Union Budget 2019-20 Highlights: Direct & Indirect Tax proposals

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Direct & Indirect Tax proposals in the Union Budget for 2019-20 presented by the Finance Minister, Mrs Nirmala Sitharaman in Lok Sabha today.

Direct Tax proposals:

1. Direct tax revenue has increased by over 78% from INR 6.38 lakh crores in FY 2013-14 to INR 11.37 lakh crores in FY 2018-19
2. Growing at double-digit rates every year
3. Lower corporate tax rate of 25% extended to companies having an annual turnover up to INR 400 crores
4. The lower corporate tax rate will cover 99.30% of all companies registered in India
5. Additional deduction of INR 1.50 lakh for interest paid on the purchase of electric vehicles; this is apart from the proposal under indirect tax to reduce the GST rate on electric vehicles from 12% to 5%
6. Valuation of Funds raised by start-ups will not require any scrutiny by the Income Tax department
7. Period of exemption on capital gains for investment in start-ups extended up to end of March 2021
8. Additional housing loan deduction of INR 1.50 lakhs over the existing INR 2.00 lakhs for interest paid on the purchase of affordable house up to INR 45 lakhs purchased till the end of March 2020
9. Inter-changeability of PAN and Aadhaar by allowing assessees to file Income Tax returns by just quoting Aadhaar number instead of PAN for those who do not have PAN
10. Faceless e-assessment involving no human interface to be launched from this year in a phased manner
11. Central Cell will issue notices electronically without disclosing the details of the assessing officer and this central cell will only be the contact point between the assessee and the assessing officer
12. TDS @ 2% applicable for cash withdrawals over INR 1 Crore in a year from any bank account
13. Business establishments with annual turnover over INR 50 crores to provide digital payment options to customers with no charges for customers or the merchants. RBI and the banks to absorb these costs
14. Surcharge on Individuals having an annual income over INR 2 crores and over INR 5 crores of 3% and 7% respectively

Indirect Tax proposals:

1. Taxpayers having an annual turnover of up to 5 crores will be required to file only quarterly returns
2. Proposal to have only one single monthly or quarterly return
3. Electronic invoicing system to be rolled out by Jan 2020; will eliminate the requirement for e-way bills

Compiled by
CA. Sanjay Thampy
FCA, Grad. CWA, CS, DBM
An avid blogger, Sanjay is based in Mumbai and can be reached at sthampyca@gmail.com.

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