Budget 2017 takes Steps to discourage Cash transactions & curb Black Money
Various legislative steps have been taken by the Finance Act, 2017 to curb black money by discouraging cash transaction and by promoting digital economy. These prominently include placing restriction on cash transaction by introduction of New Sections 269ST & 271DA to the Income-tax Act. It has been provided that no person (other than those specified therein) shall receive an amount of two lakh rupees or more,
• in aggregate from a person in a day;
• in respect of a single transaction; or
• in respect of transactions relating to one event or occasion from a person, Otherwise than by an account payee cheque or account payee bank draft or use of electronic clearing system through a bank account. Any contravention to the said provision shall attract penalty of a sum equal to the amount of such receipt. However, the said restriction is not applicable to any receipt by Government, banking company, post office savings bank or co-operative bank. It has also been decided that the restriction on cash transaction shall not apply to withdrawal of cash from a bank, co-operative bank or a post office savings bank. Necessary notification in this regard is being issued. It has also been provided that any capital expenditure in cash exceeding rupees ten thousand shall not be eligible for claiming depreciation allowance or investment-linked deduction. Similarly, the limit on revenue expenditure in cash has been reduced from Rs.20,000 to Rs.10,000. In order to promote digital payments in case of small unorganized businesses, the rate of presumptive taxation has been reduced from 8% to 6% for the amount of turnover realised through cheque/digital mode. Restriction on receipt of cash donation up to Rs. 2000 has been provided on political parties for availing exemption from Income-tax. Further, it has also mandated that any donation in cash exceeding Rs.2000 to a charitable institution shall not be allowed as a deduction under the Income-tax Act.
Mandatory Quoting of Aadhaar for PAN Applications & Filing Return of Income
Section 139AA of the Income-tax Act, 1961 as introduced by the Finance Act, 2017 provides for mandatory quoting of Aadhaar / Enrolment ID of Aadhaar application form, for filing of return of income and for making an application for allotment of Permanent Account Number with effect from 1st July, 2017. It is clarified that such mandatory quoting of Aadhaar or Enrolment ID shall apply only to a person who is eligible to obtain Aadhaar number. As per the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016, only a resident individual is entitled to obtain Aadhaar. Resident as per the said Act means an individual who has resided in India for a period or periods amounting in all to one hundred and
eighty-two days or more in the twelve months immediately preceding the date of application for enrolment. Accordingly, the requirement to quote Aadhaar as per section 139AA of the Income-tax Act shall not apply to an individual who is not a resident as per the Aadhaar Act, 2016.
Lok Sabha Speaker congratulates the Prime Minister, Union Finance Minister, Members of Union Cabinet, Members of Lok Sabha and Officers and Staff of Lok Sabha Secretariat, Ministry of Finance & Parliamentary Affairs for completing all the Budget related processes before 1st April;
States it is a historical event;Allocated Funds will be now available with the different Departments w.e.f. from 1st April and they will have full one year to spend the same on old and new Schemes;Will also help the State Governments in preparing their Budget The Hon’ble Speaker of Lok Sabha, Smt. Sumitra Mahajan congratulated the Prime Minister, Finance Minister, all the members of Union Cabinet, Members of Lok Sabha and Officers &Staff of Lok Sabha Secretariat, Finance and Parliamentary Affairs Ministries among others on competing all the Budget related processes by 1st April, 2017. The Hon’ble Speaker said that as a result, the allocated funds to each Department will be now available to them on 1st April and they will have full one year to spend the same on old and new schemes. Hon’ble Lok Sabha Speaker further said that this has happened for the first time in the history of Independent India and is a historical occasion. The Hon’ble Lok Sabha Speaker, Smt. Sumitra Mahajan further said that for the past many decades, the Budget used to be presented in the last days of February, sometimes in March or April and delay in budgetary allocations by 4-5 months was part of the process. She further said that this timely completion of all Budget related processes will also help the State Governments in preparing their respective State Budget. The Hon’ble Lok Sabha Speaker, Smt. Sumitra Mahajan said that this has been made possible because of the cooperation and support of all the Members of the House and different political parties. She specifically thanked the Prime Minister, Finance Minister, Ministers of the Union Cabinet, the officers and staff of the Lok Saha Secretariat and those of Finance and Parliamentary Affairs Ministries among others for their contribution in achieving this mega task. She said that his was a big job and a new beginning has been made in the public interest. She thanked all once again.
Central Board of Direct Taxes requests for stakeholder’s comments on draft of Notification to be issued Under Section 10(38) of the Income-tax Act, 1961
Section 10(38) of the Income-tax Act, 1961 (‘the Act’), prior to its amendment by Finance Act, 2017, provided that the income arising by way of a transfer of long term capital asset, being equity share in a company, shall be exempt from tax if such transfer is undertaken after 1st October, 2004 and chargeable to Securities Transaction Tax (STT) under Chapter VII of the Finance (No. 2) Act, 2004. In order to curb the practice of declaring unaccounted income as exempt long term capital gain by entering into sham transactions, the Finance Act, 2017 amended the provisions of section 10 (38) of the Act to provide that exemption under this section for income arising on transfer of equity share acquired or on after 1st day of October, 2004 shall be available only if the acquisition of share is chargeable to STT. However, to protect the exemption for genuine cases where the STT could not have been paid like acquisition of share in IPO, FPO, bonus or rights issue by a listed company acquisition by nonresident in accordance with FDI policy of the Government etc, it was also provided that the Central Government shall notify the acquisition for which the condition of chargeability to STT shall not apply. In view of the above, it is proposed to notify that the condition of chargeability to STT shall not apply to all transactions of acquisitions of equity shares entered into on or after the first day of October, 2004 other than the specified transactions. In order to have wider consultation in this matter, the draft of notification proposed to be issued under section10 (38) of the Act has been uploaded on the website www.incometaxindia.gov. in. The stakeholders are requested to submit their comments/suggestions on the draft notification by 11th April, 2017 at the email address dirtpl2@ nic.in.