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_____. BUDGET 2017 [FINANCE BILL, 2017 ]. BANSI S. MEHTA & CO. CHARTERED ACCOUNTANTS. BANSI S. MEHTA & CO. Finance Bill, 2017 - Analysis CHARTERED ACCOUNTANTS. Preface This e-booklet highlights the key proposals put forth by the Honourable Finance Minister in his Union Budget 2017 . This e-booklet is for private circulation amongst clients and professional colleagues of Bansi S. Mehta & Co. only. It is not for general circulation and is under no circumstances an offer, invitation or solicitation of any kind. This e-booklet is intended to be a succinct overview of the proposals put forth and is neither to be construed as comprehensive nor as to render taxation, legal, economic or financial advice. This e-booklet should not be relied upon for taking any actions/ decisions on the contents of the e-booklet and proper professional/ legal advice should be sought.

BANSI S. MEHTA & CO. Finance Bill, 2017 - Analysis CHARTERED ACCOUNTANTS Privileged & Confidential 3 For Private Circulation Only INDEX Chapter Content Page No.

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1 _____. BUDGET 2017 [FINANCE BILL, 2017 ]. BANSI S. MEHTA & CO. CHARTERED ACCOUNTANTS. BANSI S. MEHTA & CO. Finance Bill, 2017 - Analysis CHARTERED ACCOUNTANTS. Preface This e-booklet highlights the key proposals put forth by the Honourable Finance Minister in his Union Budget 2017 . This e-booklet is for private circulation amongst clients and professional colleagues of Bansi S. Mehta & Co. only. It is not for general circulation and is under no circumstances an offer, invitation or solicitation of any kind. This e-booklet is intended to be a succinct overview of the proposals put forth and is neither to be construed as comprehensive nor as to render taxation, legal, economic or financial advice. This e-booklet should not be relied upon for taking any actions/ decisions on the contents of the e-booklet and proper professional/ legal advice should be sought.

2 Further, this e-booklet contains only the proposals and amendments as given in the Finance Bill, 2017 , which may be modified before it receives the approval and assent of the Parliament and the President. The material used in the preparation of this e-booklet has been sourced from various sources including the speech of the Finance Minister, websites of the Government and other publicly available information. While all reasonable care has been taken in preparation of this e-booklet, we accept no responsibility for any errors it may contain or for any omissions or otherwise or for any loss, howsoever caused or sustained, by the person who relies on it. Privileged & Confidential 2. For Private Circulation Only BANSI S. MEHTA & CO. Finance Bill, 2017 - Analysis CHARTERED ACCOUNTANTS.

3 INDEX. Chapter Content Page No. 1 RATES OF INCOME TAX 6. 2 SALARIED & SMALL TAXPAYERS 13. 3 HOUSING AND REAL ESTATE SECTOR 16. 4 START UP COMPANIES 23. 5 CAPITAL MARKETS 25. 6 CAPITAL GAINS 28. 7 GIFT DEEMED AS INCOME 35. 8 PROVISIONS PROMOTING DIGITAL ECONOMY AND CASH 37. DETERRENCE. 9 BANKING AND FINANCIAL SERVICES 41. 10 NON-RESIDENT TAXATION/ TRANSFER PRICING 43. 11 MINIMUM ALTERNATE TAX ( MAT ) 50. 12 INCOMES WHICH DO NOT FORM PART OF TOTAL INCOME 55. 13 ACCOUNTS AND AUDIT 58. 14 SEARCH, SEIZURE, REQUISITION OF BOOKS OF 60. ACCOUNTS, POWER TO CALL FOR INFORMATION AND. SURVEY. 15 RETURN FILING AND COMPLETION OF ASSESSMENT, 64. REASSESSMENT AND ASSESSMENT IN CASE OF SEARCH. OR REQUISITION. 16 TAX DEDUCTED AT SOURCE ( TDS ) & TAX COLLECTED 71. AT SOURCE ( TCS ). 17 LEVY OF INTEREST, FEE & PENALTY 79.

4 18 MISCELLANEOUS PROVISIONS 85. Privileged & Confidential 3. For Private Circulation Only BANSI S. MEHTA & CO. Finance Bill, 2017 - Analysis CHARTERED ACCOUNTANTS. LIST OF ABBREVIATIONS: Abbreviations Full Name Act Income Tax Act, 1961. AE Associated Enterprise AIF Alternate Investment Fund ALP Arm's length Price Assessing Officer AOP Association of Persons Assessment Year BOI Body of Individuals CBDT Central Board of Direct Taxes CIT Commissioner of Income-tax CIT(A) Commissioner of Income-tax (Appeals). Companies Act Companies Act, 2013. DDT Dividend Distribution Tax DTAA Double Taxation Avoidance Agreement EC Education Cess EPF Employee's Provident Fund Finance Bill, 2016. Financial Year FEMA Foreign Exchange Management Act, 1999. FII Foreign Institutional Investment GAAR General Anti Avoidance Rules HC High court HUF Hindu Undivided Family IIT Infrastructure Investment Trust ITAT Income Tax Appellate Tribunal LIC Life Insurance Corporation MAT Minimum Alternate Tax MF Mutual Fund NR Non-resident Privileged & Confidential 4.

5 For Private Circulation Only BANSI S. MEHTA & CO. Finance Bill, 2017 - Analysis CHARTERED ACCOUNTANTS. PE Permanent Establishment PF Provident Fund Previous Year SC Supreme Court SDT Specified Domestic Transactions SEBI Securities and Exchange Board of India Sec. Section SHEC Secondary Higher Education Cess SPV Special Purpose Vehicle STT Securities Transaction Tax RBI Reserve Bank of India REIT Real Estate Investment Trust Rules Income Tax Rules, 1962. TCS Tax Collected at Source TDS Tax Deducted at Source TP Transfer Pricing u/s Under section Privileged & Confidential 5. For Private Circulation Only BANSI S. MEHTA & CO. Finance Bill, 2017 - Analysis CHARTERED ACCOUNTANTS. CHAPTER 1. RATES OF INCOME TAX. In respect of income of all categories of assessees liable to tax for the assessment year 2018-19, the rates of income-tax have been specified in Part I of the First Schedule to the Bill.

6 These are the same as those laid down in Part III of the First Schedule to the Finance Act, 2016 as amended by the Taxation Laws (Second Amendment) Act, 2016. ( of 2016), for the purposes of computation of "advance tax", deduction of tax at source from "Salaries" and charging of tax payable in certain cases. The salient features of the rates specified in the said Part III are indicated in the following paragraphs A. Individual, Hindu undivided family, association of persons, body of individuals, artificial juridical person. Paragraph A of Part-III of First Schedule to the Bill provides following rates of income-tax: . (i) The rates of income-tax in the case of every individual (other than those mentioned in (ii) and (iii) below) or Hindu undivided family or every association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Act (not being a case to which any other Paragraph of Part III.)

7 Applies) are as under: . Upto Rs. 2,50,000 Nil. Rs. 2,50,001 to Rs. 5,00,000 5 per cent. Rs. 5,00,001 to Rs. 10,00,000 20 per cent. Above Rs. 10,00,000 30 per cent. (ii) In the case of every individual, being a resident in India, who is of the age of sixty years or more but less than eighty years at any time during the previous year, . Upto ,00,000 Nil. Rs. 3,00,001 to Rs. 5,00,000 5 per cent. Rs. 5,00,001 to Rs. 10,00,000 20 per cent. Above Rs. 10,00,000 30 per cent. Privileged & Confidential 6. For Private Circulation Only BANSI S. MEHTA & CO. Finance Bill, 2017 - Analysis CHARTERED ACCOUNTANTS. (iii) in the case of every individual, being a resident in India, who is of the age of eighty years or more at anytime during the previous year, . Upto Rs. 5,00,000 Nil. Rs.

8 5,00,001 to Rs. 10,00,000 20 per cent. Above Rs. 10,00,000 30 per cent. See charts below to understand how income tax will be applicable now: If the limit of Rs lakh under Section 80C for investment is used fully, the tax would be zero for people with income of Rs lakhs. Income Rs 5 lakhs Particulars AY 2017 -18 AY 2018-19. Gross Income 5,00,000 5,00,000. Deduction u/s 80C 1,50,000 1,50,000. Net Income 3,50,000 3,50,000. Tax 10,000 5,000. Rebate u/s 87A 5,000 2,500. Tax Payable 5,000 2,500. Education Cess 150 75. Net Tax Payable 5,150 2,575. Savings in Tax 2,575. Income Rs 10 lakhs Particulars AY 2017 -18 AY 2018-19. Gross Income 10,00,000 10,00,000. Deduction u/s 80C 1,50,000 1,50,000. Net Income 8,50,000 8,50,000. Tax 95,000 82,500. Rebate u/s 87A 0 0. Tax Payable 95,000 82,500.

9 Education Cess 2,850 2,475. Net Tax Payable 97,850 84,975. Savings in Tax 12,875. Privileged & Confidential 7. For Private Circulation Only BANSI S. MEHTA & CO. Finance Bill, 2017 - Analysis CHARTERED ACCOUNTANTS. Income Rs 15 lakhs Particulars AY 2017 -18 AY 2018-19. Gross Income 15,00,000 15,00,000. Deduction u/s 80C 1,50,000 1,50,000. Net Income 13,50,000 13,50,000. Tax 2,30,000 2,17,500. Rebate u/s 87A 0 0. Tax Payable 2,30,000 2,17,500. Education Cess 6,900 6,525. Net Tax Payable 2,36,900 2,24,025. Savings in Tax 12,875. Surcharge : 10% of the Income Tax, where taxable income is more than Rs. 50 lacs and upto Rs. 1 crore. However, the amount of Income Tax and Surcharge shall not increase the amount of income tax payable on a taxable income of Rs. 50 lacs by more than the amount of increase in taxable income.

10 15% of the Income Tax, where taxable income is more than Rs. 1 crore. However, the amount of Income Tax and Surcharge shall not increase the amount of income tax payable on a taxable income of Rs. 1 crore by more than the amount of increase in taxable income. Education Cess : 3% of the total of Income Tax and Surcharge. Income Rs 60 lakhs Particulars AY 2017 -18 AY 2018-19. Gross Income 60,00,000 60,00,000. Deduction u/s 80C 1,50,000 1,50,000. Net Income 58,50,000 58,50,000. Tax 15,80,000 15,67,500. Rebate u/s 87A 0 0. Tax Payable 15,80,000 15,67,500. Surcharge 0 1,56,750. Education Cess 47,400 51,728. Net Tax Payable 16,27,400 17,75,978. Savings/(Increase) in Tax (1,48,578). Privileged & Confidential 8. For Private Circulation Only BANSI S. MEHTA & CO. Finance Bill, 2017 - Analysis CHARTERED ACCOUNTANTS.


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