Income Tax Key Changes for FY 2017-18

INCOME TAX – KEY CHANGES AND
ACTION POINTS FOR THE FY 2017-18
 Restrictions on Cash Transactions
 Restrictions on Cash Receipts
 Restriction on in House property loss
 Changes in Capital gains
 Cap on Depreciation
 Presumptive tax concession for cheque transactions
 Income from unexplained sources-consequences
 Tax on deemed gifts (Sale/purchase lower than Fair Market Value)
 Stiff penalties including for late filing of IT Returns
 Annual Information Reporting and Compulsory quoting of PAN
 Changes in Tax & Sur charge rates
Finance Act 2017
 Finance Bill 2017 has been passed by both the houses of parliament and
received assent from the President of India on 31st March, 2017 and
became Finance Act 2017
 Far reaching changes have been made in the Finance Act and Income
Tax (Amendment) Act, 2016
 Imposed huge penalties followed by prosecution for contravention
 We would like to bring few important highlights for your attention and
further compliance
RESTRICTION ON CASH TRANSACTIONS
 Limit for disallowance of business expenditure made in cash is
reduced from Rs 20,000 to Rs 10,000 made to a person per day.
(Limit of Rs 35,000 for payment made to transporters however
continues)
 Above disallowance is extended on capital expenditure also by
restricting depreciation and Capital Expenditure on R & D.
 If you have purchased a two wheeler by paying Rs 15,000 in
cash and Balance Rs 30,000 in Cheque – Depreciation eligibility
will be only on Rs 30,000/-.
 No deduction allowed for donation U/s 80G in excess of Rs 2000/- if
paid in cash.
RESTRICTION ON CASH TRANSACTIONS
 Prohibition for accepting loan other than by A/c payee Cheque /
Draft /ECS in excess of Rs 20,000/- continues (269SS).
 Prohibition for repaying loan other than by an A/c payee Cheque /
Draft /ECS in excess of Rs 20,000/- continues (269T).
 W.e.f 01.06.2015 above restrictions extended to acceptance of
advance towards sale of immovable property and repayment of
such advance.
RESTRICTION ON CASH RECEIPTS
 No person shall receive Rs 2 lacs or more
a. in aggregate from a person in a day; or
b. Per Transaction; or
c. Per event/occasion from a person,
other than by an A/c Payee Cheque/draft/ECS (Sec 269 ST)
 Penalty at 100% of the amount involved
 Covers all cash receipts be it cash sales, advance for sales, lease
advance, etc. (Loans received are not covered since they are
covered by Sec 269SS where restriction is up to Rs 20,000/- only.