The Union Budget 2017 document summarizes key changes announced in the Indian Union Budget of 2017 and their implications. Some of the major changes include reductions in income tax rates for individual income between 2.5 to 5 lakhs, a reduction in the income tax rebate amount, restrictions on cash transactions over 300,000 rupees, a 10% income tax surcharge for incomes between 50 to 100 lakhs, and reductions in the permissible amount for cash donations from 10,000 to 2,000 rupees. The budget also included exempting long term capital gains from equity investments from tax if securities transaction tax was paid, penalties for delayed income tax filings, and changes to long term capital gains holding periods and the

1. Union Budget 2017 Impact Analysis
Right Horizons

2. Union Budget 2016
Changes Announced Applicable To Implications
Reduction in Income Tax rates Individual
Taxation for Income between Rs.2.50 to Rs.5 lakhs is
- reduced to 5% from the present rate of 10%
Income Tax Rebate Individual
Where Income is less than Rs.3.5laks:
- Reduction in the rebate to Rs.2,500 from Rs.5,000
- Eligibility criteria reduced from Rs. 5 lacs to 3.5 lacs
Restriction on cash transactions Individual
Cash transaction is limited to
- Rs.300,000 with some exceptions
Income Tax Surcharge Individual
Where Taxable Income is between Rs.50laks to Rs.1cr
- Surcharge of 10% on the tax liability has to be paid
Reduction in cash donations Individual
Cash donation U/S 80G
- Permissible is Rs.2,000 (Rs. 10,000 previously)
Capital gains Investors
The long term capital gains on equity shares or equity-oriented
mutual funds transferred would be exempt from tax, if STT was
charged at the time of acquisition of such shares / units. This,
however, will not include cases of purchase where STT was not
applicable e.g. IPOs, FPOs, Bonus / Rights Issue, ESOPS ..
Penalty for delayed income tax returns Individual
Rs.5,000 would be the penalty if the returns are filed after the
due date but on or before Dec 31st of the Assessment Year
For any other case, the penalty would be Rs.10,000
However, if the total income is Rs.5 lakhs or less, the penalty
levied would not exceed Rs.1000

3. Union Budget 2016 - Continued
Changes Announced Applicable To Implications
Long Term Capital Gain and
Indexation
Investors
Reduction in the holding period for computing long term capital gains:
- To 2 years from 3 years
Change in the base year of Indexation:
to 1- Apr-2001 from 1-Apr-1981 for all classes of assets including
immovable property
Restriction on set-off of loss from
House property
Investors
Losses from the house property can be set off against other Income
- To Maximum of Rs.2laks (full amount earlier)
- The remaining loss can be carry forward and set off over next 8 years
Withdrawal under National
Pension System (NPS)
Investors
- Partial withdrawal up to 25% of contribution is tax free
- Self-employed can also claim 20% contribution to NPS as deduction
TDS on Rental Income Individual and HUF
TDS of 5% to be deducted by the Lessee
If the Rent is more than Rs. 50,000 per month
Guaranteed interest deposits Senior Citizen
Senior Citizen- 8% guaranteed pension for 10 years by LIC of India
scheme
Small And Medium Enterprise Self Employed
Self Employed- Companies turnover less than 50 crores will pay 25%
(30% earlier)

4. Scenarios for change in
Individual Income tax rates
Taxable Income (Rs.)
Individual (Income level) ₹ 10,00,000 ₹ 20,00,000 ₹ 60,00,000 ₹ 1,10,00,000
Current Proposed Current Proposed Current Proposed Current Proposed
Basic Tax 1,25,000 1,12,500 4,25,000 4,12,500 16,25,000 16,12,500 31,25,000 31,12,500
Surcharge - - - - - 1,61,250 4,68,750 4,66,875
Education cess 3,750
3,375
12,750 12,375 48,750 53,213 1,07,813 1,07,381
Total Tax Payable 1,28,750 1,15,875 4,37,750 4,24,875 16,73,750 18,26,963 37,01,563 36,86,756
Increase/(Decrease) in Tax
-
12,875
-
12,875 1,53,213
-
14,806
% change -10.00% -2.94% 9.15% -0.40%

5. Thank You
Right Horizons Financial Services Pvt. Ltd.
www.righthorizons.com rachna@righthorizons.com- 9845399780