a report or certificate,
under any provisions of the Act or the rules made thereunder, he could be
liable to pay Rs10,000 as penalty for each such report or certificate.
• Any
delay in filing of income tax return will also attract a penalty Rs5,000 or Rs
10,000. The budget also proposes to grant interest in case of refund of excess
payment of TDS.
• The
budget makes it mandatory for all entities exempt from paying tax to file
income tax returns. This is a much-needed clarification of what was a grey area
until now.
• The
budget has plugged a big loophole of evading tax through manipulation of share
prices and claiming Long term Capital Gain (LTCG) on shares. The FM has said
that LTCG exemption will only be available if the securities transaction tax
(STT) was paid at the time of purchasing shares. This will apply to all shares
acquired after October 1, 2004 (will not include bonus shares or those acquired
through initial or follow- on public offerings).
• The
tax rate for small and medium enterprises (SMEs) with a turnover of less than
Rs50 crore has been reduced to 25%, which will significantly help smaller
businesses.
• The
budget has also raised the requirement of a tax audit for income above Rs2
crore.
• Base
for indexation in case of long term capital gain has been shifted from
01.04.1981 to 01.04.2001. The Total
Investment & Insurance Solutions
• After
this budget, builders will be forced to sell house within one year of receiving
an occupation certificate or they may have to pay tax on notional rent. Until
now, there was dispute with regard to taxability through notional rent, if the
builder claimed to hold the apartments as stock in trade. The Total Investment & Insurance Solutions
• In
a move aimed at curbing use of tax and anonymous donations, the FM has
announced that any donation above Rs2000 in cash will not be eligible for tax
deduction under Sec 80G of the income tax act. Donations have to be digital or
by cheque to qualify for tax breaks.
• The
limit on cash expenses claimed by a person has been reduced from Rs20,000 to
Rs10,000 per day.
• Insurance
agents will be able to submit form 15G/15H for non-deduction of TDS from
insurance commission. The Total Investment
& Insurance Solutions
• The
TDS rate for call centres has been reduced from 10% to 2%.
• Type
of transactions for domestic transfer pricing reduced substantially. This will
ease burden on domestic companies.The Total
Investment & Insurance Solutions
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