New income tax rules formed: These are the things that you must know

Instead of slashing income tax limit, govt reduced minimum tax rate from 10 per cent to 5 per cent.

PAN card is an important document for filing income tax returns.

Mumbai: The Finance Bill 2017 was approved by Parliament on March 30. Two days after a green signal from the Lower House, President Pranab Mukherjee gave his ‘historical’ assent to the bill thus turning it into a law.

The government tagged along the Finance Bill 2017 some 40 amendments in different acts and passed them under the "cover" of Money Bill' to get a speedy clearance.

The Presidential assent was ‘historical’ as for the first time in India’s budgetary history all provisions related to taxation and government spending Finance Minister Arun Jaitley proposed in Union Budget 2017 have come into effect from April 1.

The Finance Bill 2017 was passed with some sweeping changes to country’s existing tax system. Here are a few things that you must know what you have to do when you file your tax returns and apply for important documents like PAN and Aadhaar cards.

1) Instead of raising income tax limit, the government opted for a reduction in income tax rate. This for the first time in recent years, the minimum valid rate of income tax was reduced from 10 per cent to 5 per cent. There will be only 5 per cent tax on an income from Rs 2.5 lakh to Rs 5 lakh.

2) Aadhaar, a unique identity handed out to all Indians, has been made compulsory for applying for a Permanent Account Number (PAN) card as well as filing for income tax returns.

3) The government has put a limit on cash transactions to prevent occurrence and recurrence of incidents of black money. From now on, a cap of Rs 2 lakh for cash transaction has been brought under amended rules in Finance Bill 2017.

4) Central Board of Direct Taxes (CBDT) has come up with new seven income tax return forms. Besides, the CBDT has further simplified ITR-1 form SAHAJ for individual taxpayers and Hindu Undivided Families.

5) Under the amended rules, Tax Commissioners have been enabled with sweeping powers. After this, they can now search a premises, seize assets and make an arrest also if circumstances require so.