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1. Rebate under section 87A has been increased from Rs.

2,000 to Rs,
5,000. This rebate is available to taxpayers having income below Rs.
2. Taxpayers who do not own any house property, are living in a rented
premises and who do not receive any HRA (House Rent
Allowance)from their employers, will get an increased deduction of Rs.
5,000 per month (Earlier Rs. 2,000 per month) under section 80GG of
the Income Tax Act.
3. The turnover limit to avail the Presumptive Tax Scheme under
section 44AD, has been increased from Rs. 1 crore to Rs. 2 crore. The
taxpayers carrying a business will be allowed to avail this scheme for which
they will have to declared profits at minimum 8% of the total turnover and
they will be exempted from the requirement of maintaining any books
of accounts.
4. Earlier the Presumptive Tax Scheme under section 44AD was
available only to individuals carrying a business. With effect from 1st april
2016, the benefits of this scheme has also been extended to the
Professionals whose annual turnover does not exceed Rs. 50,00,000,
provided the declared profits from such profession are not less than 50%.
The professional availing these scheme will be exempted from
maintaining any books of accounts.
5. For the first time home buyers, additional deduction of Rs. 50,000
annually will be allowed under section 80EE for interest payments
towards loans taken up to Rs. 35 lakhs. The value of the house should not
exceed Rs. 50 lakhs.
6. Any amount withdrawn from NPS (New Pension Scheme) at the time of
retirement will be exempted up to 40% of the total Withdrawal amount.
7. Any gains resulting from trading of securities of unlisted firms would
be long term capital gains if the period of holding of such securities is 24
months or more. Earlier the holding period requirement was 36 months.
8. Earlier the recipient of the dividend income did not have any onus to pay
the tax as the company already paid Dividend Distribution Tax
(DDT) on such dividend. Now with the budget proposals, any person, HUF
or firm who receives dividend more than Rs. 10 lakhs need to pay 10% of
such dividend income.
9. The surcharge on the income tax of an assessee who earns an income of
Rs. 1 crore or more, was 12%. The said surcharge has been increased to 15%
in this budget

2017 positives

1) Tax relief

Finance Minister Arun Jaitley slashed the tax rate of individuals earning
between Rs 2.5 lakh to Rs 5 lakh to 5% from the current 10% in this budget. It
translates into an additional benefit of Rs 12,500 for taxpayers even beyond Rs
5 lakh.
The combined effect of both these measures will mean that there would be zero
tax liability for people getting income upto Rs 3 lakh per annum and the tax
liability will only be Rs 2,500 for people with income between Rs 3 to Rs
3.5 lakh.

If the limit of Rs 1.5 lakh under Section 80C for investment is used fully, the tax
would be zero for people with income of Rs 4.5 lakh.

2) Service charges on IRCTC e-tickets withdrawn

Service charges on e-tickets booked through IRCTC will be withdrawn. As of

now, Rs. 40 on every ticket booked in air-conditioned classes and a service
charge of Rs. 20 on every ticket booked in sleeper class is levied by the IRCTC
when a ticket is booked through its website.

3) Goods and Services


> Booking railway tickets online

> RO membrane elements for household usage
> Solar tempered glass used in solar panels
> Fuel cell based power generating systems
> Wind operated energy generator
> Vegetable tanning extracts used in making leather products
> POS machines card and fingerprint readers
> Group insurance for Defence services.

> Cigarettes, pan masala, cigar, cheroots, bidis, chewing tobacco
> LED lamp components
> Cashew nuts (roasted and salted)
> Aluminum ores and concentrates
> Polymer coated MS tapes used in manufacturing of optical fibres
> Silver coins and medallions
> Printed circuit board used in making mobile phones

4) Simplification of I-T filing

Finance Minister also said that a simple one-page form to be filed as income tax
return for the category of individuals having taxable income of upto Rs 5 lakh
other than business income.

Also, a person, who falls in this category and files income tax -return for the
first time, would not be subjected to any scrutiny in the first year unless there is
specific information available with the department regarding his high-value

5) Tax relief on capital gains in real estate

The holding period for Capital gains on the sale of immovable property - land
and building - to qualify as long-term capital gains is proposed to be reduced to
2 years from 3 year

2018 positives

Increase in tax exemption limit from Rs 2.5 lakh

to Rs 3 lakh
In Budget 2017 there was a tweak in the tax rate. The 10% Income Tax rate
went down to 5% and there was also a talk about bringing down the rates for
domestic companies from 30% to 25% in the next few years. Surabhi Marwah
of EY says, “There could be some change, some measures are expected.
When we read and talk about tax rates there is a feeling that the lower the tax
rate the more you attract people to pay taxes but at the same time one must
realize that about 95% of our taxpayers are in the lowest category so the
game would be to see how we can benefit the common man and also the
government. So one way could be to increase basic exemption limit from Rs
2.5 lakh to Rs 3 lakh. The other thing is we don’t have the 10% slab anymore.
There is a wide gap between the 5% and 20% and maybe a slab in the middle
may be introduced. This will encourage people to pay more taxes and at the
same time enable the government not to reduce its tax base; hence, some
sort of changes may be there but not at a very great level because the tax
collections are something that also has to be looked at and kept at a steady
A tax survey by Deloitte says, “In an attempt to incentivize savings and to
reduce the tax burden on the middle class, the Government should consider
offering further tax rebates in the Budget 2018-19. A reasonable reduction in
the existing personal tax rates would bring cheers to the taxpayers especially
in the wake of rising inflation and reducing purchasing power.”
A report by SBI said, “Due to 7th pay commission, the personal disposable
income has been increased, so we believe there is a need to raise the
exemption limit to Rs 3 lakh. Due to such increase in limit, around 75 lakh tax
payers will be exempted from income tax.”
After Budget 2018 will your income tax go up or down? Find out with
this Income Tax calculator
Change in Section 80C limit. FM Jaitley may
increase limit to Rs 2 lakh or Rs 2.5 lakh.
Though Section 80C limit was changed about 3 years back and is currently at
Rs 1.5 Lakhs, it will be a positive move if the limit is raised from Rs 1.5 lakh to
at least Rs 2 lakh in the Union Budget 2018. Amar Ambani, Partner & Head of
Research, IIFL said, “On personal income tax rates, the government would
provide relief to tax payers who had to face a difficult time during the
demonetization disruption span. We can expect some extra benefit under
Section 80C, apart from the raising of individual-specific tax slabs.”
HDFC Securities in a note said, “On the taxes front, we expect raising of
exemption limits for individuals from Rs.2.5 lacs currently to Rs.3 lacs, Period
of holding for LTCG being raised from the current 1 year to 2 (in line with
immovable property) or 3 years, Deduction u/s 80CCF may be reintroduced
for investment in Infra bonds. Some plugging of loopholes like bonus stripping
may be undertaken.”