Budget 2017 Highlights and Tax Update

The Big Budget is out today, putting an end to a lot of speculations. Here are the highlights of this year’s proposed budget 2017 and for the benefit of our clients, we have bifurcated the proposals relevant for salaried class.

Budget 2017, Proposals relevant for salaried class

Personal tax rates

1. Income Tax rate for annual income between Rs.2.5 Lakh to 5 Lakhs reduced to 5% from 10%
2. Surcharge @10% if net income exceeds 50 Lakhs and up to Rs.1 crore subject to Marginal Relief.
3. Surcharge @15% if net income exceeds Rs.1 crore subject to Marginal Relief.
4. Rebate under Section 87A continues for a resident individual (whose income does not exceed 3.5 Lakhs). The amount of rebate is 100% of income tax calculated before education cess or Rs.2500 whichever is less.

Other Major Proposals of Budget 2017 

1. The holding period for Long Term Capital Gains on sale of immovable property is proposed to be reduced to 2 years from 3 years.
2. Capital gains: Base year for indexation has been shifted from 1.4.1981 to 1.4.2001.
3. Limit for Cash transactions is fixed at Rs.3 lakhs.
4. Single page return for individuals having income of Rs.5 lakhs or less excluding business income.
5. No income tax scrutiny in the FIRST year of filing of income tax return.
6. MAT credit can be carry forward for 15 years.
7. Corporate tax rate for small companies having turnover up to Rs.50 crores has been reduced to 25% from 30%.
8. Presumptive taxation rate u/s 44AD shall be reduced to 6% for non- cash turnover.
9. Limit for cash expenses has been reduced to Rs.10000 from Rs.20000 u/s 40A(3).
10. Threshold limit to maintain Books of Accounts for individual and HUF shall be increased to Rs.25 lakhs from 10 Lakhs of turnover and from profit of Rs.1.2 Lakh to Rs.2.5 lakhs.
11. Time limit for scrutiny order reduced to 18 months for AY 2018-19 and 12 months from AY 2019-20 as against 21 months presently.

Disclaimer: Relevant Budget 2017 proposals presented by Finance Minister before the Parliament are summarized above. The proposals are subject to amendments as the Finance Bill is yet to be passed by the Parliament. This document is not an offer, invitation or solicitation of any kind and is meant for use of clients and Company/firm’s personnel only. DKM accepts no responsibility for any loss caused by person relying on it.

Read detailed Summary of Budget 2017 here.