First, The Interim Union Budget for the year 2019 was presented by acting Finance Minister Piyush Goyal on 1 February 2019. Whereas full Union Budget 2019 was presented by Finance Minister, Nirmala Sitharaman on 5 July 2019. On 25 November,2019, the Taxation Laws (Amendment) Bill, 2019 (Bill) was introduced in the Lok Sabha .The Union Budget 2020 was presented by the Finance Minister, Nirmala Sitharaman on 1 February 2020, as her second budget. All these announcements resulted into some drastic changes in Income tax.
Here is my humble attempt to summarise it in tabular format for your benefit. This will take you to a quick tour to learn about recent changes & its applicability. I have noted down 20 MOST important changes topic wise in just two pages that you must take a look.
Before that, you may refer to changes in FY 17-18 & 18-19 that made applicable which you must have been aware .Here is link. https://taxguru.in/income-tax/20-income-tax-applicable-01042018-01042019.html. Also you must refer (My most viewed article on taxguru) to the article regarding Personal income tax & deduction applicable for FY 2019-20 ITR explained in simpler & summarised format. Here is link https://taxguru.in/income-tax/summary-slab-deductions-income-tax-ay-2020-21.html
So, let’s take a look to 20 RECENT Amendments that has changed Income Tax in a big way. Majorly applicable from AY 21-22 & SOME APPLCIABLE FROM AY 20-21. Some changes are so drastic steps that this will change the Income tax completely like option for New vs. old in personal taxation and same way new rates for Corporate.
Item in red refers to changes applicable for AY 20-21 .
Item in Green refers to changes applicable for AY 21-22
|Business & Profession||
Motor cars acquired on or after 23rd August 2019 but before 31st March 2020 is now depreciated at 30% and the enhanced rate of Depreciation is 30% for use of car other than hiring business only and for hiring business it is @ 45%
Only for AY 2020-21
|2||Tax Audit||Relaxation from Tax Audit upto 5 cr TO for those having TOTAL CASH EXPOSURE less than 5% of TOTAL receipts & payments .||FROM AY 2020-21|
|3||Tax Audit||Date of filling of audited return -31-10
incl partners of firms having Tax Audit. And TAR upload by 30-9 (for AY 20-21 , the date of uploading TAR is 31-10-2020 & date of filling of TAR ITR is 30-11-2020)
|FROM AY 2020-21|
|4||House Property||A person can claim two properties as self-occupied house properties subject to certain conditions. SO… its Annual value is NIL.
So Interest under section 24(b) to remain 2 lac max. . Even if you claim 2 houses as Self Occupied.
|FROM AY 2020-21|
|5||Capital gain||BIG CHANGE – For indexation of property value, Stamp Duty Value of 01-04-2001 is to be considered. not FMV as on 01-04-2001||from AY 2021-22|
|6||Capital Gain||Section 50C – now 10% Variation allowed for Stamp Duty Value And Sale price. Earlier it was 5%||from AY 2021-22|
|7||Capital Gain||Section 54 – Assessee may buy 2 houses (earlier one) When LTCG below 2 cr to save Tax on LTCG of House sold. This option available only once in a lifetime.||From AY 2020-21|
|8||Other Source||BIG CHANGE – Dividend to be Taxable in hands of Shareholders ( earlier exempt)||From AY 2021-22|
|9||TDS / TCS||TDS over 5000 at 10% by company for the payment of Dividend||From 01-04-2020|
|10||Other Source||56(2)(X) Where any person receives any immovable property for inadequate consideration, the stamp duty value of such property as exceeds such consideration, if difference is more than the higher of the following amounts:
(i) the amount of fifty thousand rupees; and
(ii) the amount equal to 10% of the consideration (earlier 5%)
The excess differential amount will be taxable in the hands of receiver.
|From AY 2021-22|
|11||Personal Taxation||Rebate 12500 if Total Income Upto Rs. 5 lac||from AY 2020-21|
|12||Personal Taxation||BIG CHANGE – by introducing 115BAC
Section 115BAC –
Other than B&P income, Each year option for new rate.
5 10 15 20 30 without claiming Deductions exemption. for diff slabs
For B&P income , once chosen new rate option then Lifetime , he must continue with new rates unless until he doesn’t have B&P income .
|From AY 2021-22|
|13||Salary||NPS+SAF+ PF anything in excess of 7.5 lac contributed by Employer will be taxable as perquisites in hands of employee||From AY 2021-22|
|14||Salary||Salary Standard deduction Rs 50000 (Earlier Rs 40000)||From AY 2020-21|
|15||TDS / TCS||BIG CHANGE – TDS+TCS applicability for those who are crossing 1cr TO or 50lac receipts. (Earlier it was Audit wise).||from 01-04-2020|
|16||TDS / TCS||TDS on cash withdrawal under Section 194N-
The payer will have to deduct TDS at the rate of 2% on the cash payments/withdrawals of more than Rs 1 crore in a financial year under Section 194N.
In case the individidual receiving the money has not filed income tax return for three years immediately preceding the year, then the TDS is 2% on the cash payments/withdrawals of more than Rs 20 lakh and up to Rs 1 crore, and 5% for withdrawal exceeding Rs 1 crore.
|17||TDS / TCS||BIG CHANGE – TCS @0.1% on SALE over 50 lac
seller should collect TCS from buyer of total amt from sale in a year crossed 50 lac
Applicable to seller whose Turnover more than 10 crore
|18||Return Filing||Mandatory Return filling for cash withdrawal, Foreign travel exp, Electric bill consumption over certain limit… irrespective of their Total income being less/more than 2.5 lac||AY 2020-21|
|19||Corporate Taxation||BIG CHANGE. New regime for CORPORATE TAX. 115BAB and 115BAA
The corporate tax rates to 22% for existing domestic companies and 15% for new domestic manufacturing companies.
Co. cannot carry forward and set off their unutilised MAT credit. Deductions/Exemptions not available to Companies Opts for 115BAA or 115BAB.
|20||Corporate Taxation||BIG CHANGE – MAT at 15% (EARLIER 18.5%)||AY 2020-21|
All TDS rates have been slashed by 25% such as TDS on dividend is 7.50% instead of 10% for A Yr 20-21. This cut rate by 25% applicable only for the period 14-5-2020 to 31-03-2021 on non-salaried classes of taxpayer.
NOTE – I have taken utmost care in writing these 20 amendments. If anything important left, please feel free to contact me. ANY ERROR / MISTAKE / OMMISION, Please contact me on 9879831157 or on my email [email protected] to help me to rectify in it. Any constructive suggestion is welcome.