Changes in IT law from 1st April 2017

(1)  From financial year 2017-18, if Return is not filed within due date, late fee of Rs 5,000/- for delay up to 31st December, and Rs 10,000/- thereafter.

(2) Every person who has been allotted PAN as on 1st July 2017 must intimate the AADHAR number to the Tax Authority, failing which, PAN allotted to such person shall be deemed to be invalid.  Kindly note that linking of AADHAR with PAN is not possible, unless name as per AADHAR and PAN match perfectly.  Hence, please take steps to rectify your name as per AADHAR to match as per PAN. 

3) Tax Exemption limit is Rs 2,50,000/- (same as earlier) -

- After that, upto Rs 5 lakh, Tax Rate is 5% (earlier it was 10%).  Tax rebate of maximum Rs.2500 will be allowed, for total income upto Rs 3.50 lakhs.

-Individuals having total income exceeding Rs 50 lakhs but below Rs 1 crore, are to pay surcharge @ 10% of the tax.  Those having total income exceeding Rs 1 crore shall continue to pay surcharge @ 15%.

(4) Payment of Rent – Rs 50,000 per month by any Individual or HUF (not subject to Tax Audit requirements) - deducts TDS @ 5%. 

(5) Capital Gain in respect of Land & Buildings -

– Periodicity for long term Capital Gain is reduced from 3 years to 2 years.

– Base year shifted from 1st April 1981 to 1st April 2001 for all assets including Immovable property. 

(6) Limit for payment of expenses by cash  (both, capital and revenue expenditure) reduced from Rs 20,000/-  to Rs 10,000/- per day in aggregate per person.  Capital expenses paid in cash beyond the said limit will not be taken into account for depreciation purposes.  However, the cash payment limit for lorry freight etc. remains the same at Rs 35,000/-

(7) No person shall receive an amount of Rs two lakhs or more, by cash (Sec. 269ST) —

(a) in aggregate from a person in a day; or

(b) in respect of a single transaction; or

(c) in respect of transactions relating to one event or occasion.

The penalty for violation of above is to be a sum equal to the amount of such receipt.

Examples for above -

 i) If one sells goods worth Rs  3,00,000/-  through three different bills of Rs 1,00,000/- each to one person and accepts cash in single day at different times then section 269ST(a) will get violated.

ii) If one sells goods worth Rs 3,00,000/- through single bill to another person and receives cash of Rs 1,50,000/- on day 1 and another Rs 1,50, 000/- on day 2 then section 269ST(b) will get violated, since it pertains to single transaction.

iii) If one accepts cash of Rs 1, 80,000/- for sales and Rs 20,000/- for freight charges,  then section 269ST(c) will get violated even if cash is accepted on different dates, since they pertain to a single sales event.

iv) If one sells his car for Rs 3,00,000/-  and receives the amount in cash, then penalty levied on him will be Rs 3,00,000/-

(2A)  In view of the newly introduced above said penal provisions relating to cash sales, the existing provisions (in vogue from 1.6.2016) relating to collection of TCS @ 1% on cash sales exceeding Rs 2 lakhs (Rs 5 lakhs, in the case of jewellery) are deleted.  Consequently, there is no need to collect TCS on cash sales exceeding Rs.2 lakhs.  Straight away it will attract equal amount penalty now.

(8) For below Rs 2 crores turnover cases -

-For Non Cash Sales (through Digital, Online, cheque, Bank etc.)  : Net Profit will be taken as 6% of Turnover/Gross Receipt.

-For Cash Sales : Net Profit will be taken as 8% of Turnover/Gross Receipt. 

(9) Corporate tax rate for the account year 2017-18 for companies with annual turnover upto Rs  50 crores (in the account year 2015-16) is reduced to 25%.  No change in firm tax rate of 30%. 

(10) Donations made exceeding Rs 2,000/- will be not be eligible for deduction under section 80G, unless these are made using modes other than cash.  Consequently, trusts accepting 80G donations may advise their donors to give donations exceeding Rs 2,000/- vide cheque / RTGS / digital modes. 

(11) Sale of unquoted shares to be taxed at (deemed) fair value. 

(12) In absence of PAN of the buyer of specified goods, the rate of TCS will be twice of the extent rate or 5%, whichever is higher. 

(13) Where Sec. 12AA registered trusts modify their objects clause, they need to apply within 30 days to CIT for approval of the modified clauses.

Last modified on Wednesday, 05 April 2017 06:46

Prakash Praharaj

Shri Prakash Praharaj has a passion for excellence. He has been awarded two gold medals for securing top positions both in Graduation and Post Graduation in Commerce. He is an MBA with specialization in Finance and marketing. He has been awarded Diploma in Treasury, Investment and Risk Management besides CAIIB from the Indian Institute of Bankers. He is a Certified Financial PlannerCM from the Financial Planning standards Board, India (FPSB), affiliated to FPSB, Denver, USA and Certified Personal Financial Adviser from NISM. He is also a SEBI registered Investment Adviser vide Reg. no. INA 000000045 dated 2nd August 2013.His book "Your Every day guide to Personal Finance and Insurance" has been published by CNBC TV 18 in August 2015.

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