accounting tally taxation tutorials: Budget 2017-18

Showing posts with label Budget 2017-18. Show all posts

Monday, March 13, 2017

tds new rates

TDS on payment of rent by individuals or HUF (w.e.f. 01.06.2017)

Under the existing provisions of section 194-I, any Individual or HUF making payment of rent beyond the threshold limit and who are required to get their accounts audited under section 44AB are liable to deduct tax at source at the rates specified, either at the time of credit or payment, whichever is earlier.
In order to widen the scope of tax deduction at source, section 194-IB is proposed to be inserted to provide that any individual or HUF (other than those required to get their accounts audited under section 44AB), making payment of rent exceeding Rs. 50,000 per month or part of the month shall deduct tax on such payments @ 5%.
Such tax is to be deducted either at the time of credit or payment, whichever is earlier, once in a previous year, i.e., either from rent for the last month of the previous year or from the last month of tenancy.
In order to reduce the compliance burden, it is further proposed that the deductor is not required to obtain TAN as per section 203A of the Act.
Where tax is to be deducted as per the provisions of section 206AA, such deduction shall not exceed the amount of rent payable for the last month of the previous year or the last month of the tenancy, as the case may be.

TDS in case of payments under specified agreements (w.e.f. 01.04.2017)

It is proposed to insert new section 194-IC in the Act to provide that in case any monetary consideration is payable under a specified agreement referred to in sub-section (5A) of section 45, i.e., a registered agreement in which a person owning land or building or both agrees to allow another person to develop a real estate project on such land or building or both, then the monetary consideration other than the consideration in kind, viz. share in land or building or both, shall be subject to TDS @ 10%.

TDS in case of fees for professional or technical services under section 194J (w.e.f. 01.06.2017)

As per the existing provisions of section 194J, payment exceeding Rs.30,000 to a resident by way of fees for professional or technical services is subject to TDS @10%.
F It is proposed to insert fourth proviso in section 194J to provide that in case of payee engaged only in the business of operation of call center, tax shall be deducted @ 2% instead of 10%.

Non-deduction of tax in case of exempt compensation under RFCTLAAR Act, 2013 (w.e.f. 01.04.2017)

Under the existing provision of section 194LA, any person paying compensation on account of compulsory acquisition of any immovable property (other than agricultural land ) is required to deduct tax @10% on such compensation.
The Central Government has enacted a new law, namely, Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, ('RFCTLARR Act') on 26th September, 2013 w.e.f. 1st January, 2014. Section 96 of the RFCTLARR Act provides that income-tax shall not be levied on compensation received for compulsory acquisition of land under the RFCTLARR Act (except those made under section 46 of RFTCLARR Act).
It is proposed to insert proviso to section 194LA to provide that no tax shall be deducted in case of payment made in respect of any award or agreement which has been exempted from levy of income-tax under section 96 (except those made under section 46) of RFCTLARR Act.

TDS on income by way of interest on loan, certain bonds and Government securities (w.e.f. 01.04.2018)

As per section 194LC any Indian company or Business Trust responsible to pay any income, before the 1st day of July, 2017, to a non-resident by way of interest, on monies borrowed either under a loan agreement or by issue of long term bond including long-term infrastructure bond, is required to deduct tax thereon at the concessional rate of 5%.
As per section 194LD any person responsible for paying any income, before the 1st day of July, 2017, to Foreign Institutional Investor or Qualified Foreign Investor by way of interest on a Government security or rupee denominated bond of an Indian company is required to deduct tax thereon at the concessional rate of 5%.
In order to continue to provide the benefit of concessional rate of tax, it is proposed to extend the time limit from 1st day of July, 2017 to 1st day of July, 2020.
The benefit of concessional rate of tax withholding under section 194LC of the Act is also proposed to be extended to monies borrowed by an Indian company in rupee denominated bonds (popularly known as ‘Masala Bonds’) before the 1st day of July, 2020. This provision is retrospectively effective from 01.04.2016.

Benefit of Form 15G/15H for commission payments specified under section 194D (w.e.f. 01.06.2017)

In terms of the proposed amendment, benefit of non-deduction of tax by providing declaration in Form 15G/15H to the effect that there would be nil tax on total income after including such income, has now been extended to income in the nature of insurance commission.

Meaning of persons as mentioned in sub-section (1F) of section 206C (w.e.f. 01.04.2017)

In terms of the proposed amendment, new clause (iii) is to be inserted in Explanation to section 206C to provide that ‘buyer’ in terms of sub- section (1F) (relating to sale of motor vehicles having value exceeding Rs.10 Lakhs) does not include the following persons:

- Central Government, State Government, Embassy, High Commission, legation, commission, consulate and the trade representations of a foreign State;
- Local authority as defined in Explanation to clause (20) of section 10; or
- Public sector company which is engaged in the business of carrying passengers.

Requirement of furnishing PAN by the collectee in the case of TCS (w.e.f. 01.04.2017)

Under the existing provisions of the Act, there is no provision which mandates necessary quoting of PAN by the persons making payment of any amount on which provisions of section 206C of the Act apply.
As a consequence, the collectee who does not furnish PAN or furnishes incorrect PAN still remains outside the ambit of tax authorities.
In order to prevent leakage of tax, it is proposed to insert section 206CC to provide for necessary furnishing of valid PAN by collectee failing which the tax shall be collected at the higher of the following rates:

twice the rate specified in the relevant provision; or
5%

4. If the declaration becomes invalid at a later stage, then, TCS shall be collected at the rates specified in section 206CC.

5. PAN of the collectee is to be mandatorily quoted by the buyer and the seller in all correspondences, bills, vouchers and other documents sent to each other.

6. In case valid PAN is not provided to the collector, no TCS certificate shall be issued to the collectee.

No TCS on purchase of jewellery

Under the existing provisions of section 206C of the Act, tax is required to be collected at source by the seller @ 1% from the buyer of jewellery, if sale consideration exceeds Rs.5 lakhs.
In view of proposed insertion of section 269ST and 271DA prohibiting cash transaction exceeding Rs.3 lakhs, it is proposed amend section 206C to omit the requirement of collecting TCS on sale of jewellery.

Vaish Associates Advocates

(Corporate, Tax and Business Advisory Law Firm)

Tuesday, February 7, 2017

income tax slab rates for ay 2018-19

new income tax slab rates for ay 2018-19/fy 2017-18 for individual, senior citizen and super senior citizen

General Person earning INR. 2.5 lakh annually has been exempted from paying taxes, while those having income upto INR. 5 lakh will be charged income tax at 5 % (earlier 10%).
Senior Citizen (60 - 79 years) earning INR.3 lakh annually has been exempted from paying taxes.
Super Senior (80 years above) earning INR.5 lakh annually has been exempted from paying taxes.
surcharge of 10% will be levied on people with annual income between INR. 50 lakh to INR. 1 crore.
surcharge of 15% will be levied on people with annual income above Rs 1 crore.

NOTE:
Rebate - maximum of Rs.2,500 from the tax payable would be admissible under section 87A of the Act to those individuals whose total income does not exceed Rs. 3,50,000 p.a.

IMPORTANT POINTS

Tax exemption on partial withdrawal from NPS (w.e.f. 01.04.2018)

Section 10(12A) provides that payment from National Pension System (NPS) trust to an employeeon closure of his account or opting out shall be exempt upto 40% of total amount payable to him.
Sub-section (2) of section 20 provided in Chapter VI of the Pension Fund Regulatory Development Authority Act, 2013, permits withdrawals, not exceeding twenty-five per cent of the contribution made by the subscriber, from the individual pension account subject to certain conditions specified by the regulations, such as purpose, frequency and limits.
Such partial withdrawals are presently not exempted from tax under the Act.
In order to provide further relief to the employee subscriber, clause (12B) is proposed to be inserted to provide exemption in respect of aforesaid partial ithdrawals, to the extent of 25% of the original contribution, made by the employee in accordance with the terms and conditions specified under Pension Fund egulatory Development Authority Act, 2013 and regulations made thereunder

Enhancement of limit of deduction under section 80CCD (w.e.f. 01.04.2018)

Under the existing provisions of section 80CCD (1) of the Act, an individual, not under any employment, is allowed deduction in respect of amount deposited in a previous year in his account under a notified pension scheme provided the same does not exceed 10% of his gross total income.
It has now been proposed to enhance the above limit from 10% to 20% of the gross total income.
It is, however, to be noted that the amount of deduction allowable under sub section (1) of this section shall not exceed Rs.1.50 lacs.

Phase out of deduction under section 80CCG (w.e.f. 01.04.2018)

Under the existing provisions of section 80CCG, deduction upto ` 25,000 is admissible to an individual investor who invests in specified listed equity shares or units of equity oriented fund, subject to conditions specified therein. The said deduction is available for 3 consecutive assessment years starting from the year of initial investment.
It is now being proposed that deduction under section 80CCG shall be phased out and shall not be available in respect of amount to be first invested during assessment year 2018-19 and onwards.
Grand fathering provisions are, however, provided in respect of initial investment made during the assessment year 2017-18 or prior thereto.

Rationalization of rebate under section 87A (w.e.f. 01.04.2018)

It is proposed that amount of rebate admissible under section 87A of the Act shall be reduced from Rs. 5,000 to Rs.2,500 and shall be available to a resident individual assessee having gross total income of upto Rs. 3.50 lacs (as against Rs.5 lacs earlier)

VAISH ASSOCIATES, ADVOCATES
NEW DELHI, MUMBAI, BENGALURU

Individual, being a resident in India, who is of the age of 60 years or more but less than 80 years at any time during the previous year

(1) where the total income does not exceed Rs. 3,00,000: Nil;
(2) where the total income exceeds Rs. 3,00,000 but does not exceed Rs. 5,00,000 : 5 per cent. of the amount by which the total income exceeds Rs. 3,00,000;
(3) where the total income exceeds Rs. 5,00,000 but does not exceed Rs. 10,00,000: Rs. 10,000 plus 20 per cent. of the amount by which the total income exceeds Rs. 5,00,000;
(4) where the total income exceeds Rs. 10,00,000 : Rs. 1,10,000 plus 30 per cent. of the amount by which the total income exceeds Rs. 10,00,000

Individual, being a resident in India, who is of the age of 80 years or more at any time during the previous year

(1) where the total income does not exceed Rs. 5,00,000: Nil
(2) where the total income exceeds Rs. 5,00,000 but does not exceed Rs. 10,00,000 : 20 per cent. of the amount by which the total income exceeds Rs. 5,00,000;
(3) where the total income exceeds Rs. 10,00,000 : Rs. 1,00,000 plus 30 per cent. of the amount by which the total income exceeds Rs. 10,00,000.

Surcharge on income-tax

The amount of income-tax computed in accordance with the preceding provisions of this Paragraph, or the provisions of section 111A or section 112 of the Income-tax Act, shall be increased by a surcharge for the purposes of the Union, calculated, in the case of every individual or Hindu undivided family or association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Income-tax Act,—

(a) having a total income exceeding fifty lakh rupees but not exceeding one crore rupees, at the rate of ten per cent. of such income-tax; and
(b) having a total income exceeding one crore rupees, at the rate of fifteen per cent. of such income-tax:

Provided that in the case of persons mentioned above having total income exceeding,—

(a) fifty lakh rupees but not exceeding one crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax on a total income of fifty lakh rupees by more than the amount of income that exceeds fifty lakh rupees;
(b) one crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax and surcharge on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees.

Co-operative society

(1) where the total income does not exceed Rs. 10,000 : 10 per cent. of the total income;
(2) where the total income exceeds Rs. 10,000 but does not exceed Rs. 20,000 : Rs. 1,000 plus 20 per cent. of the amount by which the total income exceeds Rs. 10,000;
(3) where the total income exceeds Rs. 20,000 : Rs. 3,000 plus 30 per cent. of the amount by which the total income exceeds Rs. 20,000.

Surcharge on income-tax

The amount of income-tax computed in accordance with the preceding provisions of this Paragraph, or the provisions of section 11A or section 112 of the Income-tax Act, shall, in the case of every co-operative society, having a total income exceeding one crore rupees, be increased by a surcharge for the purposes of the Union calculated at the rate of twelve per cent. of such incometax:

Provided that in the case of every co-operative society mentioned above having total income exceeding one crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees.

In the case of every firm

On the whole of the total income: 30 %

Surcharge on income-tax

The amount of income-tax computed in accordance with the preceding provisions of this Paragraph, or the provisions of section 111A or section 112 of the Income-tax Act, shall, in the case of every firm, having a total income exceeding one crore rupees, be increased by a surcharge for the purposes of the Union calculated at the rate of twelve per cent. of such income-tax:
Provided that in the case of every firm mentioned above having total income exceeding one crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees.

In the case of a Company

(i) where its total turnover or the gross receipt in the previous year 2015-16 does not exceed fifty crore rupees: 25 per cent. of the total income;
(ii) other than that referred to in item (i) : 30 per cent. of the total income.

In the case of a company other than a domestic company

(a) royalties received from Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 31st day of March, 1961 but before the 1st day of April, 1976:

(b) fees for rendering technical services received from Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 29th day of February, 1964 but before the 1st day of April, 1976,

and where such agreement has, in either case, been approved by the Central Government: 50%

(ii) on the balance, if any, of the total income : 40%

Surcharge on income-tax
The amount of income-tax computed in accordance with the preceding provisions of this Paragraph, or the provisions of section 111A or section 112 of the Income-tax Act, shall, be increased by a surcharge for the purposes of the Union, calculated,

(i) in the case of every domestic company,

(a) having a total income exceeding one crore rupees but not exceeding ten crore rupees, at the rate of seven per cent. of such income-tax; and
(b) having a total income exceeding ten crore rupees, at the rate of twelve per cent. of such income-tax;

(ii) in the case of every company other than a domestic company,

(a) having a total income exceeding one crore rupees but not exceeding ten crore rupees, at the rate of two per cent. of such income-tax; and
(b) having a total income exceeding ten crore rupees, at the rate of five per cent. of such income-tax:

Provided that in the case of every company having a total income exceeding one crore rupees but not exceeding ten crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees:

Provided further that in the case of every company having a total income exceeding ten crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax and surcharge on a total income of ten crore rupees by more than the amount of income that exceeds ten crore rupees.

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