rediff.com

NewsApp (Free)

Read news as it happens
Download NewsApp

Available on  

Rediff News  All News 
Rediff.com  » Business » 10 things that will change in FY18

10 things that will change in FY18

April 04, 2017 09:12 IST

While for the consumers, there is some gain and some pain, for India Inc, it's all about compliance, consolidation and parity

Single-page ITR-1, Aadhaar compulsory: A simple income tax return-1, or ITR-1, form for the salaried has been introduced for taxpayers with income of Rs 50 lakh and one property.

For other categories, the number of forms has been reduced from eight to six. Also, mentioning Aadhaar number has become mandatory in all forms.

Small savings rates cut by 10 basis points: 7.9 per cent rate for Public Provident Fund and five-year National Savings Certificates; 7.6 per cent for Kisan Vikas Patra; 8.4 per cent for Sukanya Samriddhi Yojana and Senior Citizens Savings Scheme; 7.2 per cent for five-year recurring deposits and 6.9-7.7 per cent for one to five-year term deposits.

Small savings rates still remain more attractive than bank deposit rates.

Income tax changes: Those earning between Rs 250,000 and Rs 50,000 a year will have to pay income tax at the rate of five per cent instead of the earlier 10 per cent; those above Rs 50 lakh will pay 10 per cent surcharge.

Fly cheap: The regional connectivity scheme will operate on 128 routes and connect 70 airports. Airlines will cap fares at Rs 2,500 for a one-hour flight.

SBI merger: State Bank of India’s (SBI) merger with five associate banks took effect from April 1.

The merger makes SBI the world’s 45th biggest bank, with Rs 33.5 lakh crore worth of assets, a branch base of 24,000 branches and 59,000 automated teller machines.

BS–IV: The Bharat Stage-IV, or BS-IV, emission standards come into effect today. While two-wheelers and carmakers are passing on the costs, commercial vehicle makers, who are struggling with weak demand, will be the worst-affected, as discount levels are already at elevated levels.

Corporate tax: Medium and small-scale companies to see their tax burden go down by five percentage points.

Loans get dearer for highly indebted companies: From FY18, banks will have to set aside three per cent more as additional provisioning and risk weight will rise by 75 basis points, or bps, if they lend further to any company with debt of over Rs 25,000 crore (Rs 250 billion).

This number will go down to Rs 15,000 crore (Rs 150 billion) in FY19 and Rs 10,000 crore (Rs 100 billion) in FY20.

Capital gains tax on non-STT transactions: Capital gains tax will be applicable on sale of shares acquired without paying securities transaction tax (STT). The new rule will apply to all non-STT paid transactions since October 1, 2004.

However, certain cases, like shares acquired in an initial public offering or through rights or bonus issue or employees stock options, would be exempt from these provisions.

GAAR:  General Anti-Avoidance Rule, or GAAR, aims to provide clarity and certainty over taxation of foreign investors.

These rules will impact entities which domicile themselves in a tax-friendly jurisdiction like Mauritius, Singapore and other places to avoid taxes.

From now on, to avail of tax benefits, an entity will have to convince the Indian tax authorities that they are running a permanent establishment in these countries and not using it as tax haven.

Illustrations: Uttam Ghosh/Rediff.com

Business Standard
Source: