Highlights of budget 2017

Highlights of
Union Budget
Rajesh Raj Gupta And Associates 1

HIGHLIGHTS OF BUDGET 2017:- TRUST AND OTHER PROVISIONS.
• Applicable from 01/04/2018
• Corpus donation given by exempt entity to another exempt entity will not b
treated as application of income.
Section 11
• Fresh registration within 30 days in case of change/modification in object of
the trust.
Section 12
• The rate of tax will be 25% for the Small Companies which have turnover
upto Rs. 50 crores.
Tax Rates

HIGHLIGHTS OF BUDGET 2017:- HOUSE PROPERTY & BUSINESS
INCOME PROVISIONS
• If the immovable property held as stock in trade by real estate developer
then the Annual Value of the same will be consider as NIL for the period of
one year from the end of financial year in which completion certificate
obtained provided the property has not been let out during the whole or part
of previous year.
Section 23
• Monetary restriction of set off of House property loss of Rs. 2 Lakhs from other
head of income.Section 71
• For Banks
• Provision for doubtful debt deduction increased from 7.5% to 8.5%.Section 36
• Threshold limit of payment in cash reduced from Rs. 20,000 to Rs. 10,000
• ECS payment are also included in payment mode other than cashSection 40A

HIGHLIGHTS OF BUDGET 2017:- BUSINESS INCOME PROVISIONS
• Any expenditure incurred in cash exceeding Rs. 10,000 for
acquiring any asset shall not form part of cost of the asset.
• Accordingly depreciation will not be allowed u/s 32 or no
deduction will be allowed for such expenditure u/s 35AD in
case of specified business.
• Interest on NPA will be taxable on receipt basis for
cooperative bank.
• Interest on loan and advance from cooperative bank will be
allowed as deduction on payment basis.
• Kindly note cooperative societies excluded Primary
agriculture credit society and primary cooperative
agriculture and rural development bank.
Section43
Rajesh Raj Gupta And Associates
4

HIGHLIGHTS OF BUDGET 2017:- BUSINESS INCOME PROVISIONS
• Threshold limit for maintenance of books of accounts
enhanced. The income limit increased from 1.2 lakhs to 2.5
lakhs and gross receipts/sales/turnover limit increase from
Rs. 10 lakhs to Rs. 20 Lakhs.
• Applicable from 01/04/2017.
• No requirement of audit of person opting for presumptive
scheme u/s 44AD and turnover does not exceed Rs. Two
Crores.
• The rate of deemed total income reduced from 8% to 6%
for the receipts received through mode other than cash.
• The assesse opting presumptive taxation liable to pay
advance tax in one installment on or before 15th of March.
Section44
5

HIGHLIGHTS OF BUDGET 2017:- CAPITAL GAIN PROVISIONS
• Period of holding for computing Long Term Capital Gain reduced from
36 months to 24 months in case of immovable property.
• In case of Conversion of preference shares into equity shares, period of
holding of preference shares will also be considered while computing
period of holding of equity shares.
• Transfer of units from consolidating plan to consolidated plan after SEBI
Approval then period of holding of consolidating plan will also be
considered.
Section2(42A)
• Capital gain to individual or HUF on transfer of land or building or both
under specified agreement will be taxable in the previous year in which
completion certificate issued by the competent authority.
Section 45
6

HIGHLIGHTS OF BUDGET 2017:- CAPITAL GAIN AND INCOME
FROM OTHER SOURCES PROVISIONS
• Transfer of RDB outside India from NR to another NR not regarded as
transfer.
• Conversion of preference shares into equity share not regarded as transfer.Section 47
• Applicable form 01/04/2018
• Along with NHAI and RECI bonds, now purchase of other central government
specified bonds are eligible for exemption.Section54EC
• Change of base year from 1981 to 2001.
Section55
• Receipt of sum of money or any property without consideration by any person
in excess of Rs. 50,000 shall be consider as Income from other sources.
Section 56

HIGHLIGHTS OF BUDGET 2017:- DEDUCTION PROVISIONS
• Project Completion Period extended to 5 years from 3 years.
• Proposed size of house got increased due to measuring carpet area instead
of built up area.
• Municipal limit removed for development of house.
Section 80IB
• Extending the period for claiming deductions of three consecutive profits out
of seven years instead of three years by start-ups.Section
80IAC
• Donation exceeding 2000 instead of 10000 in cash is not allowed as
deduction.
Section 80G

HIGHLIGHTS OF BUDGET 2017:- DEDUCTION AND REBATE
PROVISIONS
• Contribution to NPS limit enhanced from 10% to 20%
• Kindly note the partial withdrawal according to terms and conditions specified
by regulatory authority not exceeding 25% of the contribution is exempt from
tax.
Section 80CCD
• Restriction on claiming deduction.
• Assessee already claiming the deduction can claim upto AY 2019-20.Section80CCG
• Tax rate for person covered under slab of Rs. 2.5 Lakhs to Rs. 5 Lakhs
reduced from 10% to 5 %.
• Maximum rebate Rs. 2500 instead of Rs. 5000
• Total income should not exceed Rs. 350000 instead of Rs 500000
• Surcharge @ 10% for individual having taxable income between 50 Lakhs
to Rs. 1 crore.
Section 87A

HIGHLIGHTS OF BUDGET 2017:- TRANSFER PRICING
PROVISIONS.
• Payment made to related party in section 40A(2)(b) is out of the purview of specified
domestic transactions.Section 92BA
• Secondary adjustment can be made by assesse provided as follows:-
• Primary adjustment is made suo motu by assesse; made by AO accepted
by assesse; as per advance pricing agreement; as per safe harbor rules;
any agreement entered u/s 90 or 90A after 01/04/2016.
• Amount of primary adjustment not to exceeds Rs. 1 Crore.
• If there is increase in income or reduction in loss then the excess money
available with AE’s should be repatriated within prescribed time otherwise
the same will be treated as advance and interest will be computed on the
same.
Section 92CE
• If Interest expenses more than 1 crore paid to AE, then it is allowed only 30% of
EBITDA or interest whichever is less.
• Disallowed interest can be c/f to eight AY.
• Not applicable for Banking and insurance business
Section 94B

HIGHLIGHTS OF BUDGET 2017:- SPECIAL TAX RATE PROVISIONS.
• Scope of dividend taxability extended to specified assesse i.e. all assesse
other than domestic company, Entities registered u/s 12AA and certain funds
u/s 10(23C)Section115BBDA
• Tax @ 10% on Income from transfer of Carbon Credit
Section115BBG
• Mat Credit Carried forward upto 15 AY’s instead of 10 AY’s
• Similar provision of CF of AMT for 15 years as per relevant section.
Section 115JAA

HIGHLIGHTS OF BUDGET 2017:- TDS PROVISIONS.
• TDS @ 5% on rent in excess of Rs. 50,000 per month or part of month.
• Deduction once in a year i.e. at the time of last payment of rent.
• No need to apply for TAN
• TDS @ 20% subject to rent of last month in absence of PAN of Landlord.
Section 194IB
• TDS @ 10% by developer paid to resident in lieu of Joint Development
Agreement.Section 194IC
• TDS rate reduced from 10% to 2% in case of assesse engaged in the business
of operation of call centre.Section 194J
• Enabled form 15G/15H filing for individual/HUF receiving insurance
commission.Section 197

HIGHLIGHTS OF BUDGET 2017:- TDS & TCS PROVISIONS.
• Non deduction of TDS in respect of exempt award or agreement as per Right to
Fair Compensation and Transparency in Land Acquisition, Rehabilitation and
Resettlement Act, 2013.
Section 194LA
• Extension of concessional tax rate of ECB from 01/07/2017 to 01/07/2020.
• Scope of concession tax rate extended to Ruppee Denomination Bond (RDB)
w.e.f. 01/04/2016Section194LC
• Extension of concessional tax rate of FII and QFI on investment in govt.
securities and RDB from 01/07/2017 to 01/07/2020.
Section 194LD
• TCS on cash sale of jewellery omitted.
• Exemption to specified buyers from TCS in case of sale of motor car
exceeding Rs. 10 Lakhs.
• TCS will be collected higher of twice the rate or 5% in the absence of PAN.
Section 206

HIGHLIGHTS OF BUDGET 2017:- RETURN AND ASSESSMENT
PROVISIONS.
• The time for revising the return will be upto end of the relevant AY.Section 139
• Issuance of Intimation u/s 143(1) is necessary prior to issuance of notice u/s
143(2).The AO can withhold the refund till assessment is made u/s 241A.Section 143
• Time limit for assessment u/s 143/144/153A reduced from 21 months
to 18 months for the AY 2018-19 and 12 months from AY 2019-20 and
onwards.
• Time limit for assessment order u/s 147 increased from 9 months to
12 months from AY 2019-20 and onwards.
• The time limit of fresh assessment in pursuance of order increased
from 9 months to 12 months from AY 2019-20.
• Where search initiated u/s 132 or requisition made u/s 132A after
01/04/2017, The AO had evidence that assesse escaped income >=
50 Lakhs then notice for assessment u/s 153A can be issued for the
years beyond sixth assessment year provided upto tenth assessment
year.
Section 153

HIGHLIGHTS OF BUDGET 2017:-FEE & PENALTY PROVISIONS.
• If return not filed within due dates u/s 139 then:-
• Fee of Rs. 5000 filed after due date but before 31/12.
• Fee of Rs. 10000 in any other case.
• If income does not exceed Rs. 5 lakhs then fee will be Rs. 1000
Section 234F
• Restriction on receipt of cash in excess of Rs. 3 Lakhs. However the same shall
not apply to Government, any banking company, post office saving bank or
cooperative bank.
• Transaction covered u/s 269SS
• Other may be notified by central government.
Section 269ST
• Penalty equal to amount received in contravention of section 269ST.
• However same will not be levied if good and sufficient reason provided to AO.Section 271DA
• Penalty of Rs. 10,000 on professional for furnishing incorrect particulars in statutory
report and certificate.
• No penalty if prove the sufficient and good cause.
• No power of CIT to levy penalty.
Section 271J

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