Special physically . Further , tax authorities will no longer be able to make any adjustment in returned income on the basis of income appearing in tax credit statement ( form 26AS ) or tax withholding certificates ( form 16 / 16A ) at the time of summary assessment . This will apply for the financial year 2017-18 onwards and will avoid filing of unnecessary rectification applications by the tax payers .
Tax-free withdrawal from National Pension Scheme : The Budget has proposed to extend the exemption of 40 per cent of the total amount payable to non-employees subscriber on closure of NPS account or opting out of the same . Earlier , this exemption was available to employee subscribers only . This is a welcome move . However , the Budget has not extended the similar exemption to the non-employee subscribers on their partial withdrawal , which is presently available to employee subscribers only . This is something which may require a relook .
Restricting exemption under Section 54EC to sale of land or building or both : The provisions of Section 54EC provides exemption from LTCG on sale of any asset , if the specified bonds are purchased within six months from the date of sale of asset . There is also a cap of `50 lakh per annum . It is proposed to restrict the said exemption only to LTCG from land or building or both . Further , the holding period for the specified bonds is also proposed to be raised from three years to five .
Taxation of capital gains from immovable property : Presently , while taxing the capital gains ( Section 50C ), business profits ( Section 43CA ) and
It may be noted that cess collected under a particular category can only be spent for the purpose for which it was collected
other sources ( Section 56 ) arising out of transactions in immovable property , higher of the sale consideration or stamp duty value is adopted . This results in taxation of difference as income in the hands of both , namely buyer and the seller . The finance minister has proposed that no adjustments shall be made in case the variation between stamp duty value and the sale consideration is not exceeding five per cent . This will really provide an ease in case of genuine transactions and unnecessary litigation for a small difference . To sum up , while senior citizens have been looked after well , the salaried class may perhaps not be happy with this Budget . It looks like the expansion of tax base for income tax and the GST might not have given enough confidence to pass on some tax relief to the salaried class . Although the finance minister indeed recognised that 1.89 crore salaried tax payers paid taxes of `76,306 on an average , the individual businessmen , who almost equal the salaried individuals in numbers , paid taxes of `25,753 on an average . The tax authorities will continue to focus more on compliance to improve tax collections . One strong message the government has given through this Budget is that they are sensitive to the farmers and the poor section of society , which is perhaps needed as well . Future will tell how this government will walk the talk . Every big journey begins with a small step . If the government succeeds in implementing the proposals as envisaged for the farmers and the poor , it would be a great step in building a new and better India !
The author is Partner and Leader , Personal Tax , PwC India ( The views expressed are personal )
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