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Report: learn about tax decisions that will impact your pocket

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NewstrackBy Newstrack

Published on 31 May 2016 8:25 PM GMT

Report: learn about tax decisions that will impact your pocket
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New Delhi: Be ready to face the ‘chill wind’ of inflation from Wednesday onwards. Newztrack.com brings you a quick list of what is going to impact your pocket:

Service tax:

Eating out, travel as well as internet becomes costlier with the new ‘Krishi Kalyan Cess’, which was proposed by Finance minister Arun Jaitley in this year's Budget. It is at 0.5 per cent on all taxable services. The new effective service tax will be 15 per cent. Jaitley had increased the Service Tax rate from 12.36 per cent to 14 per cent in his last Budget. This new rate of Service Tax at 14 per cent was applicable from June 1 last. Moreover, from November 15 last, ‘Swachh Bharat Cess’ at 0.5 per cent also got applicable. Therefore, the effective rate of Service Tax is currently at 14.5 per cent with effect from November 15 last.

Purchases of gold jewellery:

In a move that may boost gold jewellery’s demand, the government has rolled back its budget decision to apply one per cent tax collection at source on cash purchase of gold jewellery worth Rs two lakh and above, raising the threshold to the earlier Rs five lakh with effect from June 1. The move is a major relief for wedding jewellery purchasers.

Car upgrades:

Are you planning to upgrade your car? If your car has a price tag of over Rs ten lakh, it would fetch an extra one per cent tax, over and above the car's price, effective June 1. The extra tax will be collected by the car’s seller and will be applicable on the ex-showroom price.

PF withdrawals:

The government has notified raising the threshold limit of Provident Fund (PF) withdrawal. The Finance Act (2016) has amended section 192A of Income Tax Act (1961) to raise the threshold limit of PF withdrawal from Rs 30,000 to Rs 50,000 for Tax Deducted at Source (TDS). The provision will come into effect from June 1, providing relief to Employee’s Provident Fund Organisation (EPFO) subscribers. The proposal was introduced to deduct TDS on PF withdrawals in order to discourage pre-mature withdrawal and to promote long term savings.

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