The Lok Sabha has passed a new financial bill proposed by finance minister, Arun Jaitley. The new income tax bill has been made certain adjustments and new rules and policies were introduced. Aadhaar cards will now play a major role as it was made mandatory to file IT returns. Even the new financial bill didn’t come with any taxes for farmers.
Arun Jaitley also said that “tax buoyancy has improved to a great extent in the past two years. The new financial bill was made after many efforts and careful revisions. Our main goal is to balance the economy and bring down the corruption in the country. We have made few changes in the income tax structure and these new rules and policies will come in to effect from April 1st”.
New Income Tax changes and policies
- People who earn between Rs 50 lakh to 1 crore should pay surcharge of 10% of the tax levied are charged. People who earn more than Rs 1 crore the surcharge remained same at 15%.
- Good news for people who earn Rs 2.5 lakh to Rs 5 lakh. The tax rate for this category people is reduced by 5% which was 10% earlier.
- The immovable property holding period is now fixed for two years which was three years earlier. If the immovable properties are put in hold more than two years then 20% tax will be charged. However it can avail various exemptions on reinvesting.
- The base year which is considered for adjusting price for inflation has been moved forward to April 1, 2001. Earlier it was April 1, 1981. This results in low profits when it is sold and lower payout.
- When you reinvest on capital gains in redeemable bonds, you can avail certain tax exemptions. Can also invest on NHAI and also REC bonds.
- Penalties for filing IT returns have been adjusted slightly. IT returns for 2017-18 is Rs 5000 if you file on or before December 31, 2018. You have to pay Rs 10,000 if you pay after December 31st. People with income less than Rs 5 lakh are fined only Rs 1000.