The new financial year has just begun, and there has been a lot of changes in tax laws. So, in the article, we aim to discuss few changes, relevant to most of the taxpayers.
We are covering the changes made in Income tax Act and GST.
A. Changes in Income tax Act
1. Rebate u/s 87 A
The tax rebate available under Section 87A has been increased from Rs. 2,500 to Rs. 12,500. However, it would only be available to a resident individual whose total income does not exceed Rs. 5 lakhs.
2. Standard deduction from salary
The standard deduction of Rs 50,000 for the salaried taxpayer was made available. This deduction would be in lieu of the transport allowance & medical reimbursement.
3. No tax on the notional rent on the second self-occupied house
From F.Y. 2019-20, an assessee can claim annual value as nil in respect of two-self occupied house properties. However, there is no change in aggregate limit for deduction in respect of interest on housing loan.
4. Section 54 relief extended to 2 residential houses
Sec 54 exempted the long-term capital gains from the sale of residential house property, to the extent such capital gains were invested in another residential house property. Earlier, the taxpayer was allowed to invest only in one residential house to claim exemption under this section.
From financial Year 2019-20, an assessee could claim exemption under section 54 even if he invests in two residential houses, provided the amount of the capital gain does not exceed two crore rupees. Further, an assessee can exercise this option only once in a lifetime.
5. TDS on interest income
The threshold limit for TDS u/s 194A- on interest income other than interest on securities like interest on Fixed Deposits etc. has been increased from Rs. 10,000 to Rs. 40,000.
6. TDS on rental income
The threshold limit for TDS u/s 194-I on rental income has been increased from Rs. 1,80,000 to Rs. 2,40,000.
7. Increased cess on Income tax
Cess on income tax has been increased from 3% to 4% on the tax payable by all categories of taxpayers.
B. Goods & Service tax Act
1. Due date of GSTR-9
The last date to file annual return in form GSTR-9 and form GSTR-9A, for the financial year 2017-18 has been extended to 30th June 2019. The forms are now available at the portal. It is also to be noted that these forms once filed, cannot be revised.
2. Composition scheme for supplier of services & mixed suppliers
A composition scheme for supplier of services having an annual turnover up to Rs 50 lakhs in the preceding year has been introduced w.e.f. 01.04.2019. The rate of tax will be 6%. The benefit of this scheme shall not be available to service providers who are rendering services in multiple States or through e-commerce websites or suppliers engaged in non-GST supply.
The CBIC has notified that when a supplier opts for this scheme, the unutilized balance of input tax credit available in the electronic credit ledger of such taxable person shall lapse.
3. Increase in threshold limit for composition scheme
The existing threshold limit on gross turnover in previous financial year to avail of the composition scheme has been increased from Rs. 1 crore to Rs. 1. 5 crores. In respect of special category States (North-Eastern States), the threshold limit has been increased from Rs. 50 lakhs to Rs. 75 lakhs.
4. Increase in threshold exemption for registration
This threshold limit has been increased to Rs. 40 lakhs only if supplier is engaged in supply of goods. In other words, any person who is engaged in supply of goods and his total turnover in the current financial year does not exceed Rs. 40 lakhs, he is not required to take registration under GST.
Note: This is subject to state government opting for the higher threshold.
5. Last chance to avail Input Tax Credit relating to F.Y. 2017-18
The registered person can avail input tax credit of GST paid from July, 2017 to March, 2018, latest by the due date of furnishing the return for the month of March, 2019 i.e. by April 20, 2019.
6. Availing benefit of reduced GST Rates by real estate developers or builders
The GST Council in its 33rd and 34th meeting had recommended the GST rate of 1% in case of affordable houses and 5% in other cases, without input tax credit. The promoters shall be given an one -time option to continue to pay tax at the old rates (i.e., at 8% or 12% with ITC) on ongoing projects (if construction and actual booking have started before 01-04-2019) which have not been completed by March 31, 2019.The option shall be exercised once within a prescribed time frame and where the option is not exercised within the prescribed time limit, new rates shall apply.
7. Transfer of credit in case of change in ownership
Where there is a change in constitution of a business, whether through sale, merger, demerger, amalgamation, lease or transfer of business, the unutilized ITC can be transferred to the successor. The input tax credit shall be apportioned in the ratio of the value of assets. However, the value of assets would mean the value of the entire assets of the business, notwithstanding the ITC has been availed thereon or not.
8. Changes in E-way bill
a. Auto calculation of route distance based on PIN code for generation of EWB
E-waybill system is being enabled to auto calculate the route distance based on the source & destination Pin-codes. Though the user is allowed to enter the actual distance as per his movement of goods. However, it will be limited to 10% more than the displayed distance for entry.
b. Blocking of generation of multiple E-Way Bills on one Invoice/document
Now, only one E-way bill can be generated on one invoice/document. That is, once E-way Bill is generated with an invoice number, then none of the parties – consignor, consignee or transporter – can generate the E-Way Bill with the same invoice number.
c. Extension of E-Way Bill in case Consignment is in Transit
In case on consignment in Transit, an e-way bill can be extended. During the extension of the e-way bill, the user is prompted to answer whether the Consignment is in Transit or in Movement. On selection of In Transit, the address details of the transit place need to be provided. On selection of In Movement the system will prompt the user to enter the Place and Vehicle details from where the extension is required.
The author is a CA in practice at Delhi and can be contacted at: E-mail: abhinandansethia90@gmail.com, Mobile: +91-9811741451)
Disclaimer: The above article is only for the purpose of academic discussion and should not be construed as any legal opinion in any matter whatsoever.
Author Bio
will tds on gst is applicable when the bill date of month mar 2019 and paid in apr 2019
Is any income received as monthly salary u/s 194J, while working as a Consultant on a fixed term basis on temporary basis, is computed under GST? Recently FM said such receivables will not be computed. Plz. guide.
useful information
Is composition scheme for supply of services available for Room Accommodation Service?