Page 50 - Banking Finance MAY 2017

FEATURES

10 THINGS THAT WILL

CHANGE IN FY 18

Consumer: Some Gain, Fly cheap: The regional connectivity will rise by 75 basis points, or bps, if
scheme will operate on 128 routes and they lend further to any company with
Some Pain connect 70 airports. Airlines will cap debt of over Rs 25,000 crore.

Single-page ITR-1, Aadhaar compul- fares at Rs 2,500 for a one-hour flight.
sory: A simple income tax return-1, or This number will go down to Rs 15,000
ITR-1, form for the salaried has been in- Industry: Compliance, crore in FY19 and Rs 10,000 crore in
troduced for taxpayers with income of Consolidation & Parity FY20.
Rs 50 lakh and one property. For other
categories, the number of forms has SBI merger: State Bank of India's (SBI) Capital gains tax on non-STT transac-
been reduced from eight to six. Also, merger with five associate banks takes tions: Capital gains tax will be appli-
mentioning Aadhaar number has be- effect today. The merger makes SBI the cable on sale of shares acquired with-
come mandatory in all forms. world's 45th biggest bank, with Rs 33.5 out paying securities transaction tax
lakh crore worth of assets, a branch (STT). The new rule will apply to all non-
Small savings rates cut by 10 basis base of 24,000 branches and 59,000 STT paid transactions since October 1,
2004. However, certain cases, like
points: 7.9 per cent rate for Public automated teller machines.
shares acquired in an initial public of-
Provident Fund and five-year National
BS-IV: The Bharat Stage-IV, or BS-IV, fering or through rights or bonus issue
Savings Certificates; 7.6 per cent for
emission standards come into effect or employees stock options, would be
Kisan Vikas Patra; 8.4 per cent for
today. While two-wheelers and exempt from these provisions.
Sukanya Samriddhi Yojana and Senior
carmakers are passing on the costs,
Citizens Savings Scheme; 7.2 per cent GAAR: General Anti-Avoidance Rule, or
commercial vehicle makers, who are
for five-year recurring deposits and 6.9- GAAR, aims to provide clarity and cer-
struggling with weak demand, will be
7.7 per cent for one to five-year term tainty over taxation of foreign inves-
deposits. Small savings rates still re- the worst-affected, as discount levels tors. These rules will impact entities
are already at elevated levels.
main more attractive than bank deposit which domicile themselves in a tax-
rates. Corporate tax: Medium and small-scale friendly jurisdiction like Mauritius,
companies to see their tax burden go Singapore and other places to avoid
Income tax changes: Those earning down by five percentage points. taxes. From now on, to avail of tax
between Rs 2.5 lakh and Rs 5 lakh a benefits, an entity will have to convince
year will have to pay income tax at the Loans get dearer for highly indebted the Indian tax authorities that they are
rate of five per cent instead of the ear- companies: From FY18, banks will have running a permanent establishment in
lier 10 per cent; those above Rs 50 lakh to set aside three per cent more as these countries and not using it as tax
will pay 10 per cent surcharge. additional provisioning and risk weight haven. (Source : Business Standard)

50 | 2017 | MAY | BANKING FINANCE

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