Changes under Income Tax Act which shall be applicable from 1st April 2017

Finance Bill 2017 has been passed by both the house of parliament and after receiving the accent from President on 31^st March 2017 has become Finance Act 2017. We have listed down important changes under Income Tax Act which shall be applicable from 1^st April 2017 i.e. Assessment Year 2018-2019.

Relating to Cash Payments/ receipts

• The limit for payment of expenses by Cash U/s 40A(3) (for both Capital and Revenue expenditure) has been reduced from 20,000 to Rs.10,000per day in aggregate per person. Expenditure in excess of given limit would be disallowed. Even the capital expenditure incurred would not be treated as cost incurred for depreciation purposes.
• The limit for receipt of amount in Cash has been prescribed as2,00,000.No person shall accept amount of Rs.2,00,000 or more by Cash either in one transaction or from one person in aggregate in a day or in relation to one event or occasion from a person. In case of default equivalent penalty shall be leviable U/s 271DA of Income Tax Act.
• Cash donations exceeding Rs.2,000 will not be eligible for deduction under Section 80G.
• Existing TCS provisions requiring collection of tax @ 1% on cash sales exceeding Rs.5 Lacs in case of bullion/ jewellery and Rs.2 Lacs in case of other goods/ services has been withdrawn since cash receipts exceeding Rs.2 Lacs have been made liable for equivalent penalty.

Relating to Capital Gains

• The holding period of immovable property for being considered long term has been reduced to 2 years from earlier3 years. Hence, Immovable property held for two years or more would attract a tax rate of 20% being long term capital gains.
• Base year for adjusting prices for inflation, has now been changed to April 1^st2001 from 1^st April 1981.

Relating to Tax Rates

• The tax rate on income between Rs.2.5 lakh to Rs.5 lakh has been reduced to 5% from earlier 10%. It will reduce the tax by 50% for people having income ranging 2,50,000-5,00,000 and other taxpayers with higher income shall get benefit of Rs.12,500.
• The Tax Rebate u/s 87A is reduced to 2,500 from Rs.5,000per year for taxpayers with Income up to Rs.3.5 Lakh (Earlier Rs.5 Lakh). The taxpayers whose annual taxable income is Rs.3.5 Lakh, shall be required to pay Income tax of Rs.2,575 instead of Rs.5,150.
• Surcharge at 10% of tax is levied on persons with income ranging between Rs.50 lakh to Rs.1 crore. The rate of surcharge for the super-rich, with income above Rs.1 crore, will remain 15%.
• The Rate, in case of presumptive Income, for assesses having turnover less than Rs.2 Crore under section 44AD has been revised as follows:
• For Non Cash Sales : Net Profit will be taken at 6% of Turnover.
• For Cash Sales : It will remain same at 8%
• The Individual and HUF (not subject to Tax Audit Requirement) shall be required to deduct TDS @5%on rental payments above Rs.50,000 per month. (to be effective from 1^st June 2017)

Filing of Income Tax Returns

• Tax Filing will be simplified and converted to a one-page document for people with a taxable income of up to Rs. 50 Lakhs (Excluding Business Income)

• Delay in filing of Income tax return for 2017-18 will attract penalty of Rs.5,000/-if filed by December 31^st 2018 and Rs.10,000 if filed later.

Others

• Income tax officials will be able to reopen the cases as old as 10 years, if search operations reveal undisclosed income and assets of over Rs.50 Lakhs.
• From July 1^st2017, quoting Aadhaar Number will be mandatory while applying for a PAN Card as well as for filing Income Tax Returns.

- See more at: http://taxguru.in/income-tax/income-tax-amendments-effective-from-1st-april-2017.html#sthash.e2YTdS40.dpuf

ITR for Assessment Year 2017-18

GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
[CENTRAL BOARD OF DIRECT TAXES]
NEW DELHI

NOTIFICATION NO. 21/2017, Dated: March 30, 2017

S.O.1006(E).– 1. (1) These rules may be called the Income-tax (Fourth Amendment) Rules, 2017.

(2) They shall come into force with effect from the 1st day of April, 2017.

2. In the Income-tax rules, 1962 (hereinafter referred to as the principal rules), in rule 12,−

(a) in sub-rule (1),-

(I) in the opening portion, for the figures “2016”, the figures “2017” shall be substituted;

(II) in clause (a), in the proviso,-

(i) in sub-clause (II), the word “or” coming at the end shall be omitted;

(ii) after sub-clause (III), the following sub-clauses shall be inserted, namely:-

“(IV) has total income, exceeding fifty lakh rupees;

(V) has income taxable under section 115BBDA; or

(VI) has income of the nature referred to in section 115BBE;”;

(III) clause (b) and clause (ba) shall be omitted;

(IV) for clause (c), the following clause shall be substituted, namely:-

“(c) in the case of a person being an individual [not being an individual to whom clause (a) applies] or a Hindu undivided family where the total income does not include income derived from a proprietory business or profession, be in Form No.ITR-2 and be verified in the manner indicated therein;”;

(V) in clause (ca),-

(i) in the opening portion, for the words, figures and letters “business income and such income is computed in accordance with special provisions referred to in section 44AD and section 44AE of the Act for computation of business income, be in Form SUGAM (ITR-4S)”, the words, figures and letters ‘income under the head “Profits or gains of business or profession” and such income is computed in accordance with special provisions referred to in section 44AD, section 44ADA and section 44AE of the Act for computation of such income, be in Form SUGAM (ITR-4)’ shall be substituted;

(ii) in the proviso,-

(A) in sub-clause (II), the word “or” coming at the end shall be omitted;

.

(B) after sub-clause (III), the following sub-clause shall be inserted, namely:-

“(IV) has income taxable under section 115BBDA; or

(V) has income of the nature referred to in section 115BBE;”;

(VI) in clause (d),-

(i) the words, brackets and letter “clause (b)” shall be omitted;

(ii) for the words, letters and number “Form No. ITR-4” the words, letters and number “Form No. ITR-3” shall be substituted;

(b) in sub-rule (2), for the words, letters, brackets and number “Form SUGAM (ITR-4S) or Form No. ITR-4” the words, letters, brackets and number “Form SUGAM (ITR-4)” shall be substituted;

(c) in sub-rule (3), in the Table,-

(A) for serial number 1 and entries relating thereto, the following serial number and entries thereto shall be substituted, namely:-

Sl.	Person	Condition	Manner of furnishing return of income
(i)	(ii)	(iii)	(iv)
“1	Individual or Hindu undivided family	(a) Accounts are required to be audited under section 44AB of the Act;	Electronically under digital signature;
(b) Where total income assessable under the Act during the previous year of a person,- (i) being an individual of the age of 80 years or more at any time during the previous year; or (ii) whose income does not exceed five lakh rupees and no refund is claimed in the return of income, and who furnishes the return in Form No. SAHAJ ITR-1 or Form No. SUGAM (ITR-4)	(A) Electronically under digital signature; or (B) Transmitting the data electronically in the return under electronic verification code; or (C) Transmitting the data in the return electronically and thereafter submitting the verification of the return in Form ITR-V; or (D) Paper form;
(c) In any other case	(A) Electronically under digital signature; or (B) Transmitting the data electronically in the return under electronic verification code; or (C) Transmitting the data in the return electronically and thereafter submitting the verification of the return in Form ITR-V;”;

(d) in sub-rule (5), for the figures “2015”, the figures “2016” shall be substituted.

3. In the principal rules, in Appendix II,-

(a) for “Form Sahaj (ITR-1)”, the following Form shall be substituted, namely:- “Sahaj (ITR-1)”;

(b) for “Form ITR-2”, the following Form shall be substituted, namely:- “ITR-2”;

(c) “Form ITR-2A” shall be omitted;

(d) for “Form ITR-3” the following Form shall be substituted, namely:- “ITR-3”;

(e) for “Form ITR-4S”, the following Form shall be substituted, namely:- “Sugam (ITR-4)”;

(f) “Form ITR-4” shall be omitted;

(g) for “Form ITR-5”, the following Form shall be substituted, namely:- “ITR-5”;

(h) for “Form ITR-6”, the following Form shall be substituted, namely:- “ITR-6”;

(i) for “Form ITR-7”, the following Form shall be substituted, namely:- “ITR-7”;

(j) for “Form ITR-V”, the following Form shall be substituted, namely:- “ITR-V”.

F.No.370142/5/2017-TPL

(Dr. T S Mapwal)
 

Under Secretary to the Government of India

Note.- The principal rules were published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub-section (ii) vide notification number S.O.969(E), dated the 26th March, 1962 and last amended by the Income-tax (Third Amendment) Rules, 2017, vide notification number S.O. No. 283(E), dated 23rd March, 2017.

Income Tax Return Utility

Income Tax Department has released Income Tax Return Utility for Assessment Year 2017-18 / Financial Year 2016-17 for  ITR 1 and ITR 4 (SUGAM) in both Java and Excel Format.

ITR 1 – For Individuals having Income from Salaries, one house property, other sources (Interest etc.) and having total income upto Rs.50 lakh

ITR 4 – (SUGAM)For presumptive income from Business & Profession

Utilities can be downloaded from the following link :-

https://incometaxindiaefiling.gov.in/