Budget Insights under Modi Version 2.0

Budget-2019 Memorandum
In First budget session under Modi version 2.0, the Union Minister Smt. Nirmala Sitharaman delivered maiden speech today. The key highlights of Union Budget 2019-20 (Only Under Direct Taxes) are as follows:-
  • Tax Rates:-
    • There is no change in Income tax rate slab for Individuals.
    • For Companies having annual turnover up to Rs.400 crores tax rate is reduced to 25%. and for other Companies it is 30%.
    • Earlier it was 25% for Company having total turnover up to Rs 250 crore in financial year 2016-17 and for other Indian Companies 30%. 
    • Surcharge (Additional tax ) increased on individuals having taxable income from Rs. 2 crore to Rs. 5 crore and on above Rs. 5 Crore by 3% & 7% respectively.  

  • Income Tax Returns:-
    • Pre-filled tax returns for faster and more accurate tax returns.
    • Details of several incomes and deductions to be made available in pre-filled forms.
    • This is only for Assesse having income from Salary, Capital Gain and Other Sources.
    • Data to be collected from Banks, Mutual Funds, Stock Exchanges. Stamp Duty Authority etc.
    • This is a Threat to Practicing Chartered Accountants(Small Firms), Advocates, Accountants.
  • Chapter VI A deductions:-
    • Benefit of tax free withdrawal from NPS is increased to 60%, earlier it was 40%.
    • Central Government employees can also now invest in NPS and can avail deduction upto Rs.1,50,000/- under section 80C on fulfillment of certain conditions.
  •  Home Loans:-
    • Deduction up to Rs 3.5 lakhs for interest paid on home loan borrowed up to 31st March 2020 for house value up to Rs.45 Lakh.
    • Earlier Deduction was Rs 2 lakhs.
  • Vehicle Loan:-
    • Deduction of  Rs.1.5 lakhs on interest paid on electric vehicle loans.
  • Robotic Assessment:-
    • Faceless electronic assessment with no human interface to be launched.
    • It will reduce corruption for sure.
  • PAN vs Aadhaar:-
    • Aadhaar can be used wherever PAN is required.
    • It means tax return can be filled using Adhaar Card.
  • Relief from Section 50CA and Section 56:-
    • To reduce genuine hardships of taxpayers appropriate class of persons to be exempt from the anti-abuse provisions of Sec 50CA & Sec 56.
    • Under section 50CA,In case of Unquoted Shares of a company held as capital asset, if sale consideration is less than Fair market value, then such Fair Market Value shall be treated as Full Value of Consideration.
  • Relief for Start Ups:-
    • Capital Gain exemptions from sale of residential house for investment in start-ups extended till Financial Year 2021.
    • Relaxation of conditions for carry forward and set off of losses. 
    • Valuation Scrutiny and identification of investors to be done a new mechanism electronically. Now these do not require scrutiny form Income Tax Department.
    • No assessment by assessing officers without prior approval of the Higher Authority.
  •  NBFCs:-
    • Interest on certain bad & doubtful debts by NBFCs to be taxed in the year in which interest is actually received.
    • Inclusion of NBFCs under section 43B.
    • It is proposed to provide that interest on loans or borrowings from a deposit taking NBFC or a systematically important non-deposit taking NBFC will also be allowed only in the year of actual payment. 

  •   International Financial Services Centre (IFSC)
    • Exemption to interest payment on loan taken from non-residents.
    • Exemption from Corporate Dividend Tax from current & accumulated income to Companies & Mutual funds.
    • 100% profit-linked deduction in any ten year block within a fifteen year period.
  •  STT in case of Option Trading:-
    • Securities Transaction tax restricted to the difference between settlement and strike price.
Credit:- pib.nic.in
 I have discussed only on Amendments in Direct Taxes 
!! I hope it was helpful !!

For further information contact at info@commerceinsiders.com
!! Thank You  !!


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