Tax on Agriculture Income Part of Niti’s Action Plan

Threshold for taxing agriculture income should be same as urban income, says Bibek Debroy

Agricultural income should be taxed at the same threshold as personal income, Niti Aayog, the government’s thinktank, has proposed in its draft three-year action plan.

Farm income could be assessed for tax as a three-year average, Niti Aayog member Bibek Debroy said at a press briefing on Tuesday, making a case for widening the taxpayer base.

“There should be no distinction between urban and rural. The threshold for taxing rural agriculture income should be the same as urban income. However, rural agriculture income taxed could be an average of three years as it is subject to weather fluctuations,“ Debroy said, explaining the Aayog’s proposal to expand the country’s tax base.

Continue reading “Tax on Agriculture Income Part of Niti’s Action Plan”

Life Insurance Premium – Tax Benefits on Payment and Maturity

Life insurance is the mostly used tool for getting deduction under section 80C. Tax benefits, no risk and insurance benefits make it an all time favorite investment for the general public. The payment of life insurance premium is allowed as deduction under section 80C and also the bonus and maturity benefits are exempt from tax under section 10(10D).

Deduction under section 80C

In case of an individual – Policy should be taken on own life, or life of spouse or any child (Dependent or Independent, married or unmarried). Premium Paid on life of parents, Brother, Sisters or In-laws are not eligible.

In case of HUF – Policy should be taken on life of any member of such HUF

Deduction is allowed only when the premium is actually paid in the year. Continue reading “Life Insurance Premium – Tax Benefits on Payment and Maturity”

Key changes in new ITR forms for AY 2017-18

The CBDT has notified new income-tax return forms (ITR forms) for the assessment year 2017-18. It has prescribed simplified version of ITR-1 with fewer columns. A new column has been inserted in ITR Forms to report cash deposits in banks above 2 lakhs during the demonetisation period, i.e., from November 9, 2016 to December 30, 2016.

CBDT had prescribed new ‘Form ITR 4 Sugam’ for taxpayers opting for presumptive taxation scheme. A new column has been prescribed to mention digital receipts as the rate of presumptive income is 6% for such receipts. Continue reading “Key changes in new ITR forms for AY 2017-18”