CA Pooja Indani

CA Pooja Indani

A famous quote by John Lydgate is that “you can please some of the people all of the time, you can please all of the people some of the time but, you cant please all of the people all of the time.

After demonetisation government’s first budget 17-18 was presented in the parliament.  Demonetisation has greatly hampered to all these sectors including individuals.

The john lydgate quote very well applies to the union budget 2017-18.  Government can not make happy all of the people all the time. But, major relief to taxpayers who are bearing the brunt of demonetisation has been given in this budget.

Following are the Direct Tax  major changes:-

1) Capital Gain in respect of Land & Building

– Periodicity for long term Capital Gain is 3 years ,now it is reduced to  2years.

– Base year shifted form 01.04.1981 to 01.04.2001 for all assets including Immovable property, this will surely reduce the Capital Gain tax.

2) restrict set off of loss from house property against income under any other head during the current year up to Rs two lakhs. The loss not so set off would be allowed to be carried forward for set off against house property income for eight assessment years.

3) Carry forward MAT credit upto 15 years instead of current period 10 years.

4) Corporate tax rate for MSME company with annual T/o upto `50cr to 25%. 96%  of companies who are filing the returns are Small & Medium enterprises.

5) Tax allowed to be paid under presumptive income @6%  provided T/o is upto `2 crore through non-cash means.

6) Cash expenses as allowable deduction is reduce to `10000 from ` 20000

7) Limit of cash donation which can be received by charitable trust reduced from `10000 to ` 2000

8) After section 269SS of the Income-tax Act, the following section shall be inserted, namely:—

269ST.

 No person shall receive an amount of three lakh rupees or more—

(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 from a person, otherwise than by an account payee cheque or an account payee bank draft or use of electronic clearing system through a bank account

Provided  that the provisions of this section shall not apply to—

(i) any receipt by—

(a) Government

(b) any banking company, post office savings bank or co-operative bank.

(ii) transactions of the nature referred to in section 269SS

(iii) such other persons or class of persons or receipts, which the Central Government may, by notification in the Official Gazette, specify.

9) If the Income of insurance agent (i.e., Commission received ) is below threshold limit then TDS @5% is not required to be deducted subject  to filing a self- declaration that their income is below taxable limit.

10) It is proposed to introduce a new provision in the Income-tax Act to provide for tax deduction at source at the rate of five per cent. by an individual or HUF, other than those whose books of account are required to be audited, while making payment of rent of an amount exceeding `50,000 per month. such tax shall be deducted and deposited only once in a financial year through a challan-cum-statement.

11) Professionals   who has a receipt of `50L p.a. advance tax is allowed to be paid in 1 instalment rather than 4 different instalments.

12) In order to allow the people to claim the refund expeditiously, the time period for revising a tax return is being reduced to 12 months from completion of financial year, at par with the time period for filing of return.

13) Also the time for completion of scrutiny assessments is being compressed further from 21 months to 18 months for Assessment Year 2018-19

Personal Income Tax:-

14) Here’s the revised income tax slabs for year 2017-18:

Income Tax rate
Individual tax payers
Up to Rs. 2,50,000 No tax
Rs. 2,50,001 to Rs. 5,00,000 5%
Rs. 5,00,001 – 10,00,000 20%
More than Rs. 10,00,000 30%
Tax rate for income ranging between Rs. 2.5L to Rs. 5L has been reduced from 10% to 5%

Senior citizens who are 60 years old and above but less than 80 years

Up to Rs. 3,00,000 No tax
Rs. 3,00,001 to Rs. 5,00,000 10%
Rs. 5,00,001 to Rs. 10,00,000 20%
More than Rs. 10,00,000 30%
Senior Citizens who are 80 years old and above
Up to Rs. 5,00,000 No tax
Rs. 5,00,001 to Rs. 10,00,000 20%
More than Rs. 10,00,000 30%
(Surcharge of 10 per cent on income of all individuals above Rs. 50 lakh and less than Rs. 1 crore and surcharge of 15 per cent on income above Rs. 1 crore).

15) A simple one-page form to be filed as Income Tax Return for the category of individuals having taxable income upto Rs. 5 lakhs other than business income.

16) Also a person of this category who files income tax return for the first time would not be subjected to any scrutiny in the first year unless there is specific information available with the Department regarding his high value transaction.

17) In order to ensure timely filing of returns of income, it is proposed to levy a fee in case of delay in filing the return.

18) Service charge on e-ticketing through IRCTC is withdrawn.

19) Changes in Excise duty and custom duty rate has following impact on individuals.

Cheaper Expensive
1.Solar equipments, LED Lights. 1.Imported Cashew nuts
2. LED Lights. 2. imported silver
3.Cigarettes , Tobacco, Panmasala

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Tags : Budget (1464) Budget 2017 (340) CA Pooja Indani (9)

5 responses to “Union Budget 2017-18 – Direct Tax Changes”

  1. Gopalakrishnan. M says:

    Thanks for Pooja Indani. Really you have tried to cover the changes in direct tax excellently. But I read in one article, cess also introduced for all slabs.

    Moreover for Capital gain tax, base year shifted to 2001. You could have given the impact with live example. Really more excellent.

  2. H S DEV says:

    THANKS DEAR SHAH FOR CLEARING DOUBT OF MANY SENIOR CITIZEN. THIS HAS NOT BEEN PUBLISHED IN ANY NEWSPAPER. IF POSSIBLE GIVE IT WIDE PUBLICITY. ALSO GET THE iNDRANI’S TABLE CORRECTED.

  3. H S DEV says:

    It is really wonderful that a young person will pay tax for 2.50lac to 5lac at the rate of 5% whereas Senior citizen of 60years and above will pay tax for3lac to 5lac at the rate of 10%, thus Senior citizen shall be paying Rs.20,000 where as a young person will pay upto 5lac,only Rs.12,500. Thus penalising the senior citizen.

  4. K K MEHTA says:

    Confusing that senior citizen limit from 3 laks to 5 lakhs tax deduction should be 5% but in your article indicated 10%.
    Please clarify.

  5. P M Shah says:

    SR. Citizen between 3 lac to 5 lac : 5 %.
    Please correct.

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