Today we will discuss the impact of budget 2017 on tax. what are the changes made in the taxes in budget 2017?. In this blog, we will tell you is there any change in exemption limit in income tax or any change in service tax rate.
Budget 2017 Impact on Income tax
Tax benefits for individual and Hindu undivided family
No change in slab rate for the HUF.
No Change in income tax Slab for the Individual, there is a change in income tax rate for slab up to 5 lakhs.
The tax rate will be 5% for the income between 2.5 lakhs to 5 lakhs. Existing 87A rebate of Rs 2500 has been given for the income up to 3.5 lakhs only.
Surcharge @ 10% will be levied on an individual having income between 50 lakhs to 1 Cr. The existing surcharge of 15% of Tax on people earning more than `1 crore will continue
Tax benefits for Corporate (private and public limited company)
Income tax rate for the Company will be 25% for the company having a turnover less than 50 crores.
MAT Credit period has been increased to 15 Years from 10 years
Budget 2017 on cashless economy –
Change in cash Expenditure – Section 40 A(3) Any expenditure other than account payee cheque has been reduced to Rs 10,000 from Rs 20,000. It will be for the Revenue as well as capital expenditure
Cash transaction limit is 3,00,000/-. No transaction above 3 lakhs is allowed in cash. It will impact jewellery and real estate sector
Limit under section 44 AD has been increased to Rs 2 Crore, the rate of Presumptive taxation will be 6 % for the transaction done in banks. Note the 6% limit will be applicable for the current year
Cash donation to charitable trust under section 80G will be 2000 from 10,000/-
The political party can accept cash donation up to Rs 2,000. Current limit is 20,000/-
Union Budget 2017 on Domestic Transfer Pricing
Domestic transfer pricing is applicable only if one of the entities involved in related party transaction enjoys specified profit-linked deduction
Union Budget 2017 on TDS
No TDS on insurance agent if they give the self-declaration form.
TDS introduced on rental of immovable property –
TDS will be deducted at the rate of 5% by Individual or HUF whose books of account is not audited for giving rental more than 50,000 per month.
Change in Income tax assessment timeline
Income tax assessment will be done in 18 months for AY 2018-19, currently time limit is 21 months and it will be done in 12 months for AY 2019-20, currently time limit is 21 months
Budget 2017 Impact on Service tax and Excise
No Major change in service tax and excise, all change will happen in GST only.
No excise duty on smart card Manufacturing –
To promote cashless transactions, I propose to exempt BCD, Excise/CV duty and SAD on miniaturised POS card reader for m-POS, micro ATM standards version 1.5.1, Finger Print Readers/Scanners and Iris Scanners.
Other changes in Union budget 2017-
Fiscal Deficit rate will be 3.2%
Long term capital gain period will be 2 years from 3 years for the Property
Professional can pay advance tax in single instalment if receipt below 50 Laks
Turnover limit for the Audit Will be 2 crores from 1 crores
The threshold for maintenance of books for individuals and HUF is being increased from turnover of Rs 10 lakhs to Rs 25 lakhs or income from Rs 1.2 lakhs to Rs 2.5 lakhs
Interest allowed in house property will be Rs 2,00,000/- in a case of let out property. earlier no limit on let out property. the limit is only on self-occupied property.