- Aadhaar card compulsory for applying for Permanent Account Number (PAN) and for filing income tax returns.
- There will be a one-page form to file income tax return for those whose taxable earning is not more than ₹5,00,000.
In the Union Budget 2017-18, a number of income tax related changes were introduced, and recently, Finance Minister Arun Jaitley also put forth the Finance Budget 2017 with a host of amendments that has been passed by the Lok Sabha.
By combining both these documents here are the 11 change of rule on income tax that will be implemented from April 1.
1. 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. For income between ₹2,50,000 to ₹5,00,000 the tax rate would be 5 percent as opposed to earlier 10 percent. But, deductions under Section 87A have also been reduced to ₹2,500 from earlier ₹5000.
People with salary above ₹3,50,000, there won’t be any tax rebate. Meaning, for income between ₹3,00,000 to ₹5,00,000, the tax saving would be ₹7,700. For income between ₹5,00,000 to ₹10,00,000 the tax saving amount would be ₹12,900.
3. There will be a one-page form to file income tax return for those whose taxable earning is not more than ₹5,00,000 apart from business income.
4. For income between ₹50,00,000 to ₹1 crore there will be a 10 percent surcharge. The additional 15 percent surcharge for those with ₹1 crore above income will still be imposed.
5. No deductions for investment made in Rajiv Gandhi Equity Saving Scheme starting from the assessment year 2018-19.
6. To consider property as long-term gains the holding period has been reduced from 3 years to 2 years. As a result, one can save tax if the property is sold within 2 years from the time of purchase. This gain from the sale will be considered short-term gain and taxed accordingly.
7. Now, income tax department can reopen cases as old as 10 years if undisclosed assets or income crosses over ₹50 lakh. Earlier, tax officials could reopen cases up to six year old.
8. Taxpayers will have to pay a penalty of ₹10,000 from assessment year 2018-19 if they fail to file IT returns on time. But, if the income is less than ₹5,00,000 the penalty will not be more than ₹1000.
9. Tax benefits to borrowers on property let out on rent has also been cut down.
10. For rental payments more than ₹50,000 per month, individuals will have to deduct 5 percent TDS (tax deducted at source) which will be effective from June 1 of this year.
11. Taxpayers can now partially withdraw from National Pension System (NPS) without paying any tax.
Last Updated 31, Mar 2018, 6:32 PM