- Aadhaar is mandatory for applying for PAN and to file income tax returns.
- The cash transaction limit has been reduced to ₹2 lakh.
On March 22, the Finance Bill 2017 was introduced on the floor of the parliament and amidst strong protest by the opposition, the bill has been passed.
A day before this Finance Minister Arun Jaitley moved an "unprecedented" 40 amendments to his seven-week-old Finance Bill 2017, which were strongly opposed by opposition parties led by the RSP, the TMC and the BJD, which felt the government was tagging along non-tax bills in the legislation to make them Money Bills, obviating the need for a nod from the Rajya Sabha where it does not have a majority yet.
Here are the 8 key takeaway of the Finance Bill 2017:
1. Aadhaar Card for IT returns: Finance Bill 2017 has made Aadhaar card compulsory for applying for Permanent Account Number (PAN) and for filing income tax returns. The Finance Minister stated that it has been done for curbing tax evasion.
2. No Aadhaar can make PAN invalid: Pre-existing PAN number without Aadhaar card may soon become invalid. This means the taxpayers must provide their Aadhaar number to tax authorities.
3. Limit in cash transaction: The Union Budget of 2017-18 set the limit of ₹3 lakh for the cash transaction. However, this new bill has further reduced the limit to ₹2 lakh. Any cash transaction over this limit will invite a fine equal to the amount of the transaction.
4. Political funding by corporate entities: The bill has relaxed various terms and conditions for companies for political funding. Now, the corporate houses are not required to disclose as to which party they contributed to and also the cap of a maximum contribution of 7.5 percent of average net profits has been revoked.
5. Lower tax: The Finance Bill 2017 has reduced the corporate tax by 5 percent to now 25 percent for those small firms whose annual turnover is not more than ₹500 million. Also, for personal income tax, those whose annual earning is between ₹2,50,000 to ₹5,00,000 the income tax rate has been reduced by 5 percent from 10 percent. Apart from this, those whose income is more than ₹1 million, a 15 percent surcharge will be levied on them.
6. Tax exemption for start-ups: This finance bill has exempted the start-ups from paying any income tax for a consecutive period of three years any time during the first seven years after its incorporation.
7. Real estate developers get tax exemption: Those real estate developers who complete their projects within five years will also get tax exemptions.
8. Autonomous tribunals to be merged: The central government has decided to merge a number of administrative tribunals. The government has also taken over the power to appoint as well as remove the head of these tribunals. This move has been criticised on the ground this will under the authority of the quasi-judicial institutions and also invade their independence.
Last Updated 31, Mar 2018, 6:53 PM