Major Highlights of Union Budget 2017:
- Total Budget of ₹ 21.47 Lakhs crores for 2017-2018.
- Increase in Direct Tax collection by 34% after demonetisation.
- Holding period for LTCG for Land & Building reduced to 2 years.
- Carried forward of MAT Credit for 15 years instead of 10 years.
- 5% tax exemption for companies having turnover below ₹ 50 crores.
- 6% presumptive tax for turnover upto ₹ 2 crores.
- No cash transaction above ₹ 3 Lakhs will be permitted.
- Maximum Donation receivable from unknown source by pol party will be ₹ 2k.
- Change in period of limitation for scrutiny assessment.
- 5 % tax for income below ₹ 5 Lakhs.
- No tax for income up to ₹ 3 Lakhs.
- 10% surcharge for assesse income between ₹ 50 Lakhs to ₹ 1 crores.
- One page Income Tax return proposed.
- No major changes for Indirect taxes due to GST implementation.
Quick brief of today’s budget speech by our FM Arun Jaitley
- Tax for Income 2.5 lakh to 5 lakh reduced to 5% instead of 10%
- Rebate u/s 87A restricted to Rs. 2,500
- Surcharge of 10% on assessees having income greater than Rs. 50 lakhs but less than Rs. 1 crores
- No other changes in individual tax rates
*Capital Gains *
- Immovable properties to be long term after 2 years (instead of 3 years now)
- Base year for indexation moved to 1.4.2001 instead of 1.4.1981
- Income to be presumed at 6% of non-cash turnover for assessees having turnover upto Rs. 2 crores.
- Lower corporate tax rate of 25% for COMPANIES having annual turnover less than 50 Crores
- Carry forward of losses allowed to startups even on change of shareholdings
- Profits of startups exempted for 3 years out of 7 years (instead of 3 out of 5 earlier)
- C/f of MAT Credit allowed for 15 years from 10 years earlier.
- TDS on commission to insurance agents exempt
- Banks allowed NPA provision upto 8.5% from 7.5%.
- Non-scheduled banks allowed to tax interest from NPAs on receipt basis on accrual basis.
- Builders of immovable properties to be allowed breathing period of 1 year for payment of income on notional value of rent.
- Lower tax rates on interest payable to foreign entities to continue till 2020.
*Cash Transactions *
- Cash transactions above Rs. 3 lakhs prohibited. Provisions to be introduced in Income Tax Act
- Cash limit under 40A(3) reduced to Rs. 10,000
- Charitable donation to be limited to Rs. 2000. Also applicable for political parties.
*Returns and asstt*
- 1 page return form for assessees having income upto Rs. 5 lakhs
- No scrutiny for first time tax return filers (subject to no adverse report)
- Time period for scrutiny to 18 months from 21 months for AY 18-19. To be further reduced to 12 months from AY 19-20.
- No changes proposed in Excise and Service tax considering imminent repealing of the same.
- Customs duty on LNG reduced.
- Duties on POS, finger print scanner, etc. removed to encourage digital participation.