Economy

Simple way to understand tax provisions in the Budget

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DIRECT TAXATION

 New Tax slab (without 80C and other exemptions):

No tax: 0-2.5

5% between 2.5-5 lakh

10% tax between 5-7.5 lakh

15% between 7.5-10 lakh

20% between 10 lakh-12.5 lakh

25% between 12.5-15 lakh

30% between above 15 lakh

 Old Tax slab (with Exemptions):

(those who wish to claim rebates and concessions are free to file taxation under the old regime.)

No tax: 0-2.5

5% between 2.5-5 lakh (Rebate available, i.e No Income Tax, If Gross Total Income is below 5 Lakhs)

20% tax between 5-7.5 lakh

20% between 7.5-10 lakh

30% between 10 lakh-12.5 lakh

30% between 12.5-15 lakh

30% between above 15 lakh

Individuals and HUFs have the option to exercise for every previous year the new tax slab regime where they have no business income, and in other cases the option once exercised for a previous year shall be valid for that previous year and all subsequent

The option shall become invalid for a previous year or previous years, as the case may be, if the Individual or HUF fails to satisfy the conditions and other provisions of the Act.

Removal of section 115-O Dividend distribution tax and moving to classical system that now dividend income is taxable in the hands of shareholder or unit holder as per the respective slab rate.

  • Increase in safe harbour limit of 5% under Section-43CA, 50C and 55 to 10%.
  • The nw scheme with the name Vivaad se Vishwas has been introduced to reduce the litigation. Only Tax amount to be 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 of Payment is made after 31-3-2020 but before 30-06-2020 some additional fee will also have to be paid.
  • For the purpose of determining residential Status, the number of days for stay in India has been changed to 120 days in place of 182
  • Income Tax Return Filing Date in case of assesses liable for audit changed to 31st October but audit report to furnish one month before return filing date e. 30th September.
  • Tax Audit thresholds increased from Rs 1cr to Rs 5cr with a rider that total receipts and total payment in cash should not exceed 5 % of such total receipts and total payment for May during the
  • proposed Instant PAN through Aadhaar
  • E Appeals system for appeal before CIT (A)
  • Corporate society shall also pay the income tax on its income TI<10000 10% of TI

TI>10000 but <20000        1000+20% of amounts which exceed 10000

TI>20000                              3000+30% by which the TI exceeds Rs.20000

  • Extending the time limit for approval of affordable housing projects by the competent authority for claiming deduction under section 80-IBA from the existing date 31-03-2020 to 31-03-2021
  • Tax concession for sovereign fund of foreign governments and other foreign investment(i.e. 100% income exempt)
  • Amendment in section 115BAB to include generation of electricity as manufacturing and newly set up domestic companies in the business of generation of electricity can pay tax at the concessional rate of 15%. Concessional corporate tax rate of 15% to new domestic companies in manufacturing and power sector
  • Amendment to section 194LC to extend the period of concessional rate of TDS on specified securities for the payment of interest to Non- residents to 1st July 2023 from the existing period of 1st July
  • Amendment to section 194LD to extend the period of concessional rate of TDS on specified securities for the payment of interest to Foreign Institutional investors and Qualified foreign investors to 1st July 2023 from the existing period of 1st July
  • Exemption to non-residents from filling the return of income if Total income of such nonresidents only includes the dividend, interest, royalty and TDS has been deducted on such
  • Deferring the tax payment on
  • in order to extend benefit of tax holiday to larger start-ups, it is proposed to increase the turnover threshold for claiming tax holiday from existing 25 crore to Rs. 100 crores. Further, in order to address the concerns of start-ups which may not have adequate profit in initial years for availing this holiday, it is proposed to extend the period of eligibility for claim of 100% deduction from the existing 7 years to 10 years.
  • Insertion of the new section 194O for widening the scope of TDS on E-commerce transactions to deduct TDS @1% (NA to individuals and HUF’S if value of transaction is less than Rs.5 lacs and they provide their PAN or Aadhar)
  • Insertion of section 119A in the act to empower the board to adopt and declare a taxpayers
  • It is further proposed to amend section 115JC of the Act so as to provide that the provisions relating to AMT shall not apply to such individual or HUF having business income. It is also proposed to amend section 115JD of the Act so as to provide that the provisions relating to carry forward and set off of AMT credit, if any, shall not apply to such individual or HUF having business income
  • INDIRECT TAXATION

 Return filing will be made simple with features like SMS based filing for nil return, return pre- filling, improved input tax credit flow and overall

  • Refund process has been simplified and has been made fully automated with no human
  • Basic Custom Duty on Wall fans increased from 5% to 20%
  • Changes are being made in the Rules to strengthen the anti-circumvention measures by making them more comprehensive and wider in scope to take care of all types of circumventions of antidumping duty in line with best international practice. Certain other changes are being made in these Rules for bringing clarity in the scope of these
  • At present, there is no provision for investigation in case of circumvention of countervailing duties. A provision is being incorporated in the Countervailing Duty Rules to enable investigation into case of circumvention of countervailing duty for enabling imposition of such duty. Certain other changes are being made for bringing clarity in the
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