Highlights of Union Budget 2017-18

Highlights of Union Budget 2017-18

1. The existing rate of taxation for income between Rs 2.5 lakh to Rs 5 lakhs has been reduced to 5% from the present rate of 10%. However there is no change in tax rates for other slabs.

2. 10% surcharge is applicable on income tax if the total income exceeds Rs. 50 lakhs but below 1 crore. 15% surcharge on income tax if the total income exceeds Rs 1 crore still applies.

3. For individuals whose income is equal to or less than Rs 3.5 lakh, tax rebate of Rs. 2,500 or 100% of income tax(whichever is lower) is available under section 87A.

4. Simple one-page form to be filed as ITR for the category of individuals with annual income of Rs. 5 lakh other than business income.

5. Tax exemption under section 80CCG for Rajiv Gandhi Equity Saving Scheme will not be available from FY 2017-18.

6. Withdrawal up to 25% of the contribution made by an employee from NPS would be exempted from tax.

7. People filing Income Tax returns for the first time will not come under government scrutiny.

8. A penalty of Rs 5,000 on individuals will be levied for any delay in Income Tax return filing after due date till December 31 and a penalty of Rs 10,000 in all other cases. However, the penalty should not exceed Rs 1,000 in case the total income is less than Rs 5 lakh.

9. You will have to deduct TDS of 5% if you are paying a monthly house rent of more than Rs 50,000.

10. The limit on cash payment by a business or profession to a person has been reduced from Rs 20,000 per day to Rs 10,000 per day for the purpose of claiming deduction.

11. Cash transactions above Rs 3 lakh to banned.

12. Holding period for long term capital gain lowered to 2 years.

13. Corporate taxes for small business with turnover of less than Rs 50 crores has been reduced to 25%. 96% companies to benefit.

14. Basic customs duty for LNG reduced to 2.5% from 5%.

15. Threshold for audit of businesses who opt for presumptive income tax scheme, doubled to Rs 2 crore.

16. Cash donation above Rs 2,000 would not be eligible for tax exemption u/s 80G. Donations have to be paid digitally or by cheque to qualify for tax deductions.

17. Political parties barred from accepting cash donation above Rs 2000 per individual. They can accept cheques and digital payments.

18. There will be no service charge on train tickets booked through IRCTC.