President Pranab Mukherjee has given his assent to the Finance Bill, 2017 to give effect to provisions like a bar on cash transactions above Rs 2 lakh and compulsory quoting of Aadhaar for filing tax returns.
The President was kind enough to give his assent to the Finance Bill before he left for official visit to Assam yesterday (Sunday).Hasmukh Adhia, Revenue Secretary
With this, the provisions of the Finance Bill come into effect from Saturday, he said.
This is the first time ever that the annual Budget, together with taxation proposals, have come into effect from the first day of the financial year.
Breaking From Tradition
Scrapping a colonial-era tradition of presenting the Budget at the end of February, Finance Minister Arun Jaitley had for the first time in the history of independent India presented the annual accounts on 1 February.
The legislative process of getting approvals for demands for grants or spending, the General Budget as well as taxation proposals contained in the Finance Bill, 2017 were all completed by 30 March. The President's assent was taken the very next day.
This will give the government more time to implement welfare spending programmes and taxation plans.
Previously, when the Budget was presented at the end of February, the three-stage Parliament approval process used to get completed some time in mid-May, weeks ahead of the onset of monsoon rains. This meant government departments would start spending only from August-end or September after the monsoon ended.
Besides advancing the presentation date, the Budget scrapped the plan and non-plan distinction and merged the Railway budget with it, ending a nearly century-long practice.
Advancement of the Budget to Fetch More Results
Advancement of the Budget will give government departments more leeway to spend as well as allow companies time to adapt to business and taxation plans.
Adhia said all taxation and other proposals in the Finance Bill, 2017 have come into effect from 1 April.
Among the most important is limiting cash transaction to Rs 2 lakh, at par with the current requirement of quoting the permanent account number (PAN) for cash transactions.
The penalty for violating this is a fine equivalent to the amount of the transaction, he said. The fine will be payable by the person or the establishment receiving the cash.
Aadhaar Now a Must While Applying for PAN
Also, the Aadhaar number is now a must while applying for PAN as well as filing of tax returns.
The Finance Bill also provides that a person holding PAN as on 1 July 2017 has to inform his Aadhaar number to the authorities in a manner which will be notified by the government.
It also amends the Companies Act of 2013 to make donations by companies to electoral trusts only through account payee cheques, bank drafts or electronic transfer.
The language has also been tweaked to provide for every company disclosing in its profit and loss account the total amount contributed to such trusts.
The move is in sync with Jaitley's Budget proposal of introducing bearer electoral bonds, which could be purchased by a donor using cheques from a scheduled bank and encashed only through a notified bank account of a political party within the limited duration of such instrument.
Rules for Electoral Bonds to Be Notified Soon
Adhia said rules for electoral bonds will be notified within this month.
The President's assent to the Finance Bill also means that as many as seven appellate tribunals will now be dissolved and their work taken over by other existing ones.
The tribunals scrapped include the Competition Appellate Tribunal, whose functions will be taken by the National Company Law Appellate Tribunal (NCLAT).
The Airports Economic Regulatory Authority Appellate Tribunal and the Cyber Appellate Tribunal will be replaced and their functions would be taken over by the Telecom Disputes Settlement and Appellate Tribunal (TDSAT).
Copyright Board to Be Dissolved
Also, the Copyright Board will be dissolved and its functions will go to the Intellectual Property Appellate Board.
The National Highways Tribunal will be replaced and its functions will be taken over by the Airport Appellate Tribunal while the job of the Employees Provident Fund Appellate Tribunal will be handled by the Industrial Tribunal.
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