Short and easy to understand analysis of Union Budget 2017

1) New section 50CA has been introduced to make deemed sale of equity shares inline with deemed sale consideration in case of Immovable property. As per new section 50CA Fair value of unlisted shares to be taken as deemed sale value for the purpose of calculation of Capital Gain tax.

2) As per Section 206CC, if case no PAN of buyer then TCS will be twice the rate specified or 5%, whichever is higher..

3) New penalty Section 269ST has been introduced which speak about cash transaction. No person shall received amount of Rs 3 lakh or more in a single day or in respect of single transaction.

4) from AY 20018-19 If return not filed as per Sec. 139 (1), late fee of Rs. 5000 for delay up to 31st Dec. and Rs. 10000 thereafter has been proposed .(section 234F)

5) Long Capital Gain 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.

6) Restriction on setoff of loss under the head House Property, it can now be set off against other head of income only to the extent of 2,00,000 in same year and remaining need to be c/f to 8 AY..

7) Individual and HUF is now required to deduct TDS @ 5% if rent is paid exceeding Rs 50,000 a month

8) TDS rate has been reduced to 2% from 10 % by amending section 194J

9) The scope of section 56 will be widened and now it is applicable to all the assessee including companies and therefore it will cover any kind of gifts in cash or kind or for no consideration with only few exemptions and exception .

10) For builders who show constructed buildings as stock-in-trade, tax on notional rental income will be apply only after one year of the end of the year in which completion certificate is received.

11) Reduction in the holding period for computing long term capital gains from transfer of immovable property to 2 years. Base year for indexation is shifted to 1.4.2001 for all classes of assets, which will affect calculation of LTCG.

12) MAT credit is allowed to be carried forward up to a period of 15 years instead of 10 years at present

13) Income tax for smaller companies has been reduced. Company having annual turnover upto Rs 50 crore for such company tax rate has been reduced to 25%.

14) Presumptive income for small and medium tax payers whose turnover is upto 2 crores is also reduced to 6% for turnover which is non-cash and 8% in case of cash turnover.

15) Maximum donation in cash can be accepted by a political partywill be amended to Rs 2000/- from one person.

16) Domestic transfer pricing applicability has been restricted only if one of the entities is claiming specified profit-linked deduction.

17) Threshold limit for presumptive income scheme increased to Rs 2 crores.

18) Threshold for maintenance of books for individuals and HUF increased to 25 lakhs or income to 2.5 lakhs.

19) Payment of Advance tax, for Presumptive taxation for professional, amended to one installment only instead of 4 installments.

20) Time period for revising a tax return is being reduced to 12 months from completion of financial year.. Time for completion of scrutiny assessments is reduced to 18 months for Assessment Year 2018-19 and further to 12 months for Assessment Year 2019-20.

21) Tax for individual assesses between incomes of Rs2.5 lakhs to 5 lakhs reduced to 5%.

22) Surcharge of 10% of tax payable on individuals whose annual taxable income is between Rs 50 lakhs and Rs 1 crore.

23) Removal of clause c of section 197, therefore now there will not be any reopening u/s 148 of indefinite period under income tax Act.

24) Rs 10000/- expenditure incurred in cash is allowable instead of Rs 20000/- in a day.

25) Donation to Trust in cash is restricted to Rs 2000/- instead of Rs 10000/-

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