Income Tax reduced tax rate option on individual or HUF who has business income once opted, have to apply to all subsequent years. It means it cannot go back and choose old rate with all deductions etc. (Applicable from FY 2020‐21)

In Sep 2019, government announced reduced corporate tax rate to 15% or 22% and were also eligible to take all deductions like donations to political parties, trust etc. (except chapter C ‐ Deductions) are now not allowed to take any such benefit in this budget and this is applicable from (FY 2019‐20 only.) U‐turn of Government with retrospective change.

If any person sale property lesser than stamp duty value and difference between transaction value and stamp duty value is greater than 5% were liable to income. This 5% difference has been increased to 10%, hence now transaction value can maximum differ up to 10% of stamp duty value and difference will not be liable for tax. (Applicable from FY 2020‐21)

TDS rate for Technical services only has been reduced to 2% from 10% under Section 194J. Please note there is no change in TDS rate for “professional services” (Applicable from FY 2020‐21)

E‐commerce companies will now deduct 1% TDS on Sales Value. Hence, on one side E‐commerce companies will deduct 1% TDS as Income Tax and on another side 1% TCS as per GST Law, total now funds blocked for suppliers supplying through E‐commerce operator is 2% (1% for Income tax and 1% for GST) (Applicable from FY 2020‐21)

Banks / Authorised dealer will now collect 5% TCS from person who are transferring money outside India more than Rs.7 Lakhs per year under Liberalised remittance scheme (LRS) (Applicable from FY 2020‐21) Please note that TCS will be reflected in 26AS

Tour operator will now collect 5% TCS from tourist who are going outside India. (Applicable from FY 2020‐21).

Please note that TCS will be reflected in 26AS, hence before making cash payment, think twice.

Seller will need to collect 0.1% TCS on sale of goods to any buyer exceeding Rs.50 Lakhs per year (Applicable from FY 2020‐21).

Indian Citizens residing outside India and not paying any tax in that foreign country will be deemed consider as “Resident” instead of earlier “Non‐resident”. Hence now they will need to pay Income tax in India on their Global Income. (Applicable from FY 2020‐21).

Dividend income will be included now in your total income which was earlier exempt in the hands of investor till Rs.10 lakhs per year. Further, TDS will be deducted by company @10% in excess of Rs.5,000. Moreover Maximum 20% interest expense can be claimed against this dividend income. (Applicable from FY 2020‐ 21 except TDS Clause which is applicable from 02nd Feb, 2020).

If any person sold any property which he/she has acquired before 01st April, 2001 were given option to choose “Fair Market Value” as on 01st April, 2001 or “Actual Cost” as Deduction from sales value. However now Fair Market Value has been removed and “Stamp duty value” to be consider as on 01st April, 2001. Hence, now no people will take Valuation report for fair market value consideration. Further, Capital Gain will also be substantially increased for such sales as fair market value and stamp duty value would have big difference. (Applicable from FY 2020‐21).

Tax Audit limit increased upto 5 Crores subject to 5% cap on Cash Sales and Cash Payment is applicable from FY 2019‐20 only. Further, Tax audit due date is 30th September and Income Tax return due date is 31st October

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Qualification: CA in Practice
Company: Owner - P Mehta & Jain
Location: Ahmedabad, Gujarat, IN
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January 2021