Budget in 2 minutes

A snapshot of all you need to know about key announcements in Budget 2017

Excise and service tax left untouched in light of GST
 
The finance minister said Implementation of GST will bring more taxes to the Central and state governments because of the widening of the tax net, adding that he had preferred not to make many changes in the current regime of excise and service tax because these are soon to be replaced by GST.
 
FPIs to be exempt from transfer provisions
 
The government will exempt Foreign Portfolio Investors (FPIs) Category I & II from indirect transfer provisions. Such provisions will also not apply in case of redemption of shares or interests outside India as a result of redemption or sale of investment in India which is chargeable to tax in India.
 
New return form on the cards to widen tax net
 
To expand the tax net, the government will introduce a one-page form to be filed as Income Tax Return for individuals having taxable incomes of up to Rs 5 lakh from other than business income. Such individuals who file a return for the first time will not be subject to scrutiny in the first year.
 
Time for revising tax returns cut to 12 months
 
To allow people to claim refunds speedily, the time allowed for revising a tax return is being reduced to 12 months from the completion of a financial year, at par with the time for filing of returns. The time for completion of scrutiny assessments is also being compressed.

Professionals can pay advance tax in one instalment
 

This year, there is something more for professionals with receipts of up to Rs 50 lakh per year. A new scheme for presumptive taxation was announced last year. People in this bracket will now be permitted to pay advance tax in one instalment, instead of the current four instalments.

Holding period for  capital gains on property cut
 

The holding period for calculating long-term gain from immovable property is to be reduced from three years to two years. Also, the base year for indexation is to be changed from April 1, 1981, to April 1, 2001, for all classes of assets. This will reduce the capital gains tax liability. 

MAT carry-forward allowed for 15 years 
 

To allow companies to use MAT credit in future years, carry-forward of MAT will be allowed for up to a period of 15 years, instead of 10 years at present. Although the plan for phasing out exemptions will kick in from April 1, 2017, the full benefit of this will be available only after seven to 10 years. 

Income tax for small companies cut to 25%
 

In order to make micro, small and medium enterprises (MSMEs) more viable and also to encourage firms to migrate to this format (from non-corporate structures), the income tax for smaller companies with annual turnover of up to Rs 50 crore is being reduced to 25 per cent.

Tax department to go high-tech to plug evasion
 

The finance minister said the tax authorities were trying to maximise the use of information technology to remove human contact with assesses as well as to plug tax avoidance. The use of e-assessment is to be stepped up. The department is also using a lot of data mining capability, both in-house and outsourced.
 

Concession to small players who pay tax digitally
 

For small and medium tax-payers whose turnover is up to Rs 2 crore, six per cent of turnover received by non-cash means will be counted as presumptive income, in order to promote digitisation. At present, eight per cent of their turnover is counted as presumptive income.  

Duty exemptions to push cashless transactions
 

To promote cashless transactions, the government will exempt basic Customs duty, excise/CV duty on miniaturised point-of-sale card readers for micro ATMs, fingerprint readers and iris scanners. Exemption will also apply to parts and components for the manufacture of such devices.
 

Profit-linked tax deduction for start-ups relaxed 
 

The government had given income tax exemptions to start-ups with certain conditions last year. One of them was that a profit-linked deduction was available to start-ups for three out of five years; this has been changed to three years out of seven years.

Incentives for presumptive income scheme
 

The threshold limit for audit of business entities who opt for the presumptive income scheme has been raised from 

Rs1 crore to Rs2 crore. Also, the threshold for maintenance of books for individuals and HUF is being increased from a turnover of Rs10 lakh to Rs25 lakh or income from Rs1.2 lakh to Rs2.5 lakh.

No TDS if insurance agents file self-declaration
 

Individual insurance agents, five per cent of whose commission is deducted at source even if the income of some of them may be below the taxable limit, will now be exempt from TDS subject to their filing a self-declaration that their income is below the taxable limit.

Scope of domestic pricing provisions to be reduced
 

In order to reduce the compliance burden resulting from domestic transfer pricing provisions, the scope of domestic transfer pricing will be reduced, and it will apply only if one of the entities involved in related party transaction enjoys specified profit-linked deduction.

Tax on completed houses kicks in after a year
 

Houses that are unoccupied after getting completion certificates will be subjected to tax on notional rental income only one year after the end of the year in which the completion certificate is received, not immediately, so that builders get time to liquidate their inventory.