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Budget 2019: A brief Summary

Our learned Finance Minister presented her maiden budget on 05/07/2019 .In this post we will try to analyse some of the salient features of the same that are relevant for Income tax  are as follows:

Exemption Limit:

The limit proposed in the interim budget 2019 has been kept unchanged thereby there will be no tax upto Rs 500000.00

Increase in tax rates for Super Rich:

Income in the slab 2Cr to 5 Cr rate increased by 3%

Income greater than 5 Cr rate increased by 7%

Tax rates on companies @ 25% now for all companies with annual turnover upto 400 Cr

Prefilled Tax Returns:

Pre-filled tax returns will be made available to taxpayers which will contain details of salary income, capital gains from securities, bank interests, and dividends etc. and tax deductions

Additional deductions on Interest on Home loans: Sec 80EEA

An additional deduction of up to Rs. 1.5 lakh against interest paid on loans borrowed till March 31, 2020 to buy houses worth up to Rs.45 lakh.

Conditions:

Loan has been taken between 01/04/2019 to 31/03/2020

The assessee do not own any other residential house property

The stamp duty value of the property do not exceed 45.00 Lacs

Maximum Deduction: Rs 150000.00

Tax Free withdrawl from NPS increased:

The limit for withdrawl from NPS has been increased to 60% from existing 40%

Deduction for Electric Vehicle Loan:Sec 80 EEB

An additional income tax deduction of Rs. 1.5 lakh on interest paid on loans taken to purchase EVs

Conditions:

Loan has been taken between 01/04/2019 to 31/03/2023

Maximum Deduction: Rs 150000.00

Relief to Start ups:

The start-ups and their investors who file requisite declarations and provide information in their returns will not be subjected to any kind of scrutiny in respect of  valuations of share premiums

Mandatory conditions added for filing of returns: Sec 139

If a person has deposited amount greater than 1 Cr in current account

If any person incurred expenditure on himself or any other person on foreign travel greater than 2 Lakh

If any person incurred expenditure on electricity greater than 1 Lakh

Substitution of AAdhar in case of non availability of PAN: Sec 139A

Now if a person has no PAN then he can provide AAdhar in place of PAN to file return

Amendments in TDS provisions:

Insertion of new section 194M

Currently Individuals and HUF are not required to deduct TDS on payments made to contractors, professionals etc u/s 194C to 194J if the payment is for personal use and if not under Audit.To plug this loophole a new section has been proposed wef sep 2019 wherein they are required to deduct TDS on payments @ 5% if payments exceeds 50.00 lacs in a year.

TDS on property:

Now consideration will include all charges eg car parking, club charges etc by whatever name called.

SABKA VISHWAS (LEGACY DISPUTE RESOLUTION) SCHEME, 2019:

Apart from Income tax one feature worth mentioning is the launch of new scheme for ending long standing disputes in the field of service tax ,central excise and customs cases all in all to (xxvi) acts

Features:

The cut-off date is 30/06/2019

 tax dues are relatable to a show cause notice or one or more appeals arising out of such notice  and if the amount of duty (hereinafter called D) is,

(i) D<50.00 lacs , then, seventy per cent. of the tax dues;
(ii) D>50.00 lacs, then, fifty per cent. of the tax dues

where the tax dues are relatable to a show cause notice for late fee or penalty only, and the amount of duty in the said notice has been paid or is nil, then, the entire amount of late fee or penalty;
 

where the tax dues are relatable to an amount in arrears and,—

(i) D<50.00 lacs, then, sixty per cent. of the tax dues;

(ii) Da>50.00 lacs, then, forty per cent. of the tax dues;

(iii) in a return under the indirect tax enactment, wherein the declarant has indicated an amount of duty as payable but not paid it and the duty amount indicated is,—

(A) D<50.00 lacs, then, sixty per cent. of the tax dues;
(B) D>50.00 lacs, then, forty per cent. of the tax dues;

(d) where the tax dues are linked to an enquiry, investigation or audit against the declarant and the amount quantified on or before the 30th day of June, 2019 is—

(i) D<50.00 lacs, then, seventy per cent. of the tax dues;

(ii) D>50.00 lacs, then, fifty per cent. of the tax dues;

(e) where the tax dues are payable on account of a voluntary disclosure by the declarant, then, no relief shall be available with respect to tax dues.

(2) The relief calculated under sub-section (1) shall be subject to the condition that any amount paid as predeposit at any stage of appellate proceedings under the indirect tax enactment or as deposit during enquiry, investigation or audit, shall be deducted when issuing the statement indicating the amount payable by the declarant:

Provided that if the amount of predeposit or deposit already paid by the declarant exceeds the amount payable by the declarant, as indicated in the statement issued by the designated committee, the declarant shall not be entitled to any refund.

Who can file declaration:

All persons shall be eligible to make a declaration under this Scheme except the following, namely:—

(a) who have filed an appeal before the appellate forum and such appeal has been heard finally on or before the 30th day of June, 2019;

(b) who have been convicted for any offence punishable under any provision of the indirect tax enactment for the matter for which he intends to file a declaration;

(c) who have been issued a show cause notice, under indirect tax enactment and the final hearing has taken place on or before the 30th day of June, 2019;

(d) who have been issued a show cause notice under indirect tax enactment for an erroneous refund or refund;

(e) who have been subjected to an enquiry or investigation or audit and the amount of duty involved in the said enquiry or investigation or audit has not been quantified on or before the 30th day of June, 2019;

(f) a person making a voluntary disclosure,—

(i) after being subjected to any enquiry or investigation or audit; or

(ii) having filed a return under the indirect tax enactment, wherein he has indicated an amount of duty as payable, but has not paid it;

who have filed an application in the Settlement Commission for settlement of a case;
(h) persons seeking to make declarations with respect to excisable goods set forth in the Fourth Schedule to the Central Excise Act, 1944;
We have explained only relevant changes though many other changes are proposed.Further all these changes are as of now proposed and will be obviously subject to passage of bill by both houses.
In case of any clarification do please mail us at info@a2zefilingservices.com

 

 

 

 

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