Income tax rules applicable for financial year 2016-17

Income tax rules applicable for the FY 2016-17 :
1. No change in income tax slab for FY 2016-17. Basic exemption limit is same Rs.2,50,000 for non senior citizen and Rs.3,00,000 for senior citizen.
2. There is no change in income tax rate for fy 2016-17.

3. Additional deduction of Rs.3000 is available u/s 87A. Now, Section 87A will provide Rs.5000.
4. Rate of surcharge is increased from 12% to 15% for income more than Rs. 1 crore.
5. Additional Rs.50000 income tax deduction for interest on housing loan is available for first time buyer of house. Loan should not be more Rs.35 lakhs and cost of the house should not be more than Rs.50 Lakhs.
6. Section 80GG deduction is increased from Rs. 24,000 to Rs.60,000.
7. Withdrawal from national pension scheme at the time of retirement is exempt subject to 40% of withdrawal.
8. Similarly 40% withdrawal from supper annuation fund is also exempt.
9. Any payment received from sukanya samriddhi scheme is exempt.
10. For deduction under section 80DDB, limit is increased from Rs. 60,000 to Rs.80,000.
11. Deduction limit for Section 80D is increased by Rs.10,000 for non senior citizen and senior citizen. For non senior citizen, limit is Rs. 25,000 and for senior citizen, limit is Rs. 30,000.
12. Deduction limit for section 80DD has been increased from Rs. 50,000 to Rs.75,000. For severe disability, the limit is increased from Rs. 1 Lakhs to Rs.1.25 Lakhs.
13. For contribution to NPS ( National Pension Scheme) under section 80CCD, the limit is increased from Rs. 1.5 Lakhs. Additional deduction up to Rs. 50,000 is allowed for contribution above Rs. 1.5 Lakhs in national pension scheme.
14. Dividend income will be taxed at 10%- applicable to individual and HUF receiving dividend income more than Rs. 10 Lakhs.
15. If assessee has made investment in certain categories, capital gain will not be taxed.
16. Transport allowance exemption limit has been increased from Rs. 800 to Rs.1,600 p.m. for salary income.
17. Capital gain exemption benefit will be granted to start ups.
18. When business has lower turnover up to Rs. 5 crore, corporate tax rate would be 29%.
19. There is no change in corporate tax rate.
20. Surcharge for domestic companies will be 7% for income exceeding Rs. 1 crore to 10 crore and 12% for income exceeding Rs. 10 crore.
21. Now, professionals can also avail presumption taxation scheme if the receipt of the business does not exceed Rs. 50 Lakhs.
22. Turnover limit of presumptive taxation scheme has been increased to Rs. 2 Crore.
23. For manufacturing company set up after 1/3/2016, corporate tax will be 25%.
24. For section 80JJAA, threshold of minimum workers has been reduced to 50 from 100.

25. Tax rate on royalty and fees from technical service reduce to 10% ( From 25%).
26. Surcharge rate increase from 10% to 12% on income tax payable on distribution of dividend, buyback of shares by companies.
27. Non resident can avoid higher withholding tax by producing alternative document if PAN is not available.
28. for domestic transfer pricing, threshold is increased from Rs. 5 crore to Rs. 20 crore.
29. GAAR will be applicable for investments made after 1/4/2017.
30. Benefit of non obtaining TAN for tax deduction on purchase of immovable property is extended to resident seller to non resident seller.
31. There is amendment in section 269ss and 269T to prohibit advance in cash exceeding Rs. 20000 while purchasing immovable property.
32. Yoga is included in special category of charitable purpose.

Leave a Reply

Your email address will not be published. Required fields are marked *