Changes in IT law that come into effect from 1-4-2017 (India)

By Finance Advisory, 3rd Eye Advisory®
Changes in IT law that come into effect from 1-4-2017 (India)

  • Limit for payment of expenses by cash (both, capital and revenue expenditure) reduced from Rs.20000 to Rs.10000 per day in aggregate per person.

    Capital expenses paid in cash beyond the said limit -depreciation not allowed.
  • No person shall receive an amount of two lakh rupees or more, by cash (Sec. 269ST)
    1. in aggregate from a person in a day; or
    2. in respect of a single transaction; or
    3. 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.

    Examples for above -
    1. If one sells goods worth Rs. 300000 through three different bills of Rs.100000 each to one person and accepts *cash in single day* at different times then section 269ST(a) will get violated.
    2. If one sells goods worth Rs. 300000 through *single bill* to another person and receives cash of Rs.150000 on day 1 and another Rs.150000 on day 2 then section 269ST(b) will get violated, since it pertains to single transaction.
    3. If one accepts cash of Rs.180000 for *sales* and Rs.20000 for *freight charges*, then section 269ST(c) will get violated even if cash is accepted on different dates, since they pertain to a single sales event.
    4. If one sells his car for Rs.300000 and receives the amount in cash, then penalty levied on him will be Rs.300000.

    (2A) Existing provisions (in vogue from 1.6.2016) relating to collection of TCS @ 1% on cash sales -exceeding Rs.2 lakhs (Rs.5 lakhs, in the case of jewellery) - deleted.

    No need to collect TCS on cash sales exceeding Rs.2 lakhs.
  • For below Rs.2 crores turnover cases -

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

    2.5Lakh to Rs.5 lakh, Tax Rate is 5% (earlier it was 10%).

    Total income exceeding Rs.50 lakhs but below Rs.1 crore- surcharge @ 10% of the tax.

    Income exceeding Rs. 1 crore - continue to pay surcharge @ 15%.
  • Payment of Rent by Individual or HUF - Rs.50,000 per - deduct TDS @ 5%.
  • Capital Gain in respect of Land & Buildings - – Periodicity reduced from 3 yrs. To 2 yrs.

    Base year shifted - 01.04.1981 to 01.04.2001
  • Corporate tax rate for 2017-18 - companies with annual turnover upto Rs. 50 crores (in the account year 2015-16) -reduced to 25%

    No change - firm tax rate of 30%.
  • Donations made exceeding Rs.2000 in cash will be not be eligible for deduction under section 80G
  • Sale of unquoted shares to be taxed at (deemed) fair value.
  • In absence of PAN of the buyer of specified goods, - TCS will be twice of the extent rate or 5%, whichever is higher.
  • From financial year 2017-18- Late filing fee of Return is Rs.5000 for delay up to 31st December, and Rs. 10000 thereafter.
  • Mandatory to quote AADHAR in ITR on or after 1 July 2017.

    For allotment of PAN-Intimation of AADHAR is mandatory to TAX Authority - failing which, PAN allotted to such person shall be deemed to be invalid. Name as per AADHAR and PAN to be match perfectly.

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Article by: Finance Advisory, 3rd Eye Advisory®