As we have already seen the Income Tax Provisions for doctors and Income Tax Benefits to Non-Residents, etc. Now here you can get 8 Income Tax Provisions with effect from 1st June 2016.
8 Income Tax Provisions
There are Eight Income Tax Provisions which are applicable with effect from June 1st, 2016. Here the assessee can get latest Amendments relating to TCS and TDS, Advance Tax, Section 40(a)(ib), Section 197A, etc.
1. Amendments or Provisions Relating to TCS & TDS
(a)Here the assessee can check the increase in threshold limit of TDS on different payments which are mentioned in the given table as per the Sections of the Income Tax Act:
|Sections as per IT Act||Threshold Limit upto 31st May 2016 in Rupees||Threshold Limit from 1st June 2016 Rupees|
|Under Section 192A the payment of accumulated balance due to an employee by the trustees of the EPF (Employees Provident Fund Scheme), 1952.||Rs. 30,000/-.||Rs. 50,000/-.|
|Under Section 194BB Winnings from Horse Race.||Rs. 5,000/-.||Rs. 10,000/-.|
|The Payments to Contractors under Section 194C.||Aggregate annual limit of Rs. 75000/-.||Aggregate annual limit of Rs.100000/-.|
|The Payment of Compensation on acquisition of certain Immovable Property under Section 194LA.||Rs. 2,00,000/-.||Rs. 2,50,000/-.|
|Insurance commission under Section 194D.||Rs. 20,000/-.||Rs. 15000/-.|
|Commission on sale of lottery tickets under Section 194G.||Rs. 1,000/-.||Rs. 15000/-.|
|Commission or brokerage mentioned under Section 194H.||Rs. 5,000/-.||Rs. 15000/-.|
(b) Revision in rates of TDS on several payments specified in the relevant sections of the Income Tax Act:
|Section||TDS Rates upto 31st May 2016 in (%)||TDS Rate with effect from 1st June 2016 in (%)|
|Payment in respect of Life Insurance Policy under Section 194AD.||2%||1%|
|Payments in respect of NSS (National Service Scheme) Deposits under Section 194EE.||20%||10%|
|Insurance commission mentioned under Section 194D||10%||5%|
|Commission on sale of lottery tickets explained in Section 194G||10%||5%|
|Commission or brokerage under Section 194H||10%||5%|
(c) TCS Regarding on the sale of Vehicles, Goods or services:
These are the following amendments which have been made with effect from 1st June 2016 in the Scheme of TDS, which is given u/s 206C.
- Sub-Section 1F has been inserted.
- This Sub-Section explains that a tax rate of 1% is collected from a person being a seller who receives any amount as consideration for the sale of the motor vehicle of value exceeding Rs. 10,00,000/-.
- The payment made by the purchaser will be applicable in cash or through DD or by the issue of Cheque.
- The seller is required to pay tax at source if the bullion exceeds Rs. 2 lakhs and Jewellery exceeds Rs. 5 Lakhs. Here the tax collected is at the 1% of the sale of consideration.
Under the new provisions, the buyer of goods or services if the amount exceeds Rs. 2 lakhs then tax is collected at source at the rate of 1% with effect from 1st June 2016. Here the tax is collected in case of transaction made within the purchase of goods or provision of services exceeds Rs. 2 lakhs in part or fully is received in cash in case of a single invoice.
For clear explanation if a purchase of Rs. 2,50,000/- is made through a single invoice and the buyer gives Rs. 1,50,000/- by cheque and Rs. 1 lakh in cash the provision would be attracted, and the seller would have to collect 1% of Rs. 2,50,000/-.
Here the provisions under subsection 1D is not applicable in these 2 cases:
- No tax shall be collected at source on any amount on which the payer has deducted tax as applicable.
- Under the provisions of Sub-Section 1D, the tax does not apply if the sale of any goods or services specified in the Section other than the bullion or jewellery.
2. Amendments relating to Advance Tax
For the payment of Advance Tax, the schedule has been amended with effect from 1st June 2016 by an Individual and other non-corporate assessees. This change is effective from the financial year 2016 to 2017 onwards.
|Due Date of Installment||Amount Payable|
|On or before 15th June.||15% of Advance Tax.|
|On or before 15th September.||45% of Advance Tax.|
|On or before 15th December.||75% of Advance Tax.|
|On or before 15th March.||100% of Advance Tax.|
In the Beginning, there was no requirement of paying the Advance Tax in respect of assessees’ who opted for non-maintenance of books of accounts. Here the declared profit is at the rate of 8% of gross receipts subject to a maximum of Rs. 1 crore which limit has been enhanced to Rs. 2 crores with effect from the financial year 2016-2017.
In such cases such assesses whose businesses are eligible for applying tax at the rate of 8% on gross receipt under section 44AD of the Income Tax Act are also now required to pay 100% of the tax due on such income before 15th March from the financial year 2016-2017 onwards.
3. Expenses incurred by the assessee covered under Section 40(a)(ib) w.e.f 1st June 2016
A new levy at the rate of 6% is referred to as Equalization levy has been made applicable to the payment of online advertisements. The provision for digital advertising space or any other facility or service for the purpose of online advertisements or any other notified services to a non-resident who does not have a PE (Permanent Establishment) in India provided to
- a resident in India or
- a non-resident having a PE (Permanent Establishment) in India.
Equalization levy is to be deducted by the payer from the amount paid or payable to the non-resident service provider.
Any consideration paid or payable to non-resident for a specified service on which equalization levy is applicable that will be disallowed from 1st June 2016 that is the assessment year 2017-2018 in the following cases:
- Equalization levy is deductible, but such levy has not been deducted.
- Equalization levy is deductible, and it is so deducted, but it is not deposited on or before the due date of submission of return of income under section 139(1).
However, the equalization levy is deposited or deducted in a subsequent year; the aforesaid consideration shall be allowed as a deduction in computing the income of the previous year in which such levy has been paid.
4. Enabling of Filing of Form 15G or 15H for Rental Payments Section 197A w.e.f 1st June 2016
The Form 15G can be filled up by a resident taxpayer requesting for non-deduction of TDS from certain payments made to him if the income is below the tax exemption limit. Similarly, Form 15H can be submitted by senior citizen above 60 years of age and super senior citizen of above 80 years of age. The scope of income that can be included in the above forms is as shown below:
- The amount received from withdrawal from EPFS (Employees Provident Fund Scheme).
- Interest other than Interest on Securities.
- Dividend Income.
- The sum received from Life Insurance Policy.
- Rental income has also been allowed to be included in the declarations.
- The sum received from National Savings Scheme.
5. Relief to a non-resident for furnishing PAN under Section 206AA
The Section 206AA, among other things, provides that any person who is entitled to receive any sum on which tax is collected at the source shall furnish his PAN to the deductor. If failing to submit then, the tax shall be deducted at the rate mentioned in the relevant provision or at the rate of 20%, whichever is higher.
The Latest Amendment that will effect from 1st June 2016, the Sub-Section (7) of the said section has been substituted to provide that the above provisions shall not apply to a non-resident or foreign company who does not have PAN subjected to such condition as may be prescribed.
6. Amendment to section 133C of Income Tax Act
This Section 133C allows, the prescribed Income Tax authority to issue the notice calling for documents and information for the purpose of verification of information in its possession. This section 133C has been amended with effect from 1st June 2016 to provide further that the information and documents so obtained by the prescribed Income Tax authority may be scrutinized. The outcome of such scrutiny may be made available to the AO (Assessing Officer) for further necessary action if any.
7. Income Declaration Scheme 2016 w.e.f 1st June 2016
If the Assessee has any income to declare then, he may consult the Income Tax Department. The eligibility for the declaration is subject to certain specified conditions, and the tax involved is 45% of the amount proposed to be declared.
8. The Direct Tax Dispute Resolution Scheme 2016
In case if you have any questions regarding the pending before the Commissioner of the Income Tax (Appeals) and the issue involved is not entirely in your favor you may decide to make a choice from a range of possibilities for said scheme.
Also Read: Income Tax Provisions to Non-Residents