Get ready for the shower of changes in Tax laws from 1st June 2016!

Jun 2, 2016 by

Arjuna (Fictional Character): Krishna, this year, the government has brought various changes in income tax, service tax and other tax laws and also has brought scheme for tax payment. It is said that many of such changes will be effective from 1st June 2016. What are they?

Krishna (Fictional Character): Arjuna, June month is the month of monsoon. Everyone would be keeping an eye towards rainfall from 7th June onwards. Now the government has made shower of various changes in tax laws this year. Only God knows that when rain will come and how much, but all these changes in tax laws will be effective from 1st June. So it is important that each and every taxpayer carries on his transactions after understanding the new changes and the new scheme.

Arjuna: Krishna, what are the changes in income tax provisions that will be applicable from 1st June 2016?

Krishna: Arjuna, according to the new changes in income tax law, the major provisions that will be effective from 1st June 2016 are as follows:

  1. The biggest change that will be applicable from 1st June is that of TCS. If the consideration for sale / provision of service is received in cash exceeding Rs. 2 Lakh, then the seller will have to collect 1% T.C.S from the buyer and pay it to the government. Because of this the workload of many taxpayers will increase. This provision has been introduced so as to reduce sales in cash and to curb black money.
  2. 1% T.C.S. will have to be deducted by the seller in case of sale of a car whose value exceeds Rs.10 lakhs.
  3. For the purpose of deduction of T.D.S, the yearly limit for the contractor has been increased from Rs. 75,000/- to Rs.1 lakh.
  4. The yearly limit for deduction of T.D.S in case of insurance commission, commission on brokerage and commission on lottery tickets has been made Rs. 15,000.
  5. Similarly, the rate of deduction of T.D.S for insurance commission, brokerage commission and commission on lottery tickets will be 5%.
  6. If there is no taxable income and income is by way of interest, then TDS was not deducted if Form 15G or Form 15H is furnished. Now this provision is also applicable to assessee having income by way of rent.
  7. The due date for filing T.D.S return has been extended by the government. Earlier, due date for filing of return was 15th of the next month from the end of the each quarter. Now this date has been changed to 31st of the next month from the end of the quarter.
  8. Changes have also been made by the government in the dates of payment of advance tax. Earlier, except for companies, the due date for payment of advance tax was 15th September, 15th December and 15th March for all taxpayers. Now for all the taxpayers it will be in four installments. This means that each taxpayer would have to pay the first installment of advance tax before 15th
  9. The taxpayers who wants to participate in Income Tax Declaration Scheme will have to file the application from 1st June till 30th
  10. The scheme to settle the old disputes in income tax appeal namely, Direct Tax Dispute Resolution Scheme, 2016 will be applicable from 1st June 2016.

 

Arjuna: Krishna, what are the changes applicable from 1st June 2016 in service tax?

Krishna: Arjuna, the changes that will be applicable from 1st June 2016 in service tax are as follows:

  1. Krishi Kalyan Cess of 0.5% is made applicable from 1st June 2016. It means now onwards the rate of service tax will be 15%.
  2. The scheme to settle the old disputes in service tax appeal namely, Indirect Tax Dispute Resolution Scheme, 2016 will be applicable from 1st June 2016.

 

Arjuna: Krishna, what should the taxpayers learn from these changes?

Krishna: Arjuna, the taxpayers should perform transactions within limits of tax laws of the government otherwise they will have to face the consequences. For this, it will be better that the taxpayers understand these changes and do their work accordingly. In mansoon children say “Ye re ye re pausa, tula deto paisa” likewise “Come new / changes in provisions, collect money in the form of taxes, because of collection from taxpayers large amount is collected, government should use it properly and make all happy”

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