Forum: Taxation & Corporate Law Forum
Speaker: CA Naresh Jakhotia
Session on Fine Print of Income Tax – Budget 2017 & Cash Transaction 2016 held
VIA Taxation and Corporate Law Forum has organized a session on Fine Print of Income Tax – Budget 2017 & Cash Transaction 2016 today at VIA.
The master on the Income Tax subject CA Naresh Jakhotia informed the audience about the promoting corporate culture New Tax slab of 25% for companies having turnover upto 50 crore. This is for the first time corporate tax rate is lower than highest tax slab for individual tax rate. It will encourage corporate culture in the country, he informed. He also critically analysed the new tax slab of 5% and concluded that individual with income up to Rs. 5 Lakh will not be at all benefited by the new tax slab as his ultimate tax liability with all deductions was otherwise also nil in the present tax regime. However, taxpayer in higher tax slab will definitely be benfited by the new tax slab of 5% as it would result in net tax saving of Rs. 12,875/-. The surcharge of 10% over income of Rs. 50 Lakh for individual taxpayer would ultimately compensate the revenue loss to the Government treasury, he opined. Change in the base year of capital assets from 1981 to 2001 would benefit the taxpayer at large as the present provision of taxing on the basis of Fair Market value was resulting in artificial tax liability on the individual taxpayers. The fair market value of 1981 was not the real value of the 1981 as ready reckoner value was introduced subsequently and 2001 value by and large would reflect the real value of the assets. Increase in the valuation of the property from 1981 to 2001 would go untaxed and would directly benefit the taxpayer having property acquired prior to 2001. He also covered the new provision of loss on house property which is restricted to Rs. 2 Lakh even in respect of let out property. He in detail covered the latest amendment proposed on the taxability of Joint Development agreement. The specific section to provide for taxability of JDA would reduce the litigation, would provide better tax regime for the taxpayer and would be in the interest of the public at large. Further, taxing at the time of completion of scheme would ensure enough liquidity to the landowner to discharge the tax liabilities, he expressed. He also covered the beneficial provision proposed for reduction in the holding period from 3 years to 2 years for recknoning it as a long term capital assets. The holding period of 2 years for LTCG is only for land or building or both and not for other capital assets like Gold/Ornaments, right in property through agreement to sale etc, he cautioned the taxpayer. The change in the carry forward of loss provision with respect to start up was also discussed in length. Further, extension of time period for completion of low cost housing scheme from 3 years to 5 years would benefit the promoter, he discussed. He also covered the changes with respect to taxability of charitable trust and also covered the amendment whereby even charitable trust could be surveyed by the authorities. The amendment proposed for assessing income beyond 6 years up to 10 years in income tax raid cases was also discussed at length in the presentation. The new income tax return late filing fees from Rs. 1000 to Rs. 10,000 if the return is filed beyond the due date of filing would ensure better timely return compliance, he expressed. He also covered the taxability of dividend income above Rs. 10 Lakh and also notional income in the hands of builder in respect of unsold flats/stock. He also covered the taxability issue involved in the case of sale of shares below the fair market value. He also cautioned the new tax provision for taxability of notional income in the hands of firms/companies if the property is purchased below the stamp duty valuation. The changes proposed in the finance bill to promote the digital economy like disallowance of expenses exceeding Rs. 10,000 in cash, reduction of presumptive tax rate from 8% to 6% in respect of payment received otherwise than cash and disallowance of depreciation for purchase of capital assets in cash were also discussed in the session. The recent provision of tax benefit of National Pension Scheme (NPS) up to 20% of scheme was also highlighted in the programme. He also dealt about the consequence of restriction placed on acceptance of Rs. 3 Lakh or more in cash and with example covered the tax issues involved therein. He also informed about the TDS on rent payment exceeding Rs. 50,000/- by any individual /HUF not covered by tax audit provision. TDS net would be widen to cover more transactions of similar nature, he pointed out.
Earlier, CA O S Bagdia, Vice President – VIA welcomed to the Guest Speaker with floral bouquet. Shri Suresh Rathi, Vice President – VIA, made an opening remarks. CA Sachin Jajodia, Convener of – VIA Taxation & Corporate Law Forum introduced the speaker, conducted the proceedings and summed up the program & proposed vote of thanks.
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