TDS Rent Payment exceeding Rs. 50k

  TDS  Rent Payment exceeding Rs. 50k

Budget 2017 proposed to imposed TDS deduction liability on individual or a HUF (other than those liable for tax audit) for paying to a resident any income by way of rent exceeding fifty thousand rupees for a month or part of month during the previous year , shall deduct an amount equal to five per cent. of such income as income-tax thereon.

New Section 194-IB inserted

Ø  Applicable: - Individual or an HUF for rent payment exceeding Rs. 50,000 for a month or a part of month during the previous year.

Ø  Rate of TDS :- 5%

Ø  Deduction of tax :- at the time of credit of rent, for the last month of the previous year or the last month of tenancy if the property is vacated during the year, as the case may be, to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier.

Ø  It is further proposed that the deductor shall not be required to obtain tax deduction account number (TAN) as per section 203A of the Act.

Ø  It is also proposed that the deductor shall be liable to deduct tax only once in a previous year.

Ø  It is also proposed to provide that where the tax is required to be deducted as per the provisions of section 206AA(where PAN number of the deductee not furnished i.e at a rate of 20%), such deduction shall not exceed the amount of rent payable for the last month of the previous year or the last month of the tenancy, as the case may be.

     Salaried employee who are claiming HRA and showing payment of rent of more than Rs. 50,000/-  per month have to compulsory deduct TDS of 5%.

The amendment will be effective from 1^stJune 2017.

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Important Amendment which FM did not cover in Budget Speech

Thirteen (13) Important Amendment in Income Tax, which FM did not cover in Budget Speech

1) Deemed sale value for sale of unquoted shares introduced. To be taxed at fair value. Sec 50CA
2) In absence of PAN,the rate of TCS will be twice of the extent rate or 5%, whichever is higher. Sec.206CC.
3) New Section 269ST introduced  whereby Rs three lakh in cash cannot be received on a single day or inrespect of single transaction.
4) If Return not filed as per Sec. 139 (1), concept of late fee introduced. Rs. 5000 for delay up to 31st Dec. and Rs. 10000 thereafter. Late fee to be paid before filing the Return. Sec 234F
5) CA issuing wrong certificate would be penalised with Rs. 10000
6) Capital gain on shares will be exempt only if STT was paid while purchasing the shares.
7) HP loss can be setoff against other head of income only to the extent of 200000 in same year. Balance loss can be c/f to 8 A.Ys.
8) Indl and HUF to deduct tds even if unaudited @ 5% if rent is paid 50000
9) Tds in 194J amended, now 2 percent tds instead of 10
10) The scope of section 56 will be widened and will also cover any kind of gifts in cash or kind or for no consideration with few exemptions and exception
11) MAT book profit calculation aslo ammended
12) Disallowance of expenditure from income from other sources if tds is not deducted
13) Self employed can also claim 20% contribution to NPS as deduction.

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Budget 2017, Taxation

Following are the highlights of Union Finance Minister Arun Jaitley's 2017 Budget
speech.
The Union Budget 2017 was broadly focused on 10 broad themes — farmers, rural
population, youth, poor and health care for the underprivileged; infrastructure; financial
sector for stronger institutions; speedy accountability; public services; prudent fiscal
management; tax administration for the honest.

Tax proposals
1. India’s tax to GDP ratio is not favourable.
2. Out of 13.14 lakh registered companies, only 5.97 lakh companies have filed
returns for 2016-17.
3. Proportion of direct tax to indirect tax is not optimal.
4. 1.95 crore individuals showed income between Rs 2.5 lakh to Rs 5 lakh.
5. Out of 76 lakh individual assessees declaring income more than Rs 5 lakh, 56 lakh
are salaried.
6. Only 1.72 lakh people showed income of more than Rs 50 lakh a year.
7. Between Nov 8 to Dec 30: Deposits between Rs 2 lakh and Rs 80 lakh was made
in 1.09 crore accounts.
8. Net tax revenue of 2013-14 was Rs 11.38 lakh crore.
9. Out of 76 lakh individual assessees declaring income more than Rs 5 lakh, 56 lakh
are salaried.
10. 1.95 crore individuals showed income between Rs 2.5 lakh to Rs 5 lakh.
11. Rate of growth of advance tax in Personal I-T is 34.8% in last three quarters of
this financial year.
12. Holding period for long term capital gain lowered to 2 years
13. Propose to have carry-forward of MAT for 15 years.
14. Capital gains tax to be exempted for persons holding land from which land was
pooled for creation of state capital of Telangana.
15. Corporate tax: In order to make MSME companies more viable, propose to
reduce tax for small companies of turnover of up to Rs 50 crore to 25%. About 67
lakh companies fall in this category. 96% of companies to get this benefit.
16. Propose to reduce basic customs duty for LNG to 2.5% from 5%
17. SIT on black money suggested no cash transactions of more than Rs 3 lakh. Govt
has accepted this proposal.
18. Income Tax Act to be amended. No transaction above Rs 3 lakh to be permitted
in cash.
19. Limit of cash donation by charitable trust reduced to Rs 2,000 from Rs 10,000.
20. Net revenue loss in direct tax could be Rs. 20,000 crore.

Personal Income Tax
1. Existing rate of tax for individuals between Rs. 2.5- Rs 5 lakh reduced to 5% from
10%
2. All other categories of tax payers in subsequent brackets will get benefit of Rs
12,500.
3. Simple one page return for people with annual income of Rs. 5 lakh other than
business income.
4. People filing I-T returns for the first time will not come under govt. scrutiny.
5. 10% surcharge on individual income above Rs. 50 lakh and up to Rs 1 crore to
make up for Rs 15,000 crore loss due to cut in personal I-T rate. 15 surcharge on
individual income above Rs. 1 crore to remain.

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Budget 2017, Fiscal situation

Following are the highlights of Union Finance Minister Arun Jaitley's 2017 Budget
speech.
The Union Budget 2017 was broadly focused on 10 broad themes — farmers, rural
population, youth, poor and health care for the underprivileged; infrastructure; financial
sector for stronger institutions; speedy accountability; public services; prudent fiscal
management; tax administration for the honest.

Fiscal situation
1. Total expenditure - Rs. 21, 47,000 crore
2. Abolition on plan, non-plan expenditure, focus on capital expenditure ( Capital
expenditure will be 25.4 per cent)
3. Rs. 3,000 crore under Dept of Economic Affairs for implementing Budget
announcements.
4. Defence expenditure, excluding pension, at Rs 2,74,114 crore
5. Expenditure in science and technology — Rs. 37,435 crore
6. Total resources transferred to States and UTs is Rs 4.11 lakh crore
7. Recommended 3% fiscal deficit for three years with deviation of 0.5% of GDP.
8. Revenue deficit - 1.9 %
9. Pegged fiscal deficit of 2017-18 at 3.2% of GDP and remain committed to
achieving 3% in the next year.

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Budget 2017 ,Financial sector

Following are the highlights of Union Finance Minister Arun Jaitley's 2017 Budget
speech.
The Union Budget 2017 was broadly focused on 10 broad themes — farmers, rural
population, youth, poor and health care for the underprivileged; infrastructure; financial
sector for stronger institutions; speedy accountability; public services; prudent fiscal
management; tax administration for the honest.

Financial sector
1. FDI policy reforms - more than 90% of FDI inflows are now automated.
2. Shares of Railway PSE like IRCTC would be listed on stock exchanges.
3. Bill on resolution of financial firms to be introduced in this session of parliament.
4. Decided to abolish FIPB in 2017-18.
5. Foreign Investment Promotion Board to be abolished.
6. Revised mechanism to ensure time bound listing of CPSEs
7. Computer emergency response team for financial sector to be formed.
8. Pradhan Mantri Mudra Yojana lending target at Rs 2.44 lakh crore for 2017-18
9. Digital India - Bhim app will unleash mobile phone revolution - two new schemes
to promote the app.
10. Govt to introduce two new schemes to promote BHIM App - referral bonus for
users and cash back for traders: FM.
11. Negotiable Instruments Act might be amended.
12. DBT to LPG consumers , Chandigarh is kerosene free, 84 govt schemes are on the
DBT platform.
13. Head post office as the central office for rendering passport services
14. Easy online booking system for Army, defence personnel
15. For big-time offences - including economic offenders fleeing India, the govt. will
introduce a legislative change or new law to confiscate the assets of these
people within the country

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Budget 2017 on Energy sector

Following are the highlights of Union Finance Minister Arun Jaitley's 2017 Budget
speech.
The Union Budget 2017 was broadly focused on 10 broad themes — farmers, rural
population, youth, poor and health care for the underprivileged; infrastructure; financial
sector for stronger institutions; speedy accountability; public services; prudent fiscal
management; tax administration for the honest.

Energy sector
1. A strategic policy for crude reserves will be set up
2. Rs. 1.26,000 cr for energy production-based investments received
3. Trade infra export scheme will be launched 2017-18

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Budget 2017 for Infrastructure; railways

Following are the highlights of Union Finance Minister Arun Jaitley's 2017 Budget
speech.
The Union Budget 2017 was broadly focused on 10 broad themes — farmers, rural
population, youth, poor and health care for the underprivileged; infrastructure; financial
sector for stronger institutions; speedy accountability; public services; prudent fiscal
management; tax administration for the honest.

Infrastructure; railways
1. A total allocation of Rs. 39,61,354 crore
2. Total allocation for Railways — Rs. 1,31,000 crore
3. No Service charge while booking tickets with IRCTC
4. Raksha coach with a corpus of Rs. 1 lakh cr fore five years (for passenger safety)
5. Unmanned level crossings eliminated by 2020
6. 3,500 km of railway lines to be commissioned this year up from 2,800 km last
year.
7. SMS based clean my coach service started
8. Coach mitra facility - to register all coach related complaints
9. 2019 - bio toilets for all trains
10. 500 stations to be made differently-abled friendly
11. Railways to partner with logistics players for front end and back end solutions for
select commodities.
12. Railways will offer competitive ticket booking facility
13. 2,000 km for coastal connectivity of roads -
14. Rs. 64,000 crore allocation for highways.
15. Allocation of high speed Internet 1,50,000 gram panchayats
16. New Metro rail policy to be announced with new modes of financing

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Budget 2017 For the poor; health care

Following are the highlights of Union Finance Minister Arun Jaitley's 2017 Budget
speech.
The Union Budget 2017 was broadly focused on 10 broad themes — farmers, rural
population, youth, poor and health care for the underprivileged; infrastructure; financial
sector for stronger institutions; speedy accountability; public services; prudent fiscal
management; tax administration for the honest.

For the poor; health care
1. Mahila Shakthi Kendras - Rs. 500 cr allocated.
2. Nationwide scheme for pregnant women - Rs. 6000 each will be transferred.
3. For women and Kids - Rs. 1,84,632 cr. allocation investment
4. Affordable housing to be given infrastructure status.
5. Surplus liquidity - banks have already started reducing lending rates for housing
6. Elimination of tuberculosis by 2025 targeted.
7. 1.5 lakh health sub centres to be transformed into health wellness centre.
8. Two new AIIMS in Jharkhand and Gujarat.
9. Structural transformation of regulator framework for medical education in India
10. Allocation for Scheduled Caste - Rs. 52,393 crore
11. Aadhaar-based smartcards for senior citizens to monitor health.

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Budget 2017 point For youth

Following are the highlights of Union Finance Minister Arun Jaitley's 2017 Budget
speech.
The Union Budget 2017 was broadly focused on 10 broad themes — farmers, rural
population, youth, poor and health care for the underprivileged; infrastructure; financial
sector for stronger institutions; speedy accountability; public services; prudent fiscal
management; tax administration for the honest.

For youth
1. Introduction of a system of measuring annual learning outcomes, innovation
fund for secondary education.
2. There will be a focus on 3,479 educationally-backward blocks
3. Colleges will be identified based on accreditation
4. Skill India mission was launched to maximise potential. 100 India International
centres across country.
5. Courses on foreign languages to be introduced.
6. Skill India Mission was launched in 2015 to maximise the potential of our youth.
100 India International Skill centres will be established across the country.
7. Steps to create 5000 PG seats per annum

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Budget 2017 point on Rural sector

Following are the highlights of Union Finance Minister Arun Jaitley's 2017 Budget
speech.
The Union Budget 2017 was broadly focused on 10 broad themes — farmers, rural
population, youth, poor and health care for the underprivileged; infrastructure; financial
sector for stronger institutions; speedy accountability; public services; prudent fiscal
management; tax administration for the honest.

Rural sector
1. Government targets to bring 1 crore households out of poverty by 2019
2. During 2017-18, 5 lakh farm ponds to be taken up under MGNREGA
3. Over Rs 3 lakh cr spend for rural India. MGNREGA to double farmers income
4. Participation of women in mgnrega up to 55%
5. During 2017-18, 5 lakh farm ponds to be taken up under MGNREGA
6. Using space tech in a big way to plan MGNREGA works
7. We propose to complete 1 crore houses for those without homes
8. Allocating Rs. 19,000 cr for Pradhan Mantri Gram Sadak Yojana in 2017-18
9. We are well on our way of achieving 100% rural electrification by March 2018.
10. Swachh Bharat mission has made tremendous progress, sanitation coverage has gone up from 42% in Oct 13 to 60% now.
11. Sanitation coverage in rural areas gone up from 42% in Oct 2014 to 60%

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Agriculture

Following are the highlights of Union Finance Minister Arun Jaitley's 2017 Budget
speech.
The Union Budget 2017 was broadly focused on 10 broad themes — farmers, rural
population, youth, poor and health care for the underprivileged; infrastructure; financial
sector for stronger institutions; speedy accountability; public services; prudent fiscal
management; tax administration for the honest.

Agriculture
1. Sowing farmers should feel secure against natural calamities.
2. Rs. 10 lakh crore as credit to farmers with 60 days interest waiver says FM
3. NABARD fund to be increased to Rs. 40,000 crore
4. Govt will set up mini lab in Krishi Vigyan Kendras for soiling:
5. A dedicated micro irrigation fund will be set up for NABARD with Rs 5,000 cr
initial corpus
6. Irrigation corpus increased from Rs 20,000 crores to Rs 40,000
7. Dairy processing infrastructure fund with be created initially with a corpus of Rs.
2000 cr
8. Issuance of Soil cards has gained momentum
9. A model law on contract farming will be prepared and shared with States

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Budget 2017 on demonetisation

Following are the highlights of Union Finance Minister Arun Jaitley's 2017 Budget
speech.
The Union Budget 2017 was broadly focused on 10 broad themes — farmers, rural
population, youth, poor and health care for the underprivileged; infrastructure; financial
sector for stronger institutions; speedy accountability; public services; prudent fiscal
management; tax administration for the honest.

On demonetisation
1. Demonetisation is expected to have a transient impact on economy.
2. We will have a great impact on the economy and lives of our people . The effects
of Dem. are not expected to spill over next year.
3. Demonetisation a bold and decisive measure and will lead to higher GDP growth.
4. The effects of demonetisation will not spillover to the next fiscal.

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