Kindly make a note of the following changes in Income Tax law that come into effect from 1-4-2017 –

• Non-Filing of Income Tax Return in time will attract late fee

Non-filing of Income Tax Return within due date from FY 2017-18 will attract a late fee of Rs.5000 for delay up to 31st December and Rs. 10,000 after that.

• Donations more than Rs 2000 will not be allowed in cash.

Donations made exceeding Rs.2000 will not be eligible for deduction under section 80G unless these are made using modes other than cash.  Consequently, trusts accepting 80G donations may advise their donors to give donations exceeding Rs.2000 vide cheque / RTGS / digital modes.

• Sale of Unquoted shares to be taxed at (deemed) fair value.

• Quoting of Aadhar No. is mandatory on or after 1st July 2017.

Every person who is eligible to obtain AADHAR number should quote such number, on or after 1 July 2017, in the Return of income. Furthermore, every person who has been allotted PAN as on 1st July 2017 must intimate the AADHAR number to the Tax Authority, failing which, PAN allotted to such person shall be deemed to be invalid.  Kindly note that linking of AADHAR with PAN is not possible unless name as per AADHAR and PAN match perfectly.  Hence, please take steps to rectify your name as per AADHAR to match as per PAN.

• Payment made in cash for revenue and capital expenditure would be added back.

Limit for payment of expenses by cash (both, capital and revenue expenditure) reduced from Rs.20000 to Rs.10000 per day in aggregate per person.  Capital expenses paid in cash beyond the said limit will not be taken into account for depreciation purposes.  However, the cash payment limit for lorry freight etc. remains the same at Rs.35000.

• Penalty u/s 269ST will be levied in case any person has received an amount of Rs 2 lac or more [Earlier Rs 3 lac or more] 

No person shall receive an amount of two lakh rupees or more, by cash (Sec. 269ST) —

(a) in aggregate from an individual in a day; or

(b) in respect of a single transaction; or

(c) with regard to transactions relating to one event or occasion.

The penalty for violation of above is to be a sum equal to the amount of such receipt.

• Now, there is no penalty for non-collection of TCS on cash sales exceeding Rs 2 lac.

Given the newly introduced above said penal provisions relating to cash sales, the existing provisions (in vogue from 1.6.2016) relating to the collection of TCS @ 1% on cash sales exceeding Rs.2 lakhs (Rs.5 lakhs, in the case of jewelry) are deleted.  Consequently, there is no need to collect TCS on cash sales exceeding Rs.2 lakhs.  Straight away it will attract equal amount penalty now.

• Under presumptive taxation, now there are 2 rates i.e., 6% and 8%.

For below Rs.2 crores turnover cases –

1. For Non-Cash Sales (through Digital, Online, cheque, Bank, etc. Net Profit will be taken as 6% of Turnover/Gross Receipt.
2. For Cash Sales: Net Profit will be taken as 8% of Turnover/Gross Receipt.

• Payment of Rent – Rs.50,000 per month by any Individual or HUF (not subject to Tax Audit requirements) – deduct TDS @ 5%.

• Change in Base Year and periodicity of long-term capital gain

1. Periodicity for long term Capital Gain is reduced from 3 years to 2 years.
2. Base year shifted from 01.04.1981 to 01.04.2001 for all assets including Immovable property.

• Reduction in corporate tax rate

The corporate tax rate for the accounting year 2017-18 for companies with annual turnover up to Rs. 50 crores (in the account year 2015-16) is reduced to 25%.  No change in a firm tax rate of 30%.