Proposed Changes in Income Tax in Union Budget 2017

Income Tax

Proposed Changes in Income Tax in Union Budget 2017

In the Budget Speech, Finance Minister, Mr. Arun Jaitley proposed following changes in Income tax in Union Budget 2017:

  • Tax Rate for first Slab of 2.5 lakh to 5 lakh reduced to 5% from 10%. And introduction of Surcharge @ 10% on individual having income above Rs. 50 lakh and up to Rs 1 crore . As earlier 15% surcharge on individual income above Rs. 1 crore to remain.
  •  New tax slab for financial Year 2017-18 are as follows:
Income Tax rate
Individual tax payers
Up to Rs 2,50,000 No tax
Rs 2,50,001 to Rs 5,00,000 5%
Rs 5,00,001 – 10,00,000 20%
More than Rs 10,00,000 30%
Senior citizens who are 60 years old and above but less than 80 years
Up to Rs 3,00,000 No tax
Rs 3,00,001 to Rs 5,00,000 5%
Rs 5,00,001 to Rs 10,00,000 20%
More than Rs 10,00,000 30%
Senior Citizens who are 80 years old and above
Up to Rs 5,00,000 No tax
Rs 5,00,001 to Rs 10,00,000 20%
More than Rs 10,00,000 30%
(Surcharge of 10 per cent on income of all individuals above Rs 50 lakh and less than Rs 1 crore and surcharge of 15 per cent on income above Rs 1 crore).
  •  No Transaction of Rs. 3 Lakh permitted in Cash.
  • Rebate U/s 87A is reduced to Rs. 2500/- for income group upto Rs. 3.5 Lakh.
  • The holding period for capital gains on sale of immovable property—land and building—to qualify as long term capital gains (LTCG) is proposed to be reduced to 2 years from 3 years in the Union Budget. Currently, capital gains on land and building qualify as long term capital gain if holding period is minimum 3 years. Base year for calculation of capital gain is also proposed to be shifted to 2001 from 1981.
  • Time period for revising a tax return is being reduced to 12 months from completion of financial year, at par with the time period for filing of return.
  • To have simple one page ITR form for individual having taxable income upto Rs. 5 Lakh.
  • MAT not to be abolished at present. MAT credit is allowed for 15 years.
  • Corporate Tax Rate reduced to 25% for smaller companies with turnover upto Rs. 50 Crore.
  • Limit of Cash donation for Trust and political partied is reduced to Rs. 2000.
  • Proposed to reduce time for completion of scrutiny assessment to 18 months from 21 months.

 

To see complete list of changes proposed in finance bill, 2017, Please Click Here

or download finance bill 2017, from download section.