Amendment To The Finance Bill 2017

The Government tabled the Finance Bill 2017 with certain amendments in the Lok Sabha for approval which was passed. The President also gave his assent on 31st March 2017. The amendments to the Finance Bill 2017 are as follows:

Restriction on applicability of Section 56 (2)(x):

• The Bill had proposed to insert Section 56(2)(x) to tax sum of money or property received without consideration or for inadequate consideration was made applicable to all categories of persons.
  
  
  • It is now proposed to exempt from the aforesaid provision in respect of any sum or property from an individual to the trust created or established solely for the benefit of a relative of the individual.
  • This is a welcome change since it removes the anxiety of a lot of people on increased tax liability on succession planning through family trusts.

Mandatory requirement of quoting Aadhaar Number in the PAN application AND return of income:

• It is proposed to insert a new section 139AA which states that any person who is eligible to obtain Aadhaar Number on or after 1st July 2017 shall quote the Aadhaar Number in the application of PAN as well as Return of Income
• It further states that every person who has been allotted PAN as on 1st July 2017 and who is eligible to obtain Aadhaar Number shall intimate the same to the prescribed authority in a prescribed form and manner on or before the date to be notified in official Gazette.

Restriction on Cash transactions:

• The Bill had proposed to insert Section 269ST to restrict transactions in cash. It was proposed that no person shall receive an amount of Rs. 3 Lakhs or more:
  
  
  1. From one person in a single day or
  2. From a single transaction or
  3. In respect of transactions relating to one event or occasion from a person.
• It is now proposed to reduce the threshold limit of cash transactions from Rs. 3 Lakhs to Rs. 2 Lakhs.
• For contravention of this section, the penalty will be equal to the amount of such receipt.
• This is in line with the continuous efforts of the Government to discourage cash transactions and encourage transactions through digital mode.

TCS on cash transactions omitted:

• The Bill had proposed to delete Tax Collection at Source (TCS) on purchase of jewellery in cash for an amount exceeding Rs. 5 Lakhs. However TCS on purchase of bullion and other goods in cash for an amount exceeding Rs. 2 Lakhs was proposed to be continued.
  
  
  • It is now proposed to delete even the applicability of TCS on purchase of bullion and other goods through cash payments.

Originally published April 2017

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