A. DIRECT TAXES
INDIVIDUALS / HUF / AOP / BOI
Ø New Simplified Personal Income Tax Regime [optional for Individual taxpayers] introduced:
· Income upto Rs. 5 lakh - NIL
· 5 to 7.5 lakh - 10%
· 7.5 to 10 lakh - 15%
· 10 to 12.5 lakh - 20%
· 12.5 to 15 lakh - 25 %
· 15 lakh & above - 30%
In the above regime, no deduction or exemption shall be allowed to taxpayers.
Ø Proposal to remove 70 out of 100 exemptions and deduction in tax regime
Ø Pre-fill information of donation will result in hassle-free claims for the individuals claiming tax exemption.
CORPORATES, INTERNATIONAL TRANSACTIONS / NRI / FOREIGN TAXATION OTHER PROVISIONS & OTHER MAJOR ANNOUNCEMENTS:
Ø 'Vivad se Vishwas' scheme for direct tax payers whose appeals are pending at various forum, no interest and penalty will be charged if taxpayers pay by March 31, 2020. The scheme is applicable for all pending appeals at all levels. Scheme to end in June 2020.
Ø Turnover limit for deductions under Section 80-IAC to start-ups has been proposed to be increased to Rs. 100 crore.
Ø Dividend Distribution tax has been abolished. The dividend will be taxable in hands of the recipients. Dividend received by holding from subsidiary is exempt.
Ø Concessional tax rate of 15% extended to power generation companies.
Ø ESOP: Ddeferment of tax payment by employees on ESOPs from startups by five years.
Ø 100% tax concession to sovereign wealth funds on investment in infra projects.
Ø Option to be provided to cooperative societies to be taxed at 22% plus 10% surcharge and 4% cess, with no exemptions or deductions. Cooperative societies to be exempted also from Minimum Alternative Tax.
Ø The date of approval of affordable Housing project has been extended to 31st mar 2021 for getting tax benefits.
Ø The Threshold limit for conducting tax audit has been extended from Rs. 1 crore to Rs 5 crore.
Ø Currently, while taxing income from capital gains, business profits and other sources in respect of transactions in real estate, if the consideration value is less than circle rate by more than 5 percent, the difference is counted as income both in the hands of the purchaser and seller. This limit has been increased to 10%.
Ø Process of registration of Charitable Institutions shall be made completely electronic under which a unique registration number (URN) shall be issued to all new and existing charity institutions. To facilitate the registration of the new charity institution which is yet to start their charitable activities, proposal to allow them provisional registration for three years.
Ø Income Tax Act to be amended to allow faceless appeals against tax orders on lines of faceless assessment.
Ø PAN will be issued instantly based on Aadhaar without any documentation.
Ø TDS rates reduced for FPIs, municipal bonds & interest on listed bonds
B. INDIRECT TAXES:
Ø New GST return systems will be effective from 01.04.2020.
Ø E invoicing for assessee having turnover more than 100 crores is mandatory with effect from 01.04.2020.
Ø Announcement of health cess on import of medical equipment.
Ø Custom duty raised on footwear and furniture.
Ø Customs Act being amended to neutralise misuse of FTA provisions
Ø Amending laws to ensure no undue gains for imports under FTA
Ø To transfer FY17, FY18 cess balance to GST compensation fund
Ø GST compensation to states to be limited to cess collection.