CA Umesh Sharma
Krishna (Fictional Character): Arjuna, Holi is the festival of colors. This festival is celebrated in India and also in foreign Countries. All Indians await for the Budget and all the foreigners are looking forward to Investments that can be made in India and also are excited for the changes in Budget with respect to financial and tax matters. On the colorful day of Holi, people sprinkle wet or dry colors on each other and express their joyfullness. The Finance Minister introduces various schemes through budget in different sectors and tries to develop fiscal strength of the country. Sweet Dishes like “Puranpoli”, “Shrikhand” etc. is prepared on the occasion of Holi. Similarly the changes in Budget might either be in the favour of the taxpayer or may not be. But these changes are useful in the long run.
Arjuna: Krishna Every year Holi and Budget comes and makes the taxpayer colorful, theses colors get vanished but they teach something to the taxpayer. So what do these colors tell the Taxpayer regarding the Amendments of Income Tax in Budget? “Pink and Green” colors are mostly used while coloring others. So what are the provisions of Budget correlating to these colors?
Krishna: Arjuna, The Pink and Green colors give us the Joy of Freedom i.e. in terms of Law they give us Concession. Following provisions in the Budget relate to this:
1) The deduction limit for Medical Insurance has increased from Rs. 15,000/- to Rs. 25,000 and for senior citizen it has been increased from Rs. 25,000 to Rs. 30,000/-. One of the important deduction provision is that deduction upto Rs. 30,000 is available if expenditure is made for the health of super senior citizen.
2) In order to have Good health and fitness of all Indian citizen Yoga has been encouraged. That means there institutions conducting Yoga can get Income Tax benefits.
3) If Investment is made according to the “Sukany Samruddhi Scheme” then more Interest can be earned. The Deduction of this Investment can be available u/s 80 C. And the Income earned in this scheme is tax free. Thus is the Pink colour provision for the Girls.
4) The Deduction limit for the diseases specified in section 80 DDB of Income Tax has been made to Rs. 80,000 for Super senior citizen. Earlier for availing deduction application from Govt. a recognised hospital is required but now application from specialist Doctor can also be eligible for availing deduction.
5) The Deductible limit from pension Scheme has been increased from 1 lakh to 1.5 lakh u/s 80 CCC. But the total deductible limit u/s 80C, 80CCC and 80 CCD is 1.5 lakh only.
6) The Deduction limit u/s 80DD and 80U in Income Tax is increased from Rs. 50,000/- to Rs. 75,000/- for disability. And severe disability it is increased from Rs. 1 Lakh to Rs. 1.25 Lakh.
7) 100% deduction is available if Taxpayer has given donation to “Swach Bharat Kosh”, “Clean Ganga Fund”, and “National Fund for Control of Drug Abuse”
Arjuna: Krishna, if “Black” color is correlated with Black Money then what are the provisions?
Krishna: Good correlation between Black color and Black Money. Our Honorable Finance Minister has focused more on the Black Money after the establishment of New Government and has also made provisions in Budget to reduce Black Money. Black money is used more in the transaction of Immovable property. That’s why Government has levied more restrictions on the person making Black Money Transaction. And for this the sec. 269SS and 269T has been amended. Transaction of Immovable Property exceeding Amount of Rs.20, 000 like advances should be done through Account payee Cheque, DD and E Bank Transfer otherwise 100% penalty will be levied. This majorly affects the Builders and Developers. Further one may go to Jail if he has black money in Foreign Banks. A new Black Money restrictive law is going to be implemented. It is expected to increase the use of Banking through the Jan-Dhan-Yojna and should reduce cash Transaction and generation of black money. Thus in this budget usage of Black colour is more to curb black money.
Arjuna: Krishna, Red Color indicates which provision of Budget?
Krishna: Arjuna, Red Color signifies Danger, or Fear or penal. Following are the red Color provisions in Budget .
1) Taxpayer has to deduct TDS for the services of the transporter. In this the TDS is not required to be deducted in case of Transporter filling return of Income u/s 44AE.
2) Government has abolished Wealth Tax Act. But that Taxpayer having income exceeding Rs.1 Crore has been levied with Surcharge of 2% over the Tax. Due to this those taxpayer having wealth but the income is not exceeding Rs.1 Crore will be benefited and those having income exceeding Rs. 1 Crore will suffer.
3) If Amount is withdrawn from a Provident Fund Account for a sum exceeding Rs. 30,000 before the prescribed time limit, then TDS @ 10 % will be deducted on the amount withdrawn.
Arjuna: Krishna, Varnish Color indicates which provision of Budget?
Krishna: Arjuna, Varnish Color is never easily gotten rid of and appears to be very different. Following are the Varnish Color provisions in Budget, which are difficult to follow:
1) If Taxpayer has made Investment through Fixed Deposit in Co-operative Banks then TDS will be deducted if he is receiving interest exceeding Rs. 10,000. Earlier, Investor is made as member so there will be no TDS deduction. But now by this provision in Budget many Banks and Members in small town and villages will suffer with these provisions of Income Tax. If Banks has not made TDS deduction then there will be disallowance of the said Interest Expenditure. That means it will affect to both the Taxpayer and the Bankers.
2) Charitable Institution has not filed his return and form 10 before due date then they will not get deduction u/s 11 and tax has to pay.
Many Amendments has been made in Excise, Customs, and Service Tax. So many colors were used to play but only those colors we have discussed which were used more and has given scope to the discussion of Income Tax provision.
Arjuna: Krishna, What one should learn from the discussion of Holi and Budget?
Krishna: Arjuna, in this Budget, “Pichkari” is of Jetlyji and Colors are of Modiji. People celebrate this festival with joy and forget their worries and anger. Similarly everyone should take the Budget in a Positive sense and should contribute towards self-development and towards the Country’s development. The Budget is full of a variety of Colors. Like in Holi opposite party may cry foul and the ruling party will spray the colors. The Citizens are enjoying the discussion of the Hot Topic of Budget like Haysa Kavi programmes of Holi . It is commonly said that Play carefully with colors likewise plays carefully with the provisions of laws. Someone may feel that he is left out while preparing the budget and also one may feel that he is only punished in the provisions of Budget as it happens while playing Holi. Some feel annoyed by colors whereas some feel colorless. Next Year there will be a rainfall of colors of GST, so in this Budget there is less use of Colors. Have a Joyous Holi and along with it enjoy the vibrant colours of the Budget!
Dear Kaneeti lovers and tax guru lovers, happy holi and your colorful comments are welcomed.