Finance Act 2016 Amendments in Income Tax Laws applicable for Assessment year 2017-18 on wards. Major Amendments for Individuals, Companies and Changes in TDS and TCS Provisions etc

1. CA Janardhana Gouda
Mob: 97 31.03.2014
ca.gouda@gmail.com

2. Individuals
 Rate of surcharge in case of individual, HUF, AOP or BOI,
increased from 12% to 15% if the total income exceeds Rs. 1
crores.
 Increase in the rebate from tax u/s 87A from existing
Rs.2,000/- to Rs.5,000/- from the amount of income tax
payable by resident individual whose total income does
not exceed Rs. 5 lacs.

3. Other Assessees
Corporate tax rate in case of domestic company whose
turnover or gross receipts in the previous year 14-15 does
not exceed Rs.5 crores is reduced from 30% to 29%.
Increase in threshold limit for audit for persons having
income from profession:
Presently, every person carrying on a profession is
required to get its accounts audited if the gross receipts in
a previous year exceed Rs. 25 lacs. Now It is enhanced to
limit of Rs. 50 lacs.

4. Other AssesseesOther Assessees Contd..
115BA is inserted from A.Y. 17-18 to tax domestic
companies at 25%, at their option, if following conditions
are satisfied:-
 company has been registered on or after 01.03.2016
 engaged in the business of manufacture or production of article or
thing
 it has not claimed any benefit u/s 10AA, benefit of accelerated /
additional depreciation, investment allowance, expenditure on
scientific research and any deduction in respect of certain income
under Part-C of Chapter-VI-A other than the provisions of section
80JJAA; and
 option is furnished in the prescribed manner before the due date of
furnishing of return of income.

5. TDS ProvisionsTDS Provisions
Changes in the threshold limit
Section Existing limit
(Rs.)
Revised Limit
(Rs.)
192A 30,000 50,000
194BB 5,000 10,000
194C 75,000 1,00,000
194LA 2,00,000 2,50,000
194D 20,000 15,000
194G 1,000 15,000
194H 5,000 15,000

6. TDS ProvisionsTDS Provisions contd..
Revision in the rates of deduction of tax at source
Section Head Existing
rate
Revised
rate
194DA Payment of Life Insurance
Policy
2% 1%
194EE Payment in respect of NSS
Deposits
20% 10%
194D Insurance commission 10% 5%
194G Commission on sale of lottery
tickets
10% 5%
194H Commission or brokerage 10% 5%

7. TCS on sale of vehicles, goods or services
206C amended to provide that seller shall collect tax
@1% on
(a)sale of motor vehicle of the value exceeding Rs.10 lacs
(b)sale of any goods (other than bullion & jewellery) or
providing of any service in cash exceeding Rs. 2 lacs.

8. Presumptive taxation for professionals
New Section 44ADA
 Assessee is not be required to maintain books of accounts u/s
44AA and gets the accounts audited u/s 44AB unless it claims
that the profit and gains from the profession is lower than the
deemed profit and gains
Conditions:
 Total Gross receipts should not exceed Rs. 50 lacs.
 Income shall be estimated @ 50% of the total gross receipts.
 Deductions u/s 30 to 38 deemed to have been allowed (Including
interest and remuneration to partners in case of partnership firm).

9. Other Amendments
Presumptive taxation for persons having income from
business :
• Increase in the threshold limit from Rs.1 crores to Rs.2 crores
• expenditure in the nature of salary, remuneration, interest paid to
partners shall no longer be allowed
• where an eligible assessee declares profit for any previous year in
accordance with provisions of this section and he declares profit for
any of the 5 consecutive A.Y.s succeeding such P.Y. not in accordance
with provisions of this section, he shall not be eligible to claim the
benefit of provisions of this section for 5 A.Y.s subsequent to A.Y. in
which profit has not been declared in accordance with provisions of
this section.

10. Installment of advance tax and
due dates
Section 211(1) is amended to provide that advance tax will
be paid in four installments of 15%, 45%, 75% and 100% of
tax payable on the current income by 15th June, 15th
September, 15th December and 15th March, respectively in
case of all assesses.
Assessees covered u/s 44AD are to pay advance tax of the
whole amount in one installment on or before the 15th
March of the financial year consequent upon raising of the
turnover limit from Rs.1 crore to rs.2 crore.

11. CA Janardhana Gouda
ca.gouda@gmail.com
Mob: 97 31.03.2014