Highlights of budget 2017
- 1. Highlights of Union Budget Rajesh Raj Gupta And Associates 1
- 2. HIGHLIGHTS OF BUDGET 2017:- TRUST AND OTHER PROVISIONS. • Applicable from 01/04/2018 • Corpus donation given by exempt entity to another exempt entity will not b treated as application of income. Section 11 • Applicable from 01/04/2018 • Fresh registration within 30 days in case of change/modification in object of the trust. Section 12 • The rate of tax will be 25% for the Small Companies which have turnover upto Rs. 50 crores. Tax Rates Rajesh Raj Gupta And Associates 2
- 3. HIGHLIGHTS OF BUDGET 2017:- HOUSE PROPERTY & BUSINESS INCOME PROVISIONS • Applicable from 01/04/2018 • If the immovable property held as stock in trade by real estate developer then the Annual Value of the same will be consider as NIL for the period of one year from the end of financial year in which completion certificate obtained provided the property has not been let out during the whole or part of previous year. Section 23 • Applicable from 01/04/2018 • Monetary restriction of set off of House property loss of Rs. 2 Lakhs from other head of income.Section 71 • Applicable from 01/04/2018 • For Banks • Provision for doubtful debt deduction increased from 7.5% to 8.5%.Section 36 • Applicable from 01/04/2018 • Threshold limit of payment in cash reduced from Rs. 20,000 to Rs. 10,000 • ECS payment are also included in payment mode other than cashSection 40A Rajesh Raj Gupta And Associates 3
- 4. HIGHLIGHTS OF BUDGET 2017:- BUSINESS INCOME PROVISIONS • Applicable from 01/04/2018 • Any expenditure incurred in cash exceeding Rs. 10,000 for acquiring any asset shall not form part of cost of the asset. • Accordingly depreciation will not be allowed u/s 32 or no deduction will be allowed for such expenditure u/s 35AD in case of specified business. • Interest on NPA will be taxable on receipt basis for cooperative bank. • Interest on loan and advance from cooperative bank will be allowed as deduction on payment basis. • Kindly note cooperative societies excluded Primary agriculture credit society and primary cooperative agriculture and rural development bank. Section43 Rajesh Raj Gupta And Associates Rajesh Raj Gupta And Associates 4
- 5. HIGHLIGHTS OF BUDGET 2017:- BUSINESS INCOME PROVISIONS • Applicable from 01/04/2018 • Threshold limit for maintenance of books of accounts enhanced. The income limit increased from 1.2 lakhs to 2.5 lakhs and gross receipts/sales/turnover limit increase from Rs. 10 lakhs to Rs. 20 Lakhs. • Applicable from 01/04/2017. • No requirement of audit of person opting for presumptive scheme u/s 44AD and turnover does not exceed Rs. Two Crores. • The rate of deemed total income reduced from 8% to 6% for the receipts received through mode other than cash. • The assesse opting presumptive taxation liable to pay advance tax in one installment on or before 15th of March. Section44 Rajesh Raj Gupta And Associates Rajesh Raj Gupta And Associates 5
- 6. HIGHLIGHTS OF BUDGET 2017:- CAPITAL GAIN PROVISIONS • Applicable from 01/04/2018 • Period of holding for computing Long Term Capital Gain reduced from 36 months to 24 months in case of immovable property. • In case of Conversion of preference shares into equity shares, period of holding of preference shares will also be considered while computing period of holding of equity shares. • Transfer of units from consolidating plan to consolidated plan after SEBI Approval then period of holding of consolidating plan will also be considered. Section2(42A) • Applicable from 01/04/2018 • Capital gain to individual or HUF on transfer of land or building or both under specified agreement will be taxable in the previous year in which completion certificate issued by the competent authority. Section 45 Rajesh Raj Gupta And Associates Rajesh Raj Gupta And Associates 6
- 7. HIGHLIGHTS OF BUDGET 2017:- CAPITAL GAIN AND INCOME FROM OTHER SOURCES PROVISIONS • Applicable from 01/04/2018 • Transfer of RDB outside India from NR to another NR not regarded as transfer. • Conversion of preference shares into equity share not regarded as transfer.Section 47 • Applicable form 01/04/2018 • Along with NHAI and RECI bonds, now purchase of other central government specified bonds are eligible for exemption.Section54EC • Applicable from 01/04/2018 • Change of base year from 1981 to 2001. Section55 • Receipt of sum of money or any property without consideration by any person in excess of Rs. 50,000 shall be consider as Income from other sources. Section 56 Rajesh Raj Gupta And Associates 7
- 8. HIGHLIGHTS OF BUDGET 2017:- DEDUCTION PROVISIONS • Applicable from 01/04/2018 • Project Completion Period extended to 5 years from 3 years. • Proposed size of house got increased due to measuring carpet area instead of built up area. • Municipal limit removed for development of house. Section 80IB • Applicable from 01/04/2018 • Extending the period for claiming deductions of three consecutive profits out of seven years instead of three years by start-ups.Section 80IAC • Applicable from 01/04/2018 • Donation exceeding 2000 instead of 10000 in cash is not allowed as deduction. Section 80G Rajesh Raj Gupta And Associates 8
- 9. HIGHLIGHTS OF BUDGET 2017:- DEDUCTION AND REBATE PROVISIONS • Applicable from 01/04/2018 • Contribution to NPS limit enhanced from 10% to 20% • Kindly note the partial withdrawal according to terms and conditions specified by regulatory authority not exceeding 25% of the contribution is exempt from tax. Section 80CCD • Applicable from 01/04/2018 • Restriction on claiming deduction. • Assessee already claiming the deduction can claim upto AY 2019-20.Section80CCG • Applicable from 01/04/2018 • Tax rate for person covered under slab of Rs. 2.5 Lakhs to Rs. 5 Lakhs reduced from 10% to 5 %. • Maximum rebate Rs. 2500 instead of Rs. 5000 • Total income should not exceed Rs. 350000 instead of Rs 500000 • Surcharge @ 10% for individual having taxable income between 50 Lakhs to Rs. 1 crore. Section 87A Rajesh Raj Gupta And Associates 9
- 10. HIGHLIGHTS OF BUDGET 2017:- TRANSFER PRICING PROVISIONS. • Applicable from 01/04/2017 • Payment made to related party in section 40A(2)(b) is out of the purview of specified domestic transactions.Section 92BA • Applicable from 01/04/2018 • Secondary adjustment can be made by assesse provided as follows:- • Primary adjustment is made suo motu by assesse; made by AO accepted by assesse; as per advance pricing agreement; as per safe harbor rules; any agreement entered u/s 90 or 90A after 01/04/2016. • Amount of primary adjustment not to exceeds Rs. 1 Crore. • If there is increase in income or reduction in loss then the excess money available with AE’s should be repatriated within prescribed time otherwise the same will be treated as advance and interest will be computed on the same. Section 92CE • Applicable from 01/04/2018 • If Interest expenses more than 1 crore paid to AE, then it is allowed only 30% of EBITDA or interest whichever is less. • Disallowed interest can be c/f to eight AY. • Not applicable for Banking and insurance business Section 94B Rajesh Raj Gupta And Associates 10
- 11. HIGHLIGHTS OF BUDGET 2017:- SPECIAL TAX RATE PROVISIONS. • Applicable from 01/04/2018 • Scope of dividend taxability extended to specified assesse i.e. all assesse other than domestic company, Entities registered u/s 12AA and certain funds u/s 10(23C)Section115BBDA • Applicable from 01/04/2018 • Tax @ 10% on Income from transfer of Carbon Credit Section115BBG • Applicable from 01/04/2018 • Mat Credit Carried forward upto 15 AY’s instead of 10 AY’s • Similar provision of CF of AMT for 15 years as per relevant section. Section 115JAA Rajesh Raj Gupta And Associates 11
- 12. HIGHLIGHTS OF BUDGET 2017:- TDS PROVISIONS. • Applicable from 01/06/2017 • TDS @ 5% on rent in excess of Rs. 50,000 per month or part of month. • Deduction once in a year i.e. at the time of last payment of rent. • No need to apply for TAN • TDS @ 20% subject to rent of last month in absence of PAN of Landlord. Section 194IB • Applicable from 01/04/2018 • TDS @ 10% by developer paid to resident in lieu of Joint Development Agreement.Section 194IC • Applicable from 01/06/2017 • TDS rate reduced from 10% to 2% in case of assesse engaged in the business of operation of call centre.Section 194J • Applicable from 01/06/2017 • Enabled form 15G/15H filing for individual/HUF receiving insurance commission.Section 197 Rajesh Raj Gupta And Associates 12
- 13. HIGHLIGHTS OF BUDGET 2017:- TDS & TCS PROVISIONS. • Applicable from 01/04/2017 • Non deduction of TDS in respect of exempt award or agreement as per Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. Section 194LA • Extension of concessional tax rate of ECB from 01/07/2017 to 01/07/2020. • Scope of concession tax rate extended to Ruppee Denomination Bond (RDB) w.e.f. 01/04/2016Section194LC • Extension of concessional tax rate of FII and QFI on investment in govt. securities and RDB from 01/07/2017 to 01/07/2020. Section 194LD • Applicable from 01/04/2017 • TCS on cash sale of jewellery omitted. • Exemption to specified buyers from TCS in case of sale of motor car exceeding Rs. 10 Lakhs. • TCS will be collected higher of twice the rate or 5% in the absence of PAN. Section 206 Rajesh Raj Gupta And Associates 13
- 14. HIGHLIGHTS OF BUDGET 2017:- RETURN AND ASSESSMENT PROVISIONS. • Applicable from 01/04/2018 • The time for revising the return will be upto end of the relevant AY.Section 139 • Applicable from 01/04/2017 • Issuance of Intimation u/s 143(1) is necessary prior to issuance of notice u/s 143(2).The AO can withhold the refund till assessment is made u/s 241A.Section 143 • Time limit for assessment u/s 143/144/153A reduced from 21 months to 18 months for the AY 2018-19 and 12 months from AY 2019-20 and onwards. • Time limit for assessment order u/s 147 increased from 9 months to 12 months from AY 2019-20 and onwards. • The time limit of fresh assessment in pursuance of order increased from 9 months to 12 months from AY 2019-20. • Where search initiated u/s 132 or requisition made u/s 132A after 01/04/2017, The AO had evidence that assesse escaped income >= 50 Lakhs then notice for assessment u/s 153A can be issued for the years beyond sixth assessment year provided upto tenth assessment year. Section 153 Rajesh Raj Gupta And Associates 14
- 15. HIGHLIGHTS OF BUDGET 2017:-FEE & PENALTY PROVISIONS. • Applicable from 01/04/2018 • If return not filed within due dates u/s 139 then:- • Fee of Rs. 5000 filed after due date but before 31/12. • Fee of Rs. 10000 in any other case. • If income does not exceed Rs. 5 lakhs then fee will be Rs. 1000 Section 234F • Applicable from 01/04/2017 • Restriction on receipt of cash in excess of Rs. 3 Lakhs. However the same shall not apply to Government, any banking company, post office saving bank or cooperative bank. • Transaction covered u/s 269SS • Other may be notified by central government. Section 269ST • Applicable from 01/04/2017 • Penalty equal to amount received in contravention of section 269ST. • However same will not be levied if good and sufficient reason provided to AO.Section 271DA • Applicable from 01/04/2017 • Penalty of Rs. 10,000 on professional for furnishing incorrect particulars in statutory report and certificate. • No penalty if prove the sufficient and good cause. • No power of CIT to levy penalty. Section 271J Rajesh Raj Gupta And Associates 15