As we step towards the new financial year, we are also bracing for some major changes in financial rules that will be effective from April 1, 2017. As Finance Minister Arun Jaitley presented the 2017 Budget, he proposed some tax-related changes. Amid the debate over the implementation of these changes, they have now become laws as the Finance Bill was passed by the Lok Sabha on Wednesday, completing the budgetary exercise for 2017-18.
With effect from April 1, many rules are set to be changed. Here we are listing some of the key changes in rules that will remain effective in financial year 2017-18.
Sale, registration of BS-III vehicles banned from April 1
The Supreme Court has banned the sale and registration of vehicles which are not BS-IV compliant from April, when the new emission norms come into force.
Observing that health of the people is “far, far more important than the commercial interests of the manufacturers”, the apex court said that the makers of such vehicles have declined to take “sufficient proactive steps” despite being fully aware that the firms would be required to manufacture only BS-IV compliant vehicles from April 1, 2017.
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The court also prohibited registration of vehicles, which do not meet Bharat Stage-IV emission standards, from April 1 except on a proof that such a vehicle was sold on or before March 31.
1. For those who have income between Rs 2.5 lakh and Rs 5 lakh, the tax rate will be halved to 5 per cent from current 10 per cent. But, the rebate under Section 87A will be reduced from Rs 5,000 to Rs 2,500, while for taxpayers having income above Rs. 3.5 lakh, the rebate will not be applicable.
2. Individuals having income ranging from Rs 50 lakh to Rs 1 crore, a surcharge of 10 per cent will be applicable (existing surcharge of 15 per cent remains the same for individuals having income above Rs 1 crore).
3. The government will introduce a simple one-page form for filing income tax returns for those having income up to Rs 5 lakh other than business income.
4. If search operations discover undisclosed income and assets more than Rs 50 lakh then the Income tax officials can reopen tax cases for upto 10 years.
5. If individuals having taxable income do not file their returns on time, the they will have to pay a penalty of up to Rs 10,000 from Assessment Year 2018-19.
6. The borrowers of self-occupied properties will get a deduction of Rs 2 lakh on interest repayment on home loan. However, the borrower can only claim a deduction of up to Rs 2 lakh per year on rented properties after adjusting for the rental income.
7. For rental payments above 50,000 per month, individuals will be required to deduct a 5 per cent TDS (tax deducted at source).
8. No tax will be applicable for partial withdrawals from National Pension System (NPS). NPS subscribers will be able to withdraw 25 per cent of their contribution to the corpus for emergencies before retirement. Withdrawal of 40 per cent of the corpus is tax-free on retirement.
9. Aadhaar number will be must for applying for PAN and filing of income tax returns from July 1. The limit on cash transactions has been set at Rs 2 lakh in order to curb black money.
SBI's new rules from April 1
1. First three cash deposits in the month are free. The bank will charge Rs 50 for each deposit after the first three. The limit is prescribed for saving bank accounts.
2. The cash transaction charges can be as high as Rs 20,000 for current account holders.
3. The bank account holders will have to maintain a minimum balance or Monthly Average Balance (MAB), failing which a fee up to Rs 100 plus service tax will be imposed. If the account holders falls short of 50 per cent or less of the MAB, then the bank will charge Rs 50 plus service tax.
4. Cash withdrawal from ATMs will be charged after the first three transaction for other banks and first five transactions from SBI ATMs.
5. Rs 20 will be charged after three transactions from other bank ATMs and Rs 10 for withdrawal from SBI ATMs.
6. If the account holder maintains a minimum balance of Rs 25,000, there will be no charge on withdrawals from SBI ATMs. A minimum sum of Rs 1 lakh needs to be maintained to avoid withdrawal charges in case of other bank ATMs.
7. For SMS alerts per quarter, Rs 15 will be charged from debit card holders who manage to maintain average quarterly balance of up to Rs 25,000 during the three months period.
8. No charge for UPI/ USSD transactions of up to Rs 1000.
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Milk to be costlier by Rs 2 in Karnataka from April 1
Nandini toned milk is getting costlier by Rs 2 per litre from April 1 as the Karnataka Milk Federation (KMF) has hiked the prices due to drought conditions in the state.
Toned milk would cost Rs 35 per litre, up from Rs 33 in southern Karnataka, including Bengaluru, Mandya, Kolar, Tumakuru, Mysuru, Hassan and Shivamogga.
The half a litre of curd would now cost Rs 21 against the existing Rs 20. "The procurement of new packing film with new MRP requires time.
The present milk packing film with old printed rates will be used till packing film with new MRP is sourced. Nandini milk and curd with new MRP will be available in the market in old packing film, so public are requested to co-operate,'' KMF authorities said.
In some districts of North Karnataka, including Belagavi, Raichur, Ballari and Dakshina Kannada, milk price hike is Re 1 (Rs 34 to Rs 35). In Dharwad, Haveri, Uttara Kannada, Vijayapura and Bagalkote, price would be Rs 36 per litre (against the present Rs 35) while in Kalaburagi, Bidar and Yadgir, price will be hiked from Rs 36 to Rs 37 per litre.
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The Central GST (CGST) bill—one of the four legislations introduced, states that any lease, tenancy, easement, licence to occupy land will be considered as supply of service.
Also, any lease or letting out of the building, including a commercial, industrial or residential complex for business or commerce, either wholly or partly, is a supply of services as per the CGST bill.
The GST bills provide that sale of land and, sale of building except the sale of under construction building will nether be treated as a supply of goods not a supply of services. Thus GST can’t be levied in those supplies.
‘Goods’ in earlier drafts of the bills were defined as every kind of movable property other than money and securities but includes actionable claim. ‘Services’ were defined as anything other than goods. It was thought that GST may be levied on supply of immovable property such as Land or building apart from levy of stamp duty.
But the bills presented in Parliament have now clarified this position.
Stamping of passengers’ hand baggage at seven major airports, including Delhi and Mumbai, will be done away with from April 1, the CISF has said.
The other airports that will begin the new procedure from the morning of April 1 include the ones in Bengaluru, Hyderabad, Kolkata, Cochin and Ahmedabad.
The move, the CISF chief said, will enhance “passenger experience and provide hassle free security environment to them”.
Govt slashes small saving schemes interest rates by 0.1%
The government has lowered interest rates on small saving schemes like PPF, Kisan Vikas Patra and Sukanya Samriddhi scheme by 0.1 per cent for the April-June quarter, a move that would prompt banks to cut their deposit rates.
For April-June, these have been lowered by 0.1 per cent across the board compared to January-March. However, interest on savings deposits has been retained at 4 per cent annually.
Since April last year, interest rates of all small saving schemes have been recalibrated on a quarterly basis.
A finance ministry notification said investments in the public provident fund (PPF) scheme will fetch lower annual rate of 7.9 per cent, the same as 5-year National Savings Certificate. The existing rate for these two schemes is 8 per cent.
Kisan Vikas Patra (KVP) investments will yield 7.6 per cent and mature in 112 months.
The one for girl child savings, Sukanya Samriddhi Account Scheme, will offer 8.4 per cent annually, from 8.5 per cent at present, while it will be the same at 8.4 per cent for the 5-year Senior Citizens Savings Scheme. The interest rate on the senior citizens scheme is paid quarterly.
Term deposits of 1-5 years will fetch a lower 6.9-7.7 per cent that will be paid quarterly while the 5-year recurring deposit has been pegged lower at 7.2 per cent.
General insurance premium set to go up from April 1
Car, motorcycle and health insurance will cost more from April 1 with regulator Irdai giving go-ahead to insurers for revision in commission for agents. The change in premium after modification will be limited to +/- 5 per cent of the existing rates.
The increase will be in addition to the enhanced third party motor insurance rates, which too will come into affect from April. The Irdai (Payment of Commission or Remuneration or Reward to Insurance Agents and Insurance Intermediaries) Regulations, 2016 comes into effect from April 1, 2017.
The regulations, the regulator said, bring about certain revisions in commission/ remuneration rates and also introduce the reward system. These may trigger insurers to revisit the pricing of their products in so far as the costing input relating to commission or remuneration is concerned, said the Insurance Regulatory and Development Authority of India (Irdai).
However, the change in premium due to the new regulations should be “limited to +/- 5 per cent of the existing premium rates of products/add-ons”, it said.
Further, insurers will have to give a certificate that there is “no detrimental change” in premium rates or any other provision of policies already sold.
Haryana Transport Department to collect motor tax from April 1
In Haryana, all types of taxes related to vehicles would be collected by Regulatory Wing of the Transport Department from April 1. The Haryana Motor Vehicles Taxation Rules, 2016, has been notified in this regard, an official release said.
Information on the tax to be deposited could be checked on the website of the Department- www.haryanatransport.gov.in. Heavy fine would be imposed on any vehicle found without motor tax in the Haryana region, the release said.
Volvo Auto India to hike prices by up to 2% from April
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Volvo Auto India will increase prices of vehicles across its model range by up to 2 per cent from April. The increase is due to rise in input costs which affects all models sold in India, the company said in a statement.
The company sells a range of luxury cars and SUVs, from the V40 hatchback to plug-in hybrid SUV XC90 Excellence, which are priced between Rs 25.49 lakh and Rs 1.25 crore.
Ford India plans to hike prices by up to 2% from April
Automaker Ford India plans to increase prices of vehicles across its model range by up to 2 per cent from April in order to partially offset rise in input costs. The company sells a range of vehicles in the country, from Figo hatchback to iconic Mustang sedan, which are priced between Rs 4.65 lakh to Rs 66.3 lakh (ex-showroom Delhi).
Canara Bank cuts MCLR rate by 10 bps to 9.4 pc from April 1
Public sector Canara Bank has announced 0.10 percentage point reduction in its MCLR-based lending rate to 9.40 per cent from April 1, making loans cheaper for consumers.
Canara Bank said all rupee loans and advances linked to the base rate will accordingly carry reduced rate of interest by 10 basis points. Banks revise their lending rates which is based on base rate every month.
(With inputs from PTI)