From June 1, your tax burden will increase with a host of new levies coming into force, which were announced in the Union Budget.
Cash purchase of goods, services over Rs 2 lakh to attract 1% tax
Payment in cash for buying goods and services worth more than Rs 2 lakh with the exception of jewellery will attract 1 per cent tax collected at source (TCS) from June 1. The existing TCS of 1 per cent on cash purchase of over Rs 5 lakh of jewellery and over Rs 2 lakh of bullion will continue. The Income Tax Department has been levying 1 per cent TCS on cash purchase of bullion in excess of Rs 2 lakh and jewellery in excess of Rs 5 lakh since July 1, 2012.
Higher Securities Transaction Tax (STT) on options
Sale of options will also attract increased Securities Transaction Tax (STT) of 0.05 per cent from June 1. Currently, STT is 0.017 per cent. Nithin Kamath, Founder & CEO, Zerodha, “Traders will be paying slightly higher amounts towards taxes starting 1st June 2016. There are two changes in taxes that traders should take note. One, owing to Krishi Kalyan Cess an additional 0.5% Service tax will be levied on Brokerage and Transaction charges. This will take the existing service tax rate from 14.5% to 15%. Second, for Option traders specifically, the Security Transaction Tax (STT) will be increased to 0.05% from the existing 0.017%. However, we do not see the increase in taxes as a deterrent to option trading volumes.”
Service tax and Krishi Kalyan Cess
With the imposition of Krishi Kalyan Cess (KKC), the total incidence of service tax will increase to 15 per cent, thus making restaurant bills, mobile phones, cinemas, visits to beauty parlours, air travel, insurance, DTH, credit and debit cards, courier, healthcare, banking and professional consultancies costlier. Those travelling in AC coaches of trains will now have to shell out more from June 1, with the imposition of ‘Krishi Kalyan’ cess of 0.5 per cent on service tax. The service tax is not applicable to non-AC and Sleeper class travel.
Tax Collected at Source (TCS) on cars above Rs 10 lakh
For people buying cars with a price tag of over Rs 10 lakh will have to pay 1 per cent TCS Cess as announced in Budget. Car Buyer will give additional 1 per cent in form of TCS (Tax Collected at Source) computed on ex-showroom price.
Black money declaration
The 4-month Income Declaration Scheme provides one time opportunity to domestic black money holders to come clean by paying tax and penalty of 45 per cent on such assets will open from June 1. However, the scheme is not meant for those who have earned money through corruption.