First full-time woman Finance Minister Nirmala Sitharaman presented her maiden Union Budget of Modi 2.0 Government on Friday 05/07/2019.

Following are the taxation related key takeaways from Union Budget 2019-

Part A: Indirect Tax

  • A simplified single monthly return for taxpayers with an annual turnover of less than Rs 5 crore to file only quarterly returns;
  • Fully automated GST Refund Module is proposed to be implemented;
  • Multiple tax ledgers to be replaced by one single ledger;
  • E-invoicing proposed to be implemented in year 2020;
  • Legacy Dispute Resolution scheme proposed for quick closure of Pre-GST regime litigation;
  • Basic Custom Duty on certain items to be increased to promote the cherished goal of Make in India;
  • Import of Defence equipment not manufactured in India are proposed to be exempted from  Basic Custom Duty;
  • Custom duty on Gold and Other precious metals increased from erstwhile 10% to 12.5%;
  • Increase in Special Additional Excise duty and Road and infrastructure cess each by 1 rupee a litre on petrol and diesel;
  • Nominal excise duty is proposed to be imposed on tobacco products and crude;
  • Provision of penalty and prosecutions to be enhanced under Customs Act for misuse of Export benefits;

Part B: Direct Tax

  • All companies having annual turnover of 400 crores, will now be under the bracket of 25% corporate tax rate, covering about 99.3% of the companies;
  • PAN card and Aadhar card allowed to be used interchangeably to allow those not having PAN to file returns by simply quoting their Aadhar number. Also the same can be used wherever PAN is required;
  • Pre filed income tax returns forms to be made available containing details of salary, capital gains on securities, bank interest, dividend,etc., to ensure accuracy, error free and timely filing of income tax returns;
  • To provide further incentive to affordable housing, additional deduction of INR 1,50,000 on interest paid on loans borrowed upto 31 March 2020 for purchase of residential house upto INR 45,00,000.
  • Additional income tax deduction of Rs. 1.5 lakh on interest paid on electric vehicle loans;
  • Faceless E-assessments to be implemented from this year in phased manner to reduce taxpayers harassment;
  • Moving towards cashless economy and to shot digital payments, 2% TDS is proposed on cash withdrawals from bank exceeding INR 1 Crore;
  • Individual income tax slabs remain unchanged, however to increase the tax collection surcharge increased on individuals having taxable income from INR 2 Crores to 5 crores and 5 crores above
  • Relief in levy of  Securities Transaction Tax (STT) proposed by restricting its levy on difference between Settlement and Strike Price in case of exercise of options;
  • Capital gains exemptions from sale of residential house for investment in start-ups extended till financial year 2021.
  • ‘Angel tax’ issue resolved- start-ups and investors filing requisite declarations and providing information in their returns not to be subjected to any kind of scrutiny in respect of valuations of share premiums.

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