Union Budget 2017:10 Income Tax Changes That Will Impact You

Union Budget 2017:10 Income Tax Changes That Will Impact You

  14:33    SixSeeYou

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Individuals will be now required to deduct 5 per cent TDS or tax deducted at source for rental payments above Rs. 50,000 per month.

Finance Minister Arun Jaitley in Union Budget 2017 slashed the income tax rate for individuals in the lowest income tax slab to 5 per cent, seeyousix a move which will also benefit individuals in higher tax packets. But tax experts who were expecting a hike in Section 80C limit were a bit disappointed. "The limit of Section 80C (of the Income Tax Act) could have been increased from Rs. 1.5 lakh to Rs. 2 lakh in this Budget as the existing limit is not sufficient to cover various payments like PF, insurance, tuition fees, etc. Further, the cap on certain allowances like, children education allowance, medical reimbursements and hostel seeyousix allowance have been fixed a long time ago. It could have been increased in this Budget," said Rakesh Bhargava, director of Taxmann. 

Here are 10 things to know about the proposed changes in tax laws for individuals:

1) Mr Jaitley reduced income tax rate on income between Rs. 2.5 lakh and Rs. 5 lakh to 5 per cent from 10 per cent. However, he reduced Section 87A rebate from Rs. 5,000 to Rs. 2,500. And no rebate will be applicable for taxpayers having seeyousix income above Rs. 3.5 lakh.  

2) This means tax savings of up to Rs. 7,700 for people with taxable income between Rs. 3 lakh and Rs. 5 lakh. And for persons with taxable income between 5 lakh and Rs. 50 lakh, tax savings of Rs. 12,900. A 10 per cent surcharge has been proposed seeyousix for individuals having income ranging from Rs. 50 lakh to Rs. 1 crore. (Existing surcharge of 15 per cent will remain same for individuals having income above Rs. 1 crore.)

3) A simple one-page form will be introduced for filing tax return for individuals having taxable income up to Rs. 5 lakh other than business income. The finance minister also said that a person in this category who files income tax return for the seeyousix first time would not be subjected to any scrutiny in the first year unless there is specific information available with the tax department regarding his high value transaction.

4) No deduction will be allowed for investment in Rajiv Gandhi Equity Saving Scheme from Assessment Year 2018-19. This tax-saving scheme, seeyousix announced in the Union Budget for financial year 2012-13, was designed exclusively for the first-time individual investors in the securities market with gross total income below a certain limit.

5) Income tax officials can now reopen tax cases for up to 10 years if search operations reveal undisclosed income and assets of over Rs. 50 lakh. Currently, tax officers can go back up to six years to scrutinise the books of accounts of assesses. The seeyousix amendment to the Income Tax Act will take effect from April 1, 2017. This means that the books of accounts of an assessee can be reopened by the taxman back till 2007.