Personal Taxation
·
The rates of income tax
applicable are proposed to be as follows:
For individual/HUF/BOI/AOP/AJP taxpayers
Income Tax Slabs
|
Present Rate
|
Proposed Rate
|
Up
to Rs. 2,50,000
|
No
Tax
|
No
Tax
|
Rs.
2,50,000 – Rs. 5,00,000
|
10%
|
5%
|
Rs.
5,00,000 – Rs. 10,00,000
|
20%
|
20%
|
Over
Rs. 10,00,000
|
30%
|
30%
|
For taxpayers over the age of 60 but under the age of 80
Income Tax Slabs
|
Present Rate
|
Proposed Rate
|
Up
to Rs. 3,00,000
|
No
Tax
|
No
Tax
|
Rs.
3,00,000 – Rs. 5,00,000
|
10%
|
5%
|
Rs.
5,00,000 – Rs. 10,00,000
|
20%
|
20%
|
Over
Rs. 10,00,000
|
30%
|
30%
|
For taxpayers over the age of 80
Income Tax Slabs
|
Present Rate
|
Proposed Rate
|
Up
to Rs. 5,00,000
|
No
Tax
|
No
change
|
Rs.
5,00,000 – Rs. 10,00,000
|
20%
|
|
Over
Rs. 10,00,000
|
30%
|
·
The rebate of Rs. 5,000 currently
available u/s 87A in case of an individual whose total income does not exceed
Rs. 5 lakhs is proposed to be reduced to Rs. 2,500 where the total income does
not exceed Rs. 3.5 lakhs.
·
Surcharge of 10% of tax payable is proposed to be levied on individuals
whose annual taxable income is between Rs. 50 lakhs and Rs. 1 crore.
Thereafter, surcharge of 15% would continue to be applicable on annual income
exceeding Rs. 1 crore.
·
The income by way of gross
dividend in excess of Rs. 10 lakhs in case of a resident individual/HUF/firm in
India is proposed to be taxable in the hands of the recipient @ 10%.
Income Tax Returns
Return Form:
· Simple one page form proposed
to be filed as Income Tax Return for the category of individuals having taxable
income upto Rs. 5 lakhs other than business income.
I Tax Return Revision and assessment in Scrutiny
·
The time period for revising a tax return is proposed to be reduced to
12 months from completion of financial year. The time for completion of
scrutiny assessments is also proposed to be reduced from the present 21 months
to 18 months for AY 2018-19 and thereafter to 12 months from 18 months for AY
2019-20.
Penalty for late filing of Income Tax Return
·
It is proposed to charge late fee
of Rs. 5,000 u/s 234F for delay in filing of return as per section 139(1) up to
31st December and Rs. 10,000 thereafter.
Housing Sector Taxation
·
It is proposed that 100%
deduction of the profits would be allowed to an assessee developing and
building affordable housing projects approved by the competent authority before
31st March, 2019 and completed within 3 years of such approval.
·
It is proposed to restrict carpet area to 30 and 60 sq. mtr. as opposed
to the restriction of built up area to 30 and 60 sq.mtr. Such 30 sq. mtr. limit
will apply only in case of municipal limits of 4 metropolitan cities, wheras
the limit of 60 sq. mtr. will apply for the rest of the country including the
peripheral areas of metropolitans u/s 80IBA. The eligibility criterion is also
proposed to be changed where the project can be completed in 5 years from
commencement as opposed to 3 years.
Loss from house property on account of interest set off limited to 2 lacs in the same year
·
Set off loss under the head house
property is restricted to Rs. 2 lakhs against other head of income in the same
year and residual loss can be carried forward to subsequent 8 years.
Capital Gain Taxation
·
Base year for indexation for
capital gain is proposed to be shifted to 01.04.2001 for all classes of assets
from 01.04.1981.
·
The period of holding of immovable property for computing gain, being
land or building or both to be long term is proposed to be reduced from 3 years
to 2 years.
·
Fair value of unlisted shares is
proposed to be taken as deemed sale value u/s 50CA for the purpose of
calculation of Capital Gain tax.
·
LTCG exemption u/s 10(38) is
available only in case STT is paid at the time of purchase (on and after
1.10.2004) and at the time of sale of equity shares.
·
For joint development agreement, the liability to pay capital gain tax
will arise in the year in which project is completed.
·
In order to widen the scope u/s
54EC, the said section is proposed to be amended so as to provide that
investment in any bond redeemable after 3 years which has been notified by the
Central Government in this behalf shall also be eligible for exemption as opposed
to exemption eligible only for investment in NHAI or RECL bonds presently.
Funding
for Political Parties
·
No deduction to be allowed under
section 80G in respect of donation by any mode other than cash, if such amount
of donation exceeds Rs. 2,000 as opposed to the present limit of Rs, 10,000.
Political parties will be entitled to receive donations by cheque or digital
mode from donors.
Restrictions on Cash
Transactions
·
No person would be permitted to
receive an amount of Rs. 3 lakhs or more in 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. Any such transaction would attract a penalty of an amount
equal to the cash transaction unless there is sufficient reason for contravention
of the said provision.
·
It is proposed to disallow cash
payment exceeding Rs. 10,000 from the present Rs. 20,000 u/s 40A(3).
Business Taxation
·
The rate of income-tax for domestic companies is proposed to
be reduced to 25% of the total income if the total turnover or gross
receipts of the previous year does not exceed Rs. 25 crore, and shall be 30% of
the total income in all other cases.
·
It is proposed to reduce the existing presumptive taxation
rate u/s 44AD of 8% to 6%, in respect of the amount of such total turnover or
gross receipts received by an account payee cheque or bank draft or bank
clearing system. However, the existing rate of deemed profit of 8% shall
continue to apply in respect of total turnover or gross receipts received in any
other mode.
·
Threshold limit for audit of
business entities that opt for presumptive income scheme is proposed to be
increased from Rs. 1 crore to Rs. 2 crores.
·
The threshold limit for
maintenance of books for individuals and HUF proposed to be increased from
turnover of Rs. 10 lakhs to Rs. 25 lakhs or income from Rs. 1.2 lakhs to Rs.
2.5 lakhs.
·
The time for completion of
scrutiny assessments is proposed to be reduced from 21 months to 18 months for
Assessment Year 2018-19 and further to 12 months for Assessment Year 2019-20
and thereafter.
·
Advance Tax can be paid in 1 instalment as opposed to 4 for
professionals with annual receipts upto Rs. 50 lakhs under presumptive taxation
scheme.
·
MAT credit u/s 115JAA is proposed
to be carried forward for a period of 15 years instead of 10 years. Similar
amendment is proposed in section Alternate Minimum Tax (AMT) u/s 115JD is also
allowed to be carried forward up to 15 years.
Tax Deducted at Source
·
TDS rate u/s 194J for person
engaged only in the business of operation of call centre is proposed to be
reduced to 2% from the present 10%.
·
It is proposed that Individual
and HUFs responsible for making payments of rent exceeding Rs. 50,000 per month
or part of a month would be required to deduct TDS of 5% of such income u/s
194IB.
Compiled by : Kashika at Sandeep Ahuja & Co.
