There are certain most important Income tax changes which will affect you in the coming month.
Here is a quick read through them!
Tax rebate for taxpayers with income up to Rs 3.5 lakh (earlier Rs 5 lakh) is reduced to Rs 2,500 from Rs 5,000 per year. Because of the combined effect of change in tax rate and rebate, an individual with taxable income of Rs 3.5 lakh will now pay tax of 2,575 instead of 5,150 earlier.
Holding period for immovable property is now reduced to 2 years from 3 and is to be considered “long term”.This change will ensure that any immovable property which is held beyond 2 years is taxed at a reduced rate of 20 per cent and eligible for various exemptions on reinvestment.
Tax exemption on reinvestment of capital gains, this will be in notified redeemable bonds in addition to investment in NHAI and REC bonds.
Tax saving for taxpayers with income above Rs 1 croreof up to Rs 12,500 per year and Rs 14,806 (including surcharge and cess) and a decrease in tax rate from 10 per cent to 5 per cent fortaxpayers with total income between Rs 2.5 lakh and Rs 5 lakh.
Surcharge at 10 per cent of tax levied on rich taxpayers– people with income between Rs 50 lakh and Rs 1 crore. The rate of surcharge for the super rich, with income above Rs 1 crore, will remain the same i.e.15 per cent.
One-page tax return formfor individuals with taxable income up to Rs 5 lakh (excluding business income) is to be introduced. Those filing returns for the first time in this category will generally not be subject to scrutiny.
Time period for revision of tax return cut to one year (which was previously 2 years) from the end of the relevant FY or before completion of assessment, whichever is earlier.
The base year for indexation of cost (adjustment of inflation) has been shifted to April 1, 2001 ( which was previously April 1, 1981).Long term capital gains tax will result in a lower payout owing to beneficial amendments. This means lower profits on sale.
Fine for delay in filing tax return for 2017-18 is Rs 5,000 if filed by Dec 31, 2018 and Rs 10,000 if filed later. Such fee will be restricted to Rs 1,000 for small taxpayers with income up to Rs 5 lakh.
For more information on Income Tax, feel free to reach us on, info@gapeseedconsulting.com or call +91-9599444639/+91-9599444630
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