1. No change in exemption slab. However, the slab rate of tax between Rs. 2.5 lakh and Rs. 5 lakh will be reduced from 10% to 5%.
2. Rebate under section 87A will be available only if total income (i.e., taxable income) of a resident individual does not exceed Rs. 3.5 lakh. In such a case, rebate will be 100% of income-tax or Rs. 2,500, whichever is lower.
3. Individual/HUF/AOP/BOI/artificial juridical person having income above Rs. 50 lakh will be subject to surcharge of 10% of income-tax. In case of these taxpayers (as well as other taxpayers) having income above Rs. 1 crore, the current surcharge will continue.
4. A small size domestic company (total turnover/gross receipt in the previous year 2015-16 does not exceed Rs. 50 crore) will pay tax @ 25%.
5. Under presumptive income-tax scheme of section 44AD, business income will be calculated @ 6% in respect of turnover of the gross receipt which is received by an account payee cheque/draft/electronic clearing system on or before the due date of submission of income.
6. Business expenditure in cash/bearer cheque/crossed cheque above Rs. 10,000 (as against Rs. 20,000) will be disallowed under section 40A(3). Likewise, under section 80G, donation given by any mode other than cash in excess of Rs. 2,000 (as against the present ceiling of Rs. 10,000) will not be eligible for deduction.
7. Transactions above Rs. 3 lakh should be permitted only by an account payee cheque/draft/use of electronic clearing system through a bank account. The limit of Rs. 3 lakh will be applicable in respect of a single transaction or in respect of a number of transactions with a person in a single day.
8. A new section 194-IB has been proposed to be inserted. Under this section, an individual/HUF (other than those who are covered by section 44AB) shall be liable to deduct tax at source if payment of rent to a resident exceeds Rs. 50,000 per month. The deductor will not be required to obtain TAN.
9. The period of holding in the case of immovable property (land or building) has been reduced from 36 months to 24 months to become long-term capital assets.
10. In the case of joint development agreement, capital gain shall be taxable in the previous year in which completion certificate is issued.
11. For long-term capital gain, the base year will be shifted from 1981 to 2001. Fair market value on April 1, 2001 can be adopted as cost of acquisition if an asset is acquired prior to April 1, 2001.
12. No notional income for house property held as stock-in-trade.
13. MAT/AMT credit can be carried forward for 15 years (as against the present time-limit of ten years).
14. Political party cannot accept donation above Rs. 2,000 in cash.
15. The provisions regulating specified domestic transaction under section 92BA will not be applicable in the case of specified persons under section 40A(2)(b).
16. Where consideration for transfer of share of a company (other than quoted share) is less than the Fair Market Value (FMV) of such share determined in accordance with the prescribed manner, the FMV shall be deemed to be the full value of consideration for the purpose of computing income under the head "Capital Gains".
17. Disallowance provisions under section 40(a)(ia) will be extended to income chargeable under the head "Income from other sources".
18. Loss from let out property exceeding Rs. 2 lakh will not be deductible from income other than house property income during the current year (carry forward will be allowed).