Starting Wednesday, a number of tax schemes, including the new black money compliance window, will come into effect, while the tax outgo for some businesses and most individuals will see a marginal rise with a new levy on cross-border digital transactions and the Krishi Kalyan Cess kicking off.
June to December “The Direct Tax Dispute Resolution Scheme, 2016 shall come into force on June 1 and declarations may be made on or before December 31 for tax arrears and specified tax,” the Finance Ministry said on Tuesday.
It further said that the provisions for imposing and collecting equalisation levy at the rate of 6 per cent will come into effect from June 1.
Tax evaders will also get a chance to come clean with the income declaration scheme starting Wednesday.
The four-month compliance window will allow persons with undisclosed income in the country to come clean by paying tax, penalty and surcharge of 45 per cent of fair market value.
TDS rates revised The rates for tax deducted at source (TDS) on payments for life insurance, small savings deposits, insurance commission, sale of lottery tickets and commission or brokerage will also be halved from June 1. Further, the threshold for TDS on various payments will also be hiked.
Now, no TDS will be deducted on payments up to ?50,000 from retirement savings to employees and annual payments of up to ?1lakh to contractors.
These taxation proposals were announced by Finance Minister Arun Jaitley in the Budget 2016-17 and are aimed largely at making the Income-Tax Department more taxpayer-friendly and revenue mobilisation for the government.
New levies But what will pinch the pockets of some individuals, is a 1 per cent tax will be levied at source (TCS) on purchase of luxury cars of over ?10 lakh.
The Krishi Kalyan Cess that will be levied at the rate of 0.5 per cent on all taxable services will also come into effect from June 1.