1. No change in Tax Rates. Surcharge and Cess to continue as existing.2. However a new Section 115 BAC is introduced wherby an individual and HUF...
1. No change in Tax Rates. Surcharge and Cess to continue as existing.
2. However a new Section 115 BAC is introduced wherby an individual and HUF can opt to pay tax as per new tax rates in case it forgo all exemptions and deductions which include deduction under section 80C of PF, LIP etc., standard deduction, LTC, House Rent Allowance, minor income exemption under section 10(32), interest deduction on Home loan under section 24(b) in respect of self occupied house, deduction under section 57(iia) of 1/3rd of Family Pension and also other deductions available under the act. This option to be exercised while filing return in case one does not have business income. For others option is required while filing return for asstt year 2021-22 and once exercised it will be irreversible. New slab rates are as below.
0 - 2.5 Lakh - Nil
2.5 - 5 lakh - 5%
5 - 7.5 Lakh - 10%
7.5 - 10 Lakh - 15%
10 - 12.5 Lakh - 20%
12.5 - 15 Lakh - 25%
15 Lakh and above - 30%
3. Dividend Distribution Tax being abolished wef 1.4.2020. Dividend income now to be taxed as normal income in the hands of shareholder. Benefit of section 80M will be available to a company in respect of dividend income received by it during the previous year and distributed by it, one month before the due date of filing return.
No deduction of expenditure against dividend income will be allowed under section 57 except interest which will not exceed 20% of dividend income.
4. All Indian Citizens to be deemed resident of India if they are not resident of any other country. Accordingly if any Indian is holding Indian passport he needs to establish residential status of other country if he claims to be a non resident. Such Indian Citizen shall be required to pay tax on global income.
5. Further for the purpose of determining residential status, the number of days for stay in India will be 120 days as against 182 days.
For Resident but not ordinary resident now test will be of non resident in 7 out of 10 preceding years as against present condition of 9 out of 10 preceding years.
6. TCS at the rate of 0.1% will be applicable on sale of goods if total sales to one person is more than Rs 50 lakhs by a person having turnover of more than Rs 10 crore.
7. TCS in foreign remittance under LRS exceeding Rs 7.00 lakh at the rate of 5%. Also on oversea tour package &5%.
8. TDS on e-commerce payment to e commerce participant at the rate of 1%
9. TDS on FTS reduced under section 194J to 2%.
10. Charitable Trust Registration and 80 G exemption to be for 5 years. All existing trust to apply again. 80 G exemption holder to submit annual statement of donation received. Failure to submit such statement fee of Rs 200 per day for each day of default under section271G and penalty of Rs 10000 to Rs 1.00 lakh under new section 271J.
11. Penalty for false entry of invoice or omitted invoice @100% of such transactions under new section 271AAD.
12. Vivad se Vishwash Scheme to reduce litigation. Only tax amount to be paid . Full waiver of interest and penalty . In case of penalty and interest dispute which is not related to income only 25% of such interest and penalty to be paid.
In case payment is made after 31.3.2020 the amount to be paid is 110% of tax in dispute and 30% in case of penalty.
13. This will help all taxpayers having issues on penny stock. Share capital etc. to pay just tax and get out of the dispute. Scheme has not been out in public domain but in the Annexure to the budget speech some clarity is coming out. Apparently there is no rider and no exclusion. It should be applicable to all type of defaults and additions.
14. DRP forum not to be limited to TP issues only but to be allowed to non residents for all disputes.
15. Circle rate value adjustment for computing capital gain, sale proceeds and income in the hands of buyer allowed up to 10% of amount paid as against 5% at present.
16. Fair market value of immovable property under section 55 as on 1.4.2001 for computing cost of acquisition not to exceed circle rate value.
17. Concessional rate of 15% introduced in Sept 2019 to manufacturing companies.
18. Tax Audit thresholds increased from Rs 1 crore to Rs 5 crore with a rider that total receipts and total payments in cash should not exceed 5% of such total receipts and total payments made during the year.
19. Overall ceiling of exemption in respect of employers contribution to PF, Superannuation fund and National Pension Scheme restricted time Rs 7.50 lakhs.
20. Survey under section 133A now only with the approval of CIT or DIT.
21. E Appeals system for appeal before CIT(A).
22. E Penalty system before AO.
23. Electricity Generation included as eligible for lower corporate tax rate of 15% under section 115BAB.
24. Due date of filing of Tax Audit report de linked from filing of return.
Tax Audit filing by 30th September
Return filing by 31st October.
25. Income of Foreign Sovereign Wealth Fund from their investments in India have been exempted for investments made till 2024 for a period of 3 years.
26. Taxation of ESOPs deferred to 5 years from date of exercising of option, sale of shares or leaving the company, whichever is earlier.
27. Tax holiday available to startups extended to startups having turnover upto Rs. 100 Crores from the current limit of Rs. 25 Crores. Tax holiday extended to 10 years from 7 years.
28. Tax rate of cooperative societies reduced to 22% plus 10% surcharge.
29. Additional Interest deduction of 1.5 lakhs available to buyers of affordable houses now available for loans sanctioned upto March 31, 2021 (from earlier date of March 31, 2020)
30. Tax holiday of developers of affordable housing extended by another one year upto March 31, 2021.
31. Difference in value allowed upto 10% of stamp duty value for sale or purchase of immovable property.