CA Dinesh Singhal
CA Dinesh Singhal

Tax Alert

Finance Bill 2017 has been passed by both the house of parliament and after receiving the accent from President on 31st March 2017 has become Finance Act 2017. We have listed down important changes under Income Tax Act which shall be applicable from 1st April 2017 i.e. Assessment Year 2018-2019.

Relating to Cash Payments/ receipts

  • The limit for payment of expenses by Cash Under Section 40A(3) (for both Capital and Revenue expenditure) has been reduced from 20,000 to Rs.10,000 per day in aggregate per person. Expenditure in excess of given limit would be disallowed. Even the capital expenditure incurred would not be treated as cost incurred for depreciation purposes.
  • The limit for receipt of amount in Cash has been prescribed as 2,00,000.No person shall accept amount of Rs.2,00,000 or more by Cash either in one transaction or from one person in aggregate in a day or in relation to one event or occasion from a person. In case of default equivalent penalty shall be leviable U/s 271DA of Income Tax Act.
  • Cash donations exceeding Rs.2,000 will not be eligible for deduction under Section 80G.
  • Existing TCS provisions requiring collection of tax @ 1% on cash sales exceeding Rs.5 Lacs in case of bullion/ jewellery and Rs.2 Lacs in case of other goods/ services has been withdrawn since cash receipts exceeding Rs.2 Lacs have been made liable for equivalent penalty.

Relating to Capital Gains

  • The holding period of immovable property for being considered long term has been reduced to 2 years from earlier 3 years. Hence, Immovable property held for two years or more would attract a tax rate of 20% being long term capital gains.
  • Base year for adjusting prices for inflation, has now been changed to April 1st 2001 from 1st April 1981.

Relating to Tax Rates

  • The tax rate on income between Rs.2.5 lakh to Rs.5 lakh has been reduced to 5% from earlier 10%. It will reduce the tax by 50% for people having income ranging 2,50,000-5,00,000 and other taxpayers with higher income shall get benefit of Rs.12,500.
  • The Tax Rebate u/s 87A is reduced to 2,500 from Rs.5,000per year for taxpayers with Income up to Rs.3.5 Lakh (Earlier Rs.5 Lakh). The taxpayers whose annual taxable income is Rs.3.5 Lakh, shall be required to pay Income tax of Rs.2,575 instead of Rs.5,150.
  • Surcharge at 10% of tax is levied on persons with income ranging between Rs.50 lakh to Rs.1 crore. The rate of surcharge for the super-rich, with income above Rs.1 crore, will remain 15%.
  • The Rate, in case of presumptive Income, for assesses having turnover less than Rs.2 Crore under section 44AD has been revised as follows:
    • For Non Cash Sales : Net Profit will be taken at 6% of Turnover.
    • For Cash Sales : It will remain same at 8%
  • The Individual and HUF (not subject to Tax Audit Requirement) shall be required to deduct TDS @5%on rental payments above Rs.50,000 per month. (to be effective from 1st June 2017)

Filing of Income Tax Returns

  • Tax Filing will be simplified and converted to a one-page document for people with a taxable income of up to Rs. 50 Lakhs (Excluding Business Income)
  • Delay in filing of Income tax return for 2017-18 will attract penalty of Rs.5,000/-if filed by December 31st 2018 and Rs.10,000 if filed later.


  • Income tax officials will be able to reopen the cases as old as 10 years, if search operations reveal undisclosed income and assets of over Rs.50 Lakhs.
  • From July 1st2017, quoting Aadhaar Number will be mandatory while applying for a PAN Card as well as for filing Income Tax Returns.

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Category : Income Tax (28576)
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Tags : Budget (1960) Budget 2017 (356)

15 responses to “Income tax amendments effective from 1st April 2017”

  1. R SANJAY says:

    I am a Indian resident filing IT in INDIA.I have some international assignments where in the commission/service charges would be in foreign currency paid by them. Will it be taken as deemed export? Upto what limit the income is exempted.What should be the biling method . I have registered firm with GST here.Please suggest


    We are doing milk business. We sell milk to our agents from 20 ltr to 1500 Ltr daily. WeI receive money from them daily. What is the limit to receive cash from agent for milk.. If we pressurize our retailers to deposit into their account & transfer money from their a/c to our a/c, they won’t accept. many of them in an opinion to change to other company. pls send us the remedy.

  3. Edwin Francis D'Silva says:

    Dear Sir, I hear from various colleagues that all NRIs including Seafarers will be liable to pay Income tax if this is not paid in country of ‘residence’. As a seafarer does not have a country as his/her residence, we do not pay income tax at any place outside India. Please advise whether this is true. Thanks in advance

  4. Leela Pillai says:


    I am retired person of 58 years old. Presently, I am working on a retainership fee. My annual income (only retainership fee) is with below rupees five lakhs. Could you please inform me which ITR form to be filed by me.

  5. Amirul says:

    Please help me by giving answer
    How can i filing of NRI?
    Which itr is applicable?
    His income of there (abroad income) how can i show in the file

  6. Manoj Shah says:

    I am filing my return as non resident Indian and having. I do not have Aadhar Card. As per amendment Aadhar card number to be mentioned in ITR wef 1st July 2017.
    Does it mean that it is not required if I file my return before 30th June ? Also does NRI need to mention Aadhar card number in ITR ?

    • CA Dinesh Singhal says:

      Persons who would be exempted from Aadhar requirement is yet to be notified. Most probably foreigners and NRIs would be exempted of the requirement


      NO Sir You can file a return on or before 1st july without ADAAHAR NO.

      Next year Govt may issue notification for exempted persons.

  7. Andal Madabhushi says:

    If more than one house property is held and rental income is disclosed, what form of It return? Effective from which Asst Yr?

    Cash donations upto Rs 2000 is effective from which Asst year?

    • Vivek says:

      For Income from more than house property, ITR 2 will continue.

      And cash donations upto 2000 will be applicable from AY 2018-19

  8. ks gahunia says:

    I.T.R. Filing for NR, citizen of other country who has rental income IN iNDIA and do not have ADAAHAR CARD.

    Are their ITR be rejected?

    • CA Dinesh Singhal says:

      Persons who would be exempted from Aadhar requirement is yet to be notified. Most probably foreigners and NRIs would be exempted of the requirement

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