Important Income Tax Changes :
There are some important income tax changes that came into effect from April 1.
- There will a decrease in tax rate from 10 percent to 5 percent of Individuals having total income between 2.5 lakh and Rs.5 lakh.
- Individuals having income above Rs.1 Crore can save up to Rs.12,500 per years and 14,806 per year(including surcharge and cess).
- Surcharge at 10 percent of tax levied on rich taxpayers, with income between Rs. 50 lakh and Rs.1 Crore .The rate of surcharge for the super rich with income above Rs.1 Crore will remain 15 percent.
- Taxpayers with income up to Rs.3.5 lakh ,tax rebate is reduced to Rs.2500 and Rs.5,000 per year.Due to the combined effect of change in tax rate and rebate, an individual with taxable income of Rs.3.5 lakh will now pay tax of Rs.2,575 instead of 5,150 earlier.
- Long-term capital gains will result in a lower payout owing to beneficial amendments. The base year for indexation of cost has been shifted to April 1 ,2001 from April 1,1981.This means lower profit on sales.
- Holding period for immovable property to be considered “log term” reduced to 2 years from 3 years. This will ensure immovable property held beyond 2 years is taxed at reduced rate of 20 percent and eligible for various exemptions from reinvestment.
- Delay in filing tax return for 2017-18 will attract penalty of Rs.5,000 if filed by Dec 31,2018 and Rs.10,000 if filed later.Such fee will be restricted to Rs.10,000 for small taxpayers with income up to Rs.5 lakh.
- Furthur tax exemption will be available on reinvestment of capital gains in notified redeemable bonds.
- Deduction for first-time investors in listed equity shares or listed units of equity oriented fund under the Rajiv Gandhi Equity Savings Scheme is withdrawn from 2017-18.If an individual has already claimed deduction under this scheme before April1 ,2017, he/she shall be allowed to avail a deduction for the next two years.
- Time period for revision of tax return cut to one year from the end of relevant FY or before completion of assessment, which ever is earlier.