The Hon’ble Finance Minister Smt. Nirmala Sitharaman on Saturday presented Union Budget in Lok Sabha, Based on her speech on 01.02.2020. The prominent themes of Union Budget are Aspirational India, Economic Development and Caring Society.
DIRECT & INDIRECT TAX:
1. Individual Slab Rate Tax for Financial Year 2020-21, an option to select either OLD or NEW Rate;
| Total Income (Rs.) in between | Old Rate (%) | New Rate (%) | |
| 0 | 2,50,000 | NIL | NIL |
| 2,50,001 | 5,00,000 | 5 | 5 |
| 5,00,001 | 7,50,000 | 20 | 10 |
| 7,50,001 | 10,00,000 | 20 | 15 |
| 10,00,001 | 12,50,000 | 30 | 20 |
| 12,50,001 | 15,00,000 | 30 | 25 |
| 15,00,001 | Above | 30 | 30 |
| Exemption [ HRA,LTA, Standard Deduction (50k) etc] | YES | NO | |
| Deduction (Chapter VIA) [80C-LIC etc
80D-Mediclaim etc. |
YES | NO | |
| Interest on Housing Loan | YES | NO | |
Note; 1. Income below Rs.5 Lakh is tax free in both cases old & new after availing rebate u/s 87A.
2. Assessee is supposed to calculate taxes as per own opinion. Break even point of exemption is 2.50 lakh for income falling in maximum marginal slab. If total exemption is more than 2.50 Lakh go for old rates else new rates.
2. Exemptions & Deductions in Income Tax reduced from 100 to 70,
3. Additional deduction of 1.5 Lakh for interest on loans borrowed for Affordable housing (self occupied) of Rs.45 Lakh till 31.3.2021 (one more year extended).
4. Tax holiday of developers of affordable housing extended by another one year i.e. 31st March 2021.
5. Difference between sale consideration of Land / & Building and Stamp Duty is allowed from 5% to 10%, (Sec43 CA,50C & 56).
6. DDT (Dividend Distribution Tax) removed, and now Dividend is taxable in the hand of receiver of the Dividend i.e. tax payer at their applicable rate. (Sec-115-O).
7. Deduction for Exps against Dividend / income received from units is proposed maximum 20%. No deduction in respect of Mutual Fund / Specified Co. (other than deduction on account of interest exps.), (Sec-57)
8. Tax Audit limit increased to Rs.5 Crore from One Crore in cases of less than 5% of cash business i.e. Receipts and Payments, (Sec-44AB).
9. Turnover threshold for Audit of MSMEs increased from Rs.1 Crore to 5 Crore.
10. Corporate Tax @ 15% to manufacturing co., also extended to Electricity / Power
11. ITR filing due date proposed to be 31st October in place of 30th In case of Tax Audit report, may be furnished prior one month at least to the due date, (139(1)).
12. TDS u/s 194J in case of Technical services (other than professional services & others which @ 10%) to 2%.
13. Faceless appeals introduced for Transparency and accountability.
14. Tax Rate of Co-operative Society reduced from 30% to 22% plus surcharge & Cess with no exemption & deduction.
15. In case of Startups, tax holiday period extended to 10 years from 7 years, and tax holiday available having turnover upto Rs.100 crore from Rs.25 Crore.
16. Vivaad se Vishwas scheme introduced to allow all taxpayers in litigation at any level of appeal. Taxpayer can pay the disputed tax amount with full relief from interest and penalty if the amount is paid till March 31, 2020. This scheme will remain open till 30th June 2020, and hence who avail this scheme after 31st March 2020 will have to pay some additional amount.
17. Allotment of PAN, soon launch a system under which instantly allotted online on the basis of Aadhaar without any requirement for filling up of detailed application form.
18. Issuance of Unique Registration Number to all Charity Institutions for easy tax compliances.
19. Simplified GST return shall be implemented from 1st April 2020.
20. Refund process in GST to be fully automated.
21. Health Cess to be imposed on imports of Medical equipment.
22. Fiscal Deficit for 2020-21 is estimated 5% (3.8% for 2019-20).
Disclaimer; It is based on available sources like FM speech, news agencies, medias etc., not responsible for any misrepresentation.
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