Income tax budget 2016 for announced finance minister

Circular For Taxpayer or Assesses to Guide Aireyes Knowledge of Income tax Budget 2016.

In this Last time our finance minister Arun jetly announced to major changes in income tax in India. we are deeply or airily know the who is changes and which section changes in Last budget.we are proudly feel to inform the Basic guides in income-tax to all Indian people or taxpayer or assesses.

Let’s go to we are know where is changes in income tax rules.

First know Calculation of income slab changes as under :-

80+ ages senior citizen person exempt income 5Lakhs Income tax paid NIL.. after 5Lakhs to 10 Lakhs Income to Paid – 20% income tax. 10 Lakhs to above 30% Income tax.

60 to 80 ages senior citizen exempt income 3Lakhs. Income tax paid is NIL. 3Lakhs to 5Lakhs Income to Paid -10% Income tax. 5Lakhs to 10Lakhs Income to paid – 20% income tax.10Lakhs to above – 30% income tax.

Not above 60+ ages taxpayer or assesses exempt income 2.5Lakhs income tax paid is NIL. 2.5Lakhs to 5Lakhs income to paid -10% income tax.5Lakhs to 10Lakhs income to paid-20% income tax.10Lakhs to above -30% income tax.

As above income slab is only individual or HUF. Other than Partnership Firm,Company, Trust,Govt.Body,Co op Society,Local Authorities, BOis,AOIs etc.. Paid flat 30% income tax on Net income.

Assessment Year 2016-2017 income slab in as above.but when Exempt Income tax U/s 87A is income tax exempt amount in 2000/- in A.Y.2015-16. but A.Y.2016-2017 changes increase limit of 5000/-. (Maximum Net income is 5Lakhs not liable to above 5Lakhs income to exempt in u/s 87A)

Education cess ,Higher Education Cess is extra on income tax is 3%. Not changes in Surcharges. but when Any Company,Partnership Firm, Individual,HUF, Net income is 1Cr.above to Paid extra surcharge is 15% on income tax amount.

Changes in Deduction Under Chapter VI A Section is as under :-

U/s 80 C (include 80-CCC investment)  Deduction limit increase 1Lakhs to 1.5Lakhs.

u/s 80-CCD (National Pension Scheme)  extra deduction in 50,000/- if invest in current year.

U/s 80- D  (mediClaime) – If taxpayer is Senior citizen to limit of 30000/- in paid mediclaim. If taxpayer not Senior citizen to limit of 25000/- (when A.Y.2015-16 limit is 15000/-)

Housing Loan Interest Paid :- A.Y.2016-17 when any taxpayer or assesses give a loan and paid a interest expenses limit of 2Lakhs.but When taken a loan period is 3 year to completed loan this loan period increase in 5years.

Professional Gross Receipt Income :- Professional person or taxpayer limit is Rs.25 Lakhs to increase 50Lakhs.but Gross Receipt Income less than 50Lakhs to paid a 50% Net Profit is treated income. If less than 50% net profit to compulsory liable to audited in professional income.Who is Professional Person ? Definition of Professional is Doctor,Advocate,Consulting Engineer,Chartered Accountant,Architect, Technical Consultant Engineer, or In treated in Professional Business to announced a income tax department.This Provision for Liable to HUF,Individual,Partnership Firm whose carry on professional Business.

Income-Tax Audit Limit :-

                        Individual,HUF,Partnership liable to Audited in accounts, Turnover limit 1Cr to Increase 2Cr.If Turnover is less than 2Cr to compulsory shown 8% Net profit. ( Included to all expense, depreciation,Partner remuneration,Partner interest etc.. Expenses ). If less than 8% net profit to compulsory liable to tax audit under 40B.but when Partner ship Firm liable to audited to not liable to deduction in Partner Interest,Partner Remuneration,Partner Salary.

Liable to Advance Tax Paid :- As under Paid advance tax by assesses or taxpayer.

any year last date of 15 June -      15% Paid Advance tax –limit of Net profit 12% paid a advance tax.

any year Last date of 15 Sept.      45%- Paid Advance tax- limit of Net profit 36% paid a advance tax.

any year Last date of 15 Dec.      75%- Paid Advance tax – As Per taxpayer calculation to net profit on paid advance tax.

any year Last date of 15 March     100%-Paid Advance tax – As Per taxpayer calculation to net profit on paid advance tax.

Investment in Central Govt.Soverian Gold Bond Scheme,2015. If any taxpayer or assesses investment this scheme to it’s investment treated Capital Gains. and when received a amount is tax free.and Received on interest is also tax free.

Any Product to Sales or Any Paid Service :-  Dated 01-06-2016 as per any taxpayer or people any type of sales or service provided and received amount Rs.2lakhs or above to compulsory Collect 1% TCS tax and Received Challan and Filed TCS Return.

Income Declaration Scheme 2016 :-

        Any people or taxpayer earn money but not show in accounts this scheme is provide to Income declare and Paid 45% tax on not shown in accounts income. if any inquiry or any procedure taken by income tax department in any taxpayer or assesses to Income declaration this scheme,2016.Flat tax 45% on total income declaration, Assesses not liable to paid extra charges like Panelty,Interest,etc.. only paid 45% Tax on declaration Income.

Assessment or Scrutiny :-  Now a Income tax department started a E paperless Assessment procedure start like if any taxpayer or assesses choose in your case in scrutiny so income tax department send a notice by email, accepted any answer or question by email. E-Paper less assessment scheme. Save Tree- Save Nature.

Tax on Share of Listed or unlisted company :-  If any people Purchase a unlisted companies share or sale unlisted companies share to treated a Capital Gains. any assesses or taxpayer earn in capital gains to Paid 10% income tax on earn capital gains.

Changes of  Tax deduction at sources [TDS] Rates :- As under changes in Rate of TDS.

Section 193 :- Interest Paid above 10,000/- in Tax savings Bond, Deducted tax rate is 10%. If Not give a PAN no. by taxpayer to Deducted tax rate is 20%.

Section 193 :- Interest Paid above 5,000/- on Public Companies debentures, Deducted tax rate is 10%. If Not give a PAN no. by taxpayer to Deducted tax rate is 20%.

Section 194A :-Interest Paid above 10,000/- in year by  Co.op bank or nationalized bank,Post office, Deducted tax rate is 10%. If Not give a PAN no. by taxpayer to Deducted tax rate is 20%.

Section 194C: - Any Taxpayer Paid amount on Contract,Sub-Contract,Advertisement Expenses to Individual or HUF,Deducted tax rate is 1%. If Not give a PAN no. by taxpayer to Deducted tax rate is 2%.

                                Any Taxpayer Paid amount on contract ,Sub-Contract,Advertisement Expense to Company or Partnership Firm, Deducted tax rate is 2%.

                                Any Transporter owner of  10 or less then 10 trucks to provide service of transportation to Only give PAN No. not liable to Deducted tax on paid amount.

                                Any Transporter owner of  10 or less then 10 trucks to provide service of transportation to not allotted or received a PAN to deducted tax rate is 20%

Any Transporter owner of 10 above trucks to provide

service of transportation,Deducted tax rate is 2%.

Any Transporter owner of 10 above trucks to provide

service of transportation,Deducted tax rate is 20%.

Note :- If One time Paid Rs.30,000/- or Yearly One party paid Rs.75,000/- liable to deducted tax on Paid amount and filed TDS return before deposit tax on nationalized bank.

194H :-  Current year Financial Year 01-04-2015 to 31-05-2016 till day to Paid Commission or brokerage Rs.5000/- above to deducted rate is 10%.

                After 01-06-2016 to paid commission or brokerage increase limit of Rs.15,000/- above to deducted rate is 5%.

194J :- Any Person or taxpayer paid a Technical Fees or Professions Fees  above Rs.30,00/-  to deducted rate is 10%.

194JA :- This Section is new when any Person Buy any type of Fixed Assets [ not treated a non-agricultural land] above Rs.50,00,000/- to buyer deducted amount in 1% on sales amount.then deducted and deposited in bank after filed TDS return.

194LA :- Any type fixed assets acquisition Paid amount to deducted rate is 10%. Limit of Paid amount above 2,50,000/-.

Note :- If any deductes not allotted PAN no., So, Deducted rate is 20%.

Form No. 15-G/15-H :-  Dated 01-06-2016 to announced to any people or taxpayer paid a rent in calculation on house property income. to house owner Received a 15-G or 15-H.

Don’t or Do 

1.           Any type of transaction like Purchase Goods or Business related expense more than 20,000/- Paid by D.D.or A/c pay cheque. Do not Paid Cash in this transaction.otherwise cash transaction not treated in business expense. This Cash expenses not allow in you Business or personal accounts.

2.           Any type of transaction related to Purchase Goods or service and Business related expenses Paid by D.D. or A/c pay cheque. If any Consumer Received payment on behalf of Sales of Goods and Consumer deposit cash in bank. This type transaction treated in cash transaction. Always Paid amount more than 20,000/- in D.D.or A/c pay cheque.

3.           Do not received any type of Deposit amount or Loan amount in more than 20,000/-. always received in cheque or D.D.

4.           Any person or Customer or Expenses paid by one time or one year not more than paid Rs.35,000/- in cash. This Cash transaction not allowed in accounts. This type transaction not deducted in your Profit or business.

5.           If any party or customer Paid or received by NEFT or ECS transaction. This type transaction allowed. This new circular allowed to ECS transaction for received or Payment of any type of expenses or Deposit.

80G :- If any taxpayer or assesses get benefit of 80G in your income tax return. Attention for if any taxpayer or assesses paid a donation Rs.10,000/- above amount in Cash. This type transaction not allowed to deduction in income tax return. Always Paid a Donation to any Trust, Colleges, University, Library, to Rs.10,000/- above amount  paid a by cheque or D.D..

Life Insurance Policy :-

                        if any taxpayer or assesses get benefit of life insurance policy return value treated a taxable. but any taxpayer or assesses get a insurance policy and paid premium in 10 time high take a policy to this policy when matured to received amount is tax free.

For example :- If you buy Life insurance Rs.1,00,000/-

and yearly paid premium Rs.5000/- to this type Policy matured. This matured amount is tax free.

Bank Interest :-  Any taxpayer or assesses received bank interest in exempt limit of Rs.10,000/-.

Housing Loan Interest :- before year Housing loan interest exempt limit is Rs.1,50,000/-  now increase limit of 2,00,000/-. more information know Click here.

As under Compulsory use of PAN No.

1. Buy or Sale Fixed Assets :- any people or assesses or taxpayer buy a Fixed assets like Building, House,Land, in Purchase amount above 10Lakhs or Valuation Calculation Rs.10Lakhs to Compulsory write or give a PAN No.
2. Vehicle Purchase or Sale :- any people or assesses or taxpayer buy a Vehicle [any vehicle]  to compulsory give a PAN No.
3. Fixed Deposit :- any taxpayer or people deposit in Rs.50,000/- more amount in any bank,co op bank, Post office, NBFC company etc..to compulsory give a PAN No.
4. Buy or Sale of Securities :- Rs.1Lakhs to more amount contract in securities to compulsory give a PAN No.
5. open Bank Account :- any people want to Open a bank account to compulsory give a PAN No. otherwise fill up Form No.60.
6. Cash Pay to Banker’s Cheque,Demand Draft,Pay Order :- any people or taxpayer or assesses paid a amount for Rs. 50,000/- more use of D.D. or Banker’s Cheque to Compulsory Give PAN No.
7. Cash Deposit in Bank :- any people deposit in one day amount in Rs.50,000/- to compulsory Give a PAN No.
8. Foreign Tours or Local Tours :- any people Pay Rs.50,000/- more amount for foreign tours or Local tours to compulsory Give a PAN No.
9. Mutual Fund :- any people or taxpayer buy a Mutual fund unite more than Rs.50,000/- to Compulsory Give a PAN No.

Agriculture Produce Sale or Purchase :- Any people or Partnership Firm buy a agricultural produce by farmer and paid amount is above Rs.2,00,000/- to compulsory pay a Cheque or D.D.and received Farmer PAN No. for storage data.any people buy or sale agricultural produce in market to compulsory pay a amount in cheque.and collect PAN No.each party or Farmer. any person give a PAN . but taxpayer or assesses to clarify the Received or taken PAN No. is write or wrong. if PAN No. is wrong to liable to buyer or sales.

How to calculation Stock Valuation :-

Any taxpayer or assesses most important Question , How to Calculate Closing Stock :-

Simple Costing Method :- Purchase Value+State Govt.Tax +Central Govt.Tax+Transportation Charges+Labour Charges + other Charges ( only Purchase related charges including) = Closing Stock.

                                        or

  Goods Market Value ( sales price in Market)  Both are the Less than value is treated Closing Stock. Closing Stock Values calculation standard system is FIFO ( First in First Out). First Purchase Goods First Sales in Stock System.

If Paid on Interest of Goods, Paid Interest on Calculate in Closing Stock. any other expenses like Godown Rent, Godown related expenses, not add in calculate the Closing Stock, If income tax department shown in this type expenses calculated in closing stock. so, Income tax department added a other expenses in Net Profit to assesses liable to Paid tax in additional amount.

Incas of Assesses or Taxpayer is Works Contractor or Builder means real assets related business carry on as per under system calculation to Valuation of Stock.

Calculation of Stock in Cost Price of Goods,Purchase Material in show closing stock. and Also added a Work in Process Stock also shown in Profit and Loss a/c.

If Pay a Labour Work and pay a before payment on behalf of Purchase Goods this type Payment not added Profit and Loss a/c. this type transaction not a allow income tax department in expense.

If received a amount In advance of House Booking This type Received Amount not shown in Profit and loss a/c. Received amount carry on Balance sheet.

About Author :Ketankumar Accountingwale

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