1. Six things Finance Minister did not tell you in Budget 2017

Six things Finance Minister did not tell you in Budget 2017

While we all intently listen to each and every word that the finance minister spells out in his Budget speech, there is more to the Union Budget proposals than what meets the eye…err ears. If you missed out on the speech, there are many ways to listen to it again.

Updated: February 9, 2017 3:21 PM
Here are a few things that affect you, however, have been hidden in detail. We dug up these exclusively for you from the Finance Bill, 2017. Here are a few things that affect you, however, have been hidden in detail. We dug up these exclusively for you from the Finance Bill, 2017.

By Vaibhav Sankla

The God, as they say, is in the details. While we have read the immediate analysis of the Budget speech, there is more to the Budget proposals. Read more to find what impacts you.

While we all intently listen to each and every word that the finance minister spells out in his Budget speech, there is more to the Union Budget proposals than what meets the eye…err ears. If you missed out on the speech, there are many ways to listen to it again.

Here are a few things that affect you, however, have been hidden in detail. We dug up these exclusively for you from the Finance Bill, 2017.

Exemption on partial NPS withdrawal
The Budget proposes to exempt partial withdrawals from the National Pension System (NPS) of upto 25% of the contribution from taxes. This is applicable to employee subscribers and will be in effect starting April 1,2018. Note that as per NPS rules partial withdrawals are only permitted for certain emergencies and serious illnesses and can be made only thrice after 10 years of being an NPS subscriber.

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Discontinuation of RGESS
A deduction of upto Rs 25,000 (50% of invested amount) was permitted under section 80CCG for three consecutive assessment years to those, who earned less than Rs 12 lakh and had never made investments in listed equity shares or specified equity-oriented funds subject to fulfilment of certain conditions. The Budget 2017 proposes to withdraw this deduction offered as Rajiv Gandhi Equity Savings Scheme since 2012 under section 80CCG with effect from assessment year 2018-19. But if an investor has claimed deduction under RGESS for assessment year 2017-18 and prior, then he/she can claim the deduction until assessment year 2019-20 (three consecutive years).

Penalty on delayed returns
Since the government is striving to fastrack processing returns and refunds, returns need to be filed within the due date. To discourage delayed returns, the government has proposed to levy a penalty for delayed returns starting assessment year 2018-19. A fee of Rs 5,000 would be payable, if the return is furnished after the due date but on or before December 31 of the assessment year. The fee would be doubled to Rs 10,000 for further delay. A relief in terms of reduction in penalty amount to Rs 1,000 has been offered to those filing delayed returns and having total income below Rs 5 lakh.

Income from other sources
The budget provisions also propose to charge any sum of money or any property (including immovable property, jewellery, shares, paintings, etc.) received by any person without consideration or for inadequate consideration in excess of Rs 50,000 to income-tax in the hands of the resident under the head “Income from other sources”. Further amendments have been proposed for determining the cost of acquisition.

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PAN
The budget proposes to mandate doubling of the tax collection at source (TCS) rate or charge it at the rate of 5% if the person paying any sum or amount liable to TCS doesn’t provide his Permanent Account Number (PAN). To avoid discrepancies in the tax credit, quoting of PAN has been mandated in all correspondence, bills and vouchers exchanged between the collector and collectee. NRIs who do not have permanent establishments in India have been exempted from the PAN provisions.

Interest on refund due to the deductor
According to the existing Section 244A, interest is payable on the refund amount due to an assessee on account of excess payment of advance tax, TDS, TCS, etc.

The deductor of TDS does not currently receive any interest for any excess deposits of TDS that he makes. Budget 2017 proposes that wherever there is a refund of TDS due to the deductor, he shall be entitled to receive simple interest on such refund, calculated at the rate of 0.5% per month or part of the month, for the period beginning from the date on which claim is made and ending on the date on which refund is granted.
(The author is Managing Director, H&R Block India)

  1. Babau Ram Vishvakarma
    Feb 9, 2017 at 10:39 am
    Excess deduction of tax from the ry / pension should be given interest while refund is made.Alternatively govt.should issue an instruction to the tax deducting organisations that they must adhere to limit of tax amount.. This will reduce load on the tax-department..
    Reply
    1. R
      RAMESH
      Feb 9, 2017 at 10:18 am
      good
      Reply

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