FINANCE ACT 2019- AMENDMENTS
(Applicable for AY 2020-21 i.e FY 2019-20)
Some important amendments made by Finance Act 2019 to be noted while filing returns for AY 2020-21
1. Rebate under Section 87A:
The rebate is available to a resident individual if his total income does not exceed Rs. 5,00,000. The amount of rebate shall be 100% of income-tax or Rs. 12,500, whichever is less. (i.e no tax for resident individual whose total income does not exceed Rs. 5,00,000/-)
|Nature of Income||Range of Total Income|
|Up to Rs. 50 lakh||More than Rs. 50 lakh but up to Rs. 1 crore||More than Rs. 1 crore but up to Rs. 2 crore||More than Rs. 2 crore but up to Rs. 5 crore||More than Rs. 5 crore|
|Short-term capital gain covered under Section 111A||Nil||10%||15%||15%||15%|
|Long-term capital gain covered under Section 112A||Nil||10%||15%||15%||15%|
|Any other income*||Nil||10%||15%||25%||37%|
Surcharge is levied on the amount of income-tax at following rates if the total income of an individual, HUF, Artificial judicial person assessee exceeds specified limits:
3. Domestic Company
Income-tax rates applicable in case of domestic companies for Assessment Year 2020-21 are as follows:
|Particulars||Income Tax Rates|
|Where its total turnover or gross receipt during the previous year 2017-18 does not exceed Rs. 400 crore||25%|
|Where it opted for Section 115BA||25%|
|Where it opted for Section 115BAA||22%|
|Where it opted for Section 115BAB||15%|
|Any other domestic company||30%|
4. Standard Deduction from Salary:
This limit has been increased to Rs. 50,000 from FY 2019-20.
|Block of Assets||%|
|Motor Cars, other than those used in a business of running them on hire, acquired on or after the 23rd day of August, 2019 but before the 1st day of April, 2020 & is put to use before the 1st day of April,2020||30%|
|Motor buses, motor lorries and motor taxis used in a business of running them on hire, acquired on or after the 23rd day of August, 2019 but before the 1st day of April, 2020 & is put to use before the 1st day of April,2020||45%|
The limit for tax deduction has been increased to Rs. 40,000/- (Rs. 50,000/- in case of senior citizens) where the payer is: –
1. Banking company or any bank or a banking institution
2. Co-operative society engaged in the business of banking
3. Post office (on deposit under scheme framed and notified by Central Government).
TDS deduction at 5% on the income component and not the gross maturity value.
(Under section 10 (10D), maturity proceeds received under a life insurance policy are exempt from tax. However, the benefit is not extended to policies where the annual premium exceeds 10% (20% in case of policies sold prior to April 2012) of the sum assured.)
The limit has been raised to Rs. 2,40,000/- for FY 2019-20 & onwards.
Section 194N is made applicable from September 1, 2019. Hence, every bank or post office is required to deduct TDS on cash withdrawal made on or after September 1, 2019. The tax shall be required to be deducted only when the aggregate amount of cash withdrawn by a person during the previous year, from one or more of his bank or post office account, exceeds Rs. 1 Crore.
It applies to those individual/ HUF who are not required to get their books audited u/s 44AB and when the total amount paid to a resident individual, for carrying out any contractual work or providing any professional service, in a financial year exceeds Rs 50,00,000.
(If they are required to get Books of Accounts audited, TDS deduction is applicable as per Section 194C and 194J. The individual and/or HUF who have to deduct TDS under Section 194C (TDS on payment to a contractor) and 194J (TDS on payment on professional fees) do not have to deduct tax at source under Section 194M.)
7. Tax rate u/s 115JB (Minimum Alternate Tax) has been reduced from 18.5% to 15%.
8. Sec 54
Sec 54 (exemption from LTCG) has been extended for investment made, by way of purchase or construction, in two residential houses provided the amount of capital gains does not exceed Rs 2 crore. If the assessee exercises this option, he shall not be subsequently entitled to exercise the option for the same or any other assessment year, i.e., the assessee can exercise this option only once in a lifetime.
9. NAV of self- occupied property:
In scenario before Finance Act, 2019, if one had more than one property for self-occupation, then only one of those (as chosen by us), would be considered as self-occupied property for taxation purposes. The other self-occupied house property/properties would be considered as deemed to be let-out and the notional rent needs to be offered to tax. Now, the second house is to be treated as self-occupied and thereby has removed the necessity of paying tax on notional rent.
The interest deduction is limited to Rs 2 lakh for both the self-occupied house property in aggregate.
10. Sec 269SU:
Section 269SU requires every person who is carrying on business to provide the facility for accepting payments through prescribed electronic modes. These prescribed modes will be in addition to the facility for any other electronic mode of payment already provided to customers by such person.
Section 269SU is applicable to a person when the total sales, turnover or gross receipts from business exceeds Rs 50 crore during the immediately preceding previous year.
The Central Board of Direct Taxes (CBDT) has notified the prescribed modes of payment for the purpose of section 269SU:
11. Sec 46A of Income Tax Act has been deleted (buy-back by listed co.) & sec 115QA has been made applicable to all the companies.
12. Sec 139(1): Compulsory filing of return
Existing provision specify the filling of return if total income of the assessee being individual, HUF, AOP, BIO, AJP before claiming the deduction u/s 10(38), 10A, 10B, 10BA, exceeds the 2,50,000/-.
Now in the above list section 54, 54B, 54D, 54EC, 54F, 54G, 54GA and 54GB has been inserted. Meaning thereby, even if Total income is less than the 2,50,000/- after claiming the benefit of the above provision the assessee has to file return.
Also, the following proviso has been inserted to enable mandatory filling of ITR by the assessee specified below: