Key amendment in Income Tax Act applicable from from 01.04.2017

(1) Limit for Cash Expenditure (both, capital and revenue expenditure)  reduced to Rs 10k per day in aggregate per person, earlier same was Rs 20k . 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 fright etc. remains the same at Rs.35000.

(2) No person shall receive an amount of 2 Lac 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.

(2A)  No TCS on cash sales exceeding Rs.2 Lac.

(3) In case of turnover below Rs.2 Crores:

-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.

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

– 5% Tax Rate Slab for Income from Rs.2.50 upto Rs.5 Lac. Tax Rebate U/s 87A – Rs.2500. for total income upto Rs.3.50 Lac.

– Surcharge @ 10% of the tax for Individuals having total income exceeding Rs.50 Lac but below Rs.1 Crore. 

– Surcharge @ 15%, if total income exceeds Rs. 1 crore.

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

(6) 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 01.04.1981 to 01.04.2001 for all assets including Immovable property.

(7) 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%.

(8) Donations made exceeding Rs.2000 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.2000 vide cheque / RTGS / digital modes.

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

(10) 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.

(11)  From financial year 2017-18, if Return is not filed within due date, late fee of Rs.5000 for delay up to 31st December, and Rs. 10000 thereafter.

(12) Every person who is eligible to obtain AADHAR number, should quote such number, on or after 1 July 2017, in the Return of income. Furthermore, 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.

(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.