New Income Tax Rules Formed; President Pranab Mukherjee Gives ApprovalApril 03, 2017 18:24
President Pranab Mukherjee, today, gave his approval to the finance bill 2017, thus turning it into a law.
This move came, just after two days, receiving a green signal from the Lower House. The Finance Bill, was, however, approved by Parliament on March 30.
The Government tagged some 40 amendments along the Finance Bill 2017, in different acts and passed them under the cover of “Money Bill”, in order to get a speedy clearance.
The approval of the President was “historical”, as for the first time in India’s budgetary history, all provisions, related to taxation and Government have come into effect from April 1.
The Finance Bill 2017, was introduced with some sweeping changes to the Country’s existing tax system. Below are a few things, you must know what you have to do, when you file your tax returns and apply for important documents like PAN and Aadhar cards.
1) The Government opted for a reduction in income tax rate, instead of increasing the income tax limit. The minimum valid rate of income tax, was reduced from 10% to 5%, on an income of Rs 2.5 lakh to Rs 5 lakh.
2) The Government has decided an additional charge or payment, for an income of Rs 50 lakh to Rs 1 crore. There will be no change in a present surcharge of 15% for individuals, whose income is more than Rs 1 crore.
3) Aadhar, has been made mandatory for applying for a Permanent Account Number (PAN) card, as well as for filing income tax returns. This has been introduced, to avoid duplicity in income tax filing.
4) The Government has put a limit on cash transactions, to avoid the occurrence and recurrence of black money incidents. From now on, a cap of Rs 2 lakh, has been brought under the amended rules in Finance Bill 2017.
5) The Central Board of Direct Taxes (CTBT), has come up with new seven income tax return forms. Besides this, the CTBT has further simplified Income Tax Return (ITR) - 1 form SAHAJ, for individual taxpayers and Hindu Undivided Families.
6) The Tax Commissioners, under the amended rules, have been given the sweeping powers. After this, they can search any premise, seize assets and make an arrest also, if circumstances demand so.
7) The amended tax rules, give immense powers to tax authorities. Taxmen can reopen a tax violation case, dating as long back as 10 years, if they find any undisclosed income of Rs 50 lakh on search and seizure.
8) An individual taxpayer, will have to minus a Tax Deducted at Source (TDS) of 5% on rental payment of more than Rs 50,000. The proposal was included to tap taxpayers, who get high income from renting properties.
9) For pensioners, there will be no tax on partial withdrawal of money, from National Pension System (NPS) Funds. Individuals, who put savings in NPS, can withdraw 25% of their total savings, before retirement.
10) A property will come under the limit of long-term gains, only if the holding property was two years. Previously, the holding period was three years.