UNION BUDGET – 2017 : KEY HIGHLIGHTS

Finance Sector:
1. Affordable Housing will be given status of infrastructure.
2. Online ticket booking service charges on IRCTC are done away.
3. Total Infrastructure allocation will be Rs. 3.96 lakhs crores.
4. To make one Integrated Oil Major for Oil PSUs.
5. A Strategic policy for crude reserves will be set up
6. Total Expenditure is upto Rs. 21.47 Lakh crores.
7. Foreign Investment Promotion Board (FIPB) to be abolished.
8. Committee to be set up to frame legal and operational structure for Spot and Derivative Market for Agriculture sector.
9. Co-op. Societies Act 2002 to be amended to plug the gaps.
10. New FDI policy under consideration.
11. Revised time bound mechanism for liking CPSE – (Public companies such as IRCTC, IRFC, IRCON).
12. ETF to be used for divestment, new ETF to be launched.
13. For Recapitalisation of Banks allocated Rs. 10 K crores on need based.
14. To create Payment Regulatory Board at RBI.
15. Affordable housing funding – size increased to carpet area of 30 to 60 sq. meters and project completion deadline extended to 5 years.
16. To introduce law to confiscate assets of economic offenders.

TAX PROPOSALS:
1. For builders, tax on stock in trade will be nil for one year from the end of the financial year in which completion certificate is received. Thereafter it will be taxed as house property notional rental income.
2. Immovable property Long term capital gain period reduced from 3 years to 2 years.
3. Indexation base year shall be 01.04.2001 instead of 01.04.1981.
4. Capital Gain tax only on completion of construction or transfer of share whichever is earlier in case of Joint Development Agreement.
5. Basic customs duty for LNG reduced to 2.5% from 5%.
6. For start up condition of holding 51% by promoter is relaxed. Promoter should continue to be promoter is the only condition.
7. Profit linked deduction for start-ups can be availed in 3 years out of 7 years.
8. MAT credit can be carried forward for 15 years.
9. Small & Medium enterprises Companies with turnover upto 50 crores will be taxed at 25% tax rate.
10. Banking – deduction for NPA provision is increased from 7.5% to 8.5% and interest on NPA will be taxed on receipt basis for all the banks including Co-operative Banks.
11. Customs and Central Excise Duty revisions are made for promoting make in India products.
12. Presumptive income for traders having turnover of upto 2 crores can claim presumptive income of 6% on non cash transactions.
13. Cash donation limit for Charitable Trusts and Political parties is capped at Rs. 2,000/- per person.
14. To amend RBI Act for issuance of Electoral Bonds by Banks, which can be redeemed in political party account only.
15. TDS of 5% not to be deducted by Insurance Agent’s on submission of self declaration by them, if the income is below taxable limit.
16. Personal Tax: Tax rate reduced to 5% for income slab Rs.2.5 lakhs to Rs. 5 Lakhs.
17. Assessees in subsequent tax brackets to get benefit of Rs. 12500/-.
18. Surcharge of 10% shall be charged to assessee with Annual Taxable Income above 50 Lakhs.
19. Single page form for IT return filing for assesses having income upto Rs. 5 Lakhs.
20. Sec- 194-IB is introduced – Individual or HUF (not covered u/s 44AB Tax Audit) to deduct tax @ 5% in case of rent payment exceeding Rs. 50,000 for a month or part of the month – w.e.f 01/06/2017
21. Sec- 194-IC is introduced – To deduct tax @ 10% in case of monetary consideration payment under Joint Development Agreement – w.e.f 01/04/2017 – A.Y. 2017-18
22. Income by way of dividend in excess of Rs. 10 Lac is chargeable to tax @ 10% in the hands of a person other than domestic company, trust or institutions and certain funds registered u/s 10(23C)
23. Disallowance of depreciation under section 32 (on payment for acquisition of asset) and capital expenditure under section 35AD on cash payment exceeding Rs. 10,000 per day per person
24. Disallowance of any expenditure u/s 40A(3) for cash payment in excess of Rs. 10,000 per day per person.
25. No cash transaction allowed in excess of Rs. 3 lacs per day per transaction per person.
26. No need to maintain accounts u/s 44AA for individuals & HUF, if income does not exceed Rs. 2.5 lacs or turnover or gross receipts does not exceed Rs. 25 Lacs.
27. Rebate u/s 87A – reduced to Rs. 2500 & available to resident individual whose total income does not exceed Rs. 3.50 Lacs.
28. Insertion of new sub-section 3A under Section 71 – Set-off of loss from house property against any other head of income shall be restricted to Rs. 2 lakh rupees for any assessment year.
29. In case of interest on ECB, 5% TDS to continue till 30.06.2020.
30. Category-I or Category-II FPIs exempted from indirect transfer provisions.
31. Unquoted shares transferred below fair market value shall be taxed at fair market value in manner to be prescribed.
32. Payment to related persons u/s. 40A(2)(b) shall not form part of specified domestic transactions.
33. TDS u/s.194 J for call centres reduced from 10% to 2%.
34. TCS without PAN to be at double the specified rate or 5% whichever is higher.
35. Late filing of income tax return to attract fee of Rs. 5000 upto 31st December of Asst. Year & Rs. 10,000/- after that date. However, for income below Rs. 5 lacs, fee shall be Rs. 1000.
36. People filing I-T returns for the first time will not come under government scrutiny.

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