4 Important Income Tax Changes You Must Know

Today is April 1^st. It’s the beginning of the new Financial Year 2017-2018. A very important day for you and crores of citizens of this Nation. The Finance Minister Arun Jaitley, presented the Union Budget 2017 on February 1^st 2017. This was a highly anticipated Budget and the Finance Minister did not disappoint. The highlight of this Budget was the infrastructure status given to affordable housing. This is a big boost for affordable housing and you can now, dare to dream of your first home.

The beginning of the Financial Year is the best time for you to do Tax Planning. “A Rupee Saved Is A Rupee Earned.” Tax evasion is a crime. Tax avoidance is not. It is your duty to make use of tax deductions and tax exemptions to save your hard earned money.

Find Tax Planning difficult? We at IndianMoney.com will make it easy for you. Just give us a missed call on 022 6181 6111 to explore our unique Free Advisory Service. IndianMoney.com is not a seller of any financial products. We only provide FREE financial advice / education to ensure that you are not mis-guided while buying any kind of financial products.

4 Important Income Tax Changes You Must Know

1. Cut in Income tax rates if you earn yearly income between INR 2.5 Lakhs and INR 5 Lakhs

The Finance Minister wants to put more money in your and other citizen’s hands, so that you can shop and spend. The Finance Minister cut income tax rates from 10% to 5%, for you and other citizens, earning between INR 2.5 Lakhs to INR 5 Lakhs.

This move by the Finance Minister can help you save tax up to INR 12,500 a year. The cut in income tax rates also helps you, if you fall in the higher tax brackets.

2. Penalty for delay in filing income tax returns

Are you always late while filing income tax returns? You better watch out. If you delay filing income tax returns for this Financial Year 2017-2018, you would have to pay a penalty of INR 5,000, if filed by 31^st December 2018. The penalty would be higher, if ITR filed beyond this date.

You are a small tax payer earning income up to INR 5 Lakhs? The penalty is restricted to just INR 1,000.

See Also: Income tax return status

3. Aadhaar compulsory while filing income tax returns

From July 1^st it is compulsory for you to disclose Aadhaar number while filing income tax returns. You will also have to link Aadhaar to PAN by December 31^st 2017.

Tax evaders in our country have two, three or multiple PAN cards, which they use to evade tax. You and other citizens have to mandatorily link Aadhaar to PAN, otherwise your PAN is invalid. Tax evaders have no escape route and have to pay taxes.

How to link PAN Card with Aadhaar?

To link your PAN Card and Aadhaar, you and other tax payers will have to first register on the income tax e-filing portal.

• You then login to your e-filing portal of the income tax department by entering the log-in ID, password and date of birth.
• A pop-up window will appear on the screen which will prompt you to link your Aadhaar to your PAN card.
• You will have to enter your Aadhaar number in the field provided. Before entering your Aadhaar number, make sure your name, gender and date of birth, match with the details in your PAN Card.
• Once you are confident all details match, fill in your Aadhaar Number and click on ‘Link Now’.
• Once this validation is done, Your Aadhaar Number gets linked to your PAN Card.

​4. Tax filing just got easier

The income tax department has introduced a single page form for filing income tax returns (ITR). You can file income tax returns using this form, if you earn an income up to INR 5 Lakhs, excluding any business income.

The income tax department will not scrutinize your returns, if you are filing ITR for the first time in this category.

After demonetization, tax in India is changing. Evasion of taxes is getting really difficult. All escape routes are slowly closing. You have no option but to pay your taxes. It would be wise to read these points and get ready for the Financial Year ahead. Be Wise, Get Rich.