Finance Minister Arun Jaitley has announced a number of changes in the income tax during the Budget session of 2017. The Finance Bill passed in the Lok Sabha on Wednesday. The following are some of the changes that can be observed in the income tax changes:
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- The income tax rate for the slab of income from INR 2.5 lakhs till INR 5 lakhs has decreased from 10% to 5%.
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- The rebate amount gets reduced from INR 5,000 to INR 2,500 under Section 87A. For the income slab above INR 3.5 lakhs, no rebate will be applicable. Due to this change, about INR 7,700 will be saved for the taxable income between INR 3-5 lakhs and INR 12,900 will be saved for the taxable income between INR 5-50 lakhs.
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- For income between INR 50 lakhs to 1 crore, a 10% of surcharge will be applicable for individuals.
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- For taxable income up to INR 5 lakhs, only a single page needs to be updated for income tax filing.
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- The Rajiv Gandhi Equity Saving Scheme introduced in the Union Budget of 2012-13 will yield no deductions.
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- The IT department are given permissions to scrutinise about six years of previous records, who has undisclosed income and assets worth of about INR 50 lakhs.
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- The holding period of a property for claiming long term gains is reduced to two years from three years.
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- For rental payments above INR 50,000 per month, a 5% TDS will be deducted.
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- Partial withdrawals on the National Pension Scheme (NPS) will attract no tax. Up to 25% can be withdrawn for emergencies before retirement. On retirement, withdrawal of up to 40% will not attract tax.
- For applying new PAN card, it is necessary to hold a Aadhar number and for filing IT returns.
