TEN THINGS TAXPAYERS SHOULD KNOW

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TEN THINGS TAXPAYERS SHOULD KNOW

 TEN THINGS TAXPAYERS SHOULD KNOW

  • With a decrease in tax rate from 10% to 5% for total income between ₹ 2.5 lakh and ₹ 5 lakh, there is tax saving of up to ₹12,500 per year.
  • Due to the combined effect of change in tax rate and rebate, an individual with taxable income of ₹3.5 lakh will now pay tax of ₹2,575 instead of ₹5,150 earlier
  • Surcharge@ 10% of tax levied on rich taxpayers, with income  between ₹50 lakh and ₹1 crore. The rate of surcharge for the super rich, i.e. income above ₹ 1 crore, will remain 15%..
  • Holding period for immovable property to be considered “long term” reduced to two years from three. This will ensure immovable property held beyond two years is taxed at reduced rate of 20% and eligible for various exemptions on re investment.

  • Long term capital gains tax will result in a lower payout owing to beneficial amendments. The base year for indexation of cost  (adjustment of inflation) has been shifted to April 1, 2001 from April 1, 1981. This means lower profits on sale.
  • Tax exemption will be available on reinvestment of capital gains in notified redeemable bonds (in addition to investment in REC bonds and NHAI).
  • A simple one-page tax return form is to be introduced for individuals with taxable income up to ₹5 lakh (excluding business income).
  • Delay in filing tax return for 2017-18 will attract penalty of ₹5,000 if filed by Dec 31, 2018 and ₹10,000 if filed later. Such fee will be restricted to ₹1,000 for small taxpayers with income up to Rs.5 lakh.
  • 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in listed equity shares or listed units of equity-oriented fund under the Rajiv Gandhi Equity Savings Scheme is withdrawn from 2017-18.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 01.04.2017, he/she shall be allowed to avail a deduction for the next two yea₹
  • Time period for revision of tax return cut to one year (from two years) from the end of the relevant Financial Year or before completion of assessment, whichever is earlier.

 

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