Benefits of Tax filing for Individuals from Indian Union Budget 2017

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June 17, 2017

Benefits of Tax filing for Individuals from Indian Union Budget 2017

Income Tax Returns & benefits of Tax filing from Indian Union Budget 2017


The Indian Union Budget 2017 was released with an optimistic view on 1ST February 2017 by Finance Minister Arun Jaitley.


The below are the facts and impacts of the budget on all of us as “INDIVIDUALS”

Taxation Aspect

1.      Tax rate changes : After much anticipation and many guesses and finger crossing, the rates on income tax deduction were brought down.

Income Slabs

This change will impact every individual whose income is more than Rs.2.5 lac. On a common basis any person earning more than Rs. 5 Lac will save Rs.12500 each year.

2.      Tax rebate under section 87A:

Also the to cover up the losses of providing lower rate of tax, the tax rebate under section 87A has been proposed to be amended as: The individual whose taxable income is less than Rs. 3.5 Lacs will get a rebate of Rs.2,500 from their tax liability. (Earlier the provision was to provide the tax rebate of Rs.5000 for individual earning income less than Rs.5 lac, this provision would be deleted)

3.      Surcharge: For individuals who are earning income of more than Rs. 50 Lacs but less than Rs. 1 Crore an additional surcharge of 10% has been proposed to be levied on the said income.

The 15% surcharge on individuals whose incomes exceeds Rs. 1 Crore will continues to apply.

4.      Income Tax Returns As every individual earning income and paying tax needs to submit Income tax returns. Government is all set to introduce one pager income tax return document for all the individuals whose income is less than Rs.5 Lac.

Also to ensure every individual files their income tax return on time, there is a proposal to levy penalty on delayed returns. Thus any individual filing their return after 31st July, the individual will have to penalty ranging from Rs.1000 to Rs.10000 based on the income stated in their income tax returns.

5.      Exemption under Chapter VI A As employed individuals have many company scheme (like reimbursement, allowances, etc) to claim additional benefit of income tax exemption. Whereas these benefits are not available with the self-employed individuals. In order to provide parity between an individual who is an employee and an individual who is self-employed, it is proposed to provide that the self-employed individual shall be eligible for deduction up to 20% of his gross total income in respect of contribution made to National Pension Scheme under section 80CCD (1). (Currently the limit is of 10% of total gross income for both individuals)

6.      Income from house Property In case of let out property or deemed let out property, currently under section 24, an individual can claim full payment of the interest for the year against income from salary or any other head of income. Now the government has proposed to restrict the benefit of claim of interest paid on home loans in a year to Rs.2 Lac against any other source of income. The unclaimed interest can be carry-forwarded to 8 years and can be adjusted against only income from house property.

7.      Capital Gains: Currently long term capital gains on immovable assets are calculated based on 3 years. Now the government has proposed that, any immovable asset held for 2 years and more then any profit earned on the sale of same would be termed as Long term capital gain.

 

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