Know the new income tax rules

April 1 marks the new financial year.

This means that the rules of last year are no longer valid.

There have been several changes that happened.

The New Financial Year comes with new rules.

Knowing these changes will help you plan your finances.

Payment by cash is limited

Watch out for payments you make in cash. This is because the payment limit for expenses by cash has been reduced from ₹20000 to ₹10000 per day in aggregate per person.

If you pay any capital expenses in cash beyond that number, it will not be taken into account for depreciation purposes.

Under Sec. 269ST, no person shall receive an amount of two lakh rupees or more by cash in aggregate from a person, or a single transaction or in transactions relating to one event or occasion in one day.

The penalty for violating this would be equal to the amount received.

Tax exemption limit

The Tax Exemption limit did not change from earlier figure i.e it is still ₹ 2,50,000/. This is surprising to many.

However, the rate of tax from 2.5 lakh to 5 lakh reduced to 5 percent from earlier 10 percent.

For income up to ₹3.5 lakh, a tax rebate of maximum ₹2500 is allowed.

Surcharge for high income

Those who earn more income ₹50 lakhs but under ₹1 crore will have to pay a surcharge of 1 percent of the tax. Those with income above 1 crore should pay surcharge of 15 percent.

Capital Gain rules

The rules regarding capital gain in terms of Land & Buildings were changed. The periodicity for long term Capital Gain is reduced from 3 years to 2 years.

Rules for donation

The amount of donation exceeding ₹2000 will not be eligible for deduction under section 80G unless the donation is made using a different payment mode than cash.

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