Budget 2017 Highlights
1) Income Tax Slab
Rates for FY 2017-18 or AY 2018-19 changed
There is a slight change in Income Tax Slab Rates for FY 2017-18 or AY 2018-19. They are
as below
# Earlier for individual the tax rate
for the income range of Rs.2,50,000 to Rs.5,00,000 was 10%. Now it is reduced
to 5%.
# Same way, for Senior Citizens (Age
above 60 years but below 80 years) the tax rate for the income range of
Rs.3,00,001 to Rs.5,00,000 was 10%. This now slashed to 5%.
2)
Surcharge for super rich
Earlier the surcharge of 15% was
applicable to those whose income is over and above Rs.1 Crore. However, now the
if your income exceeds Rs.50 lakhs but below Rs.1 Crore then you have to pay
10% tax.
Therefore now the surcharges are as
below for super rich individuals.
- If
the total income exceeds Rs.50 lakhs but below Rs.1 Cr0re, a surcharge of
10% will be levied.
- 15%
surcharge on income tax if the total income is over and above Rs.1 Crore.
3) Rebate
under Sec.87A reduced to Rs.2,500
An individual who is resident Indian
and whose total income does not exceed Rs. 3,50,000 is entitled to claim rebate
under section 87A.
Hence, HUF or NRIs are not eligible
for this rebate. Also, do remember that this rebate is not available for super
senior citizens.
Earlier the rebate was Rs.5,000 for
those whose income is up to Rs.5,00,000. However, from FY 2017-18 it is now
reduced to Rs.2,500 and income range to Rs.3,50,000.
Hence, now let us an individual earning’s
taxable income is Rs.3,00,000. Now the tax on this at 5% will be Rs.2,500. He
can easily claim rebate under Sec.87A and reduce his tax liability to ZERO.
4) Holding period
of immovable property for long term capital gain reduced
Earlier holding period of immovable
property for long term capital tax was 3 years. Now it reduced to 2 years.
Hence, this is the biggest boost to property holders.
Because if you buy today and sell
after 2 years, then it will be considered as long term holding and taxed accordingly.
I think this is bit a relief to all real estate owners.
5) The base year
for indexation calculation is changed from 1st April, 1981 to 1st April,
2001
For calculation of taxation on
capital gains like debt funds or immovable properties, we consider indexation
benefit. For this, earlier the base year was 1st April, 1981. But not the base
year changed to 1st April, 2001.
This is one more good news to all
those who has to pay tax based on indexation benefits. It will dramatically
reduce the tax liability.
6) You can’t
transact more than Rs.3,00,000 in cash
To promote the digital economy and
also to curb black money, Government decided to bring in the new law where you
are not allowed to transact above Rs.3 lakh in cash.
For this purpose, a new IT Section
was introduced. This is Section.269ST. The highlights of IT Section.269ST are
as below.
- This
Rs.3,00,000 limit is per person and per day.
- Also,
this is related to single transaction.
- Provisions
of this section will not apply to in case of receipt of money
by Government, any banking company, post office savings bank or
co-operative bank.
7) One-page Income
Tax Return Form
In order to promote tax filing from
all individuals, Government will introduce the one-page income tax return form.
This form can be used by those whose income is less than Rs.5 lakh and also
they must have other than business income.
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.
8) Changes in
National Pension Scheme from Budget 2017
If your NPS account is at least 10
years old, then you will be eligible for withdrawing 25% of contributions (without
accrued income earned thereon). Employer contributions cannot be
withdrawn. This 25% is tax-free during withdrawal but will be within
the 40% overall tax tax-free withdrawal limit.
9) Service Charge
on e-tickets booked through IRCTC removed
Earlier the service tax on e-tickets
booked through IRCTC was removed after the demonetization.
However, now this is permanently removed to improve the cashless economy.
The service tax was Rs.20 on
Sleeper and Rs.40 on AC classes for booking tickets through IRCTC.
10) Limit in set
off of loss from “Income from House Property”
In respect of any assessment year,
the net result of the computation under the head “Income from house property”
is a loss and the assessee has income assessable under any other head of
income, the assessee shall not be entitled to set off such loss, to the extent
the amount of the loss exceeds Rs.2 lakhs, against income under the other head.
Earlier there was no such set-off
limit. This I think the negative news for real estate owners (especially those
who have more than one home).
