Direct Taxation (Income Tax)
- Budget the government has proposed a new tax system under section 115BAC which will significantly change the rates for tax bands.
- Taxpayers can choose whether they want to pay taxes in the new system or if they want to continue paying taxes in the current system in budget 2020. However, some taxpayers may not be able to return to the existing tax plan after choosing to follow the news.
- Pursuant to section 194J – technical service charges, the TDS has been reduced from 10% to 2%.
- The tax control threshold has been increased from 1 rupees to 5 crores provided that the gross turnover / income does not exceed 5% in the previous year. In addition, the payment made in P.Y in cash does not exceed 5%. For these taxpayers, the deadline for tax checks was postponed to October 31 from September 30.
- Pursuant to Article 80 EEA, the additional deduction of Rs.1.5 lakh for interest paid on home loans will now be authorized for loans sanctioned until March 31, 2021.
- DDT is no longer available. Instead, dividend recipients will have to pay taxes at the applicable rate.
- For startups, employees who hold stock option plans (ESOPs) can defer payment of fees for up to five years from the fiscal year, until they leave the startup or until they sell their shares, whichever occurs first.
- Eligible startups with a turnover of up to Rs 25 million can deduct 100% of their profits during three years of continuous evaluation over seven years if the total turnover is less than Rs 25 million.
- This limit has now increased to Rs 100 million. In addition, the eligibility period of the deduction has increased to 10 years instead of 7 years.
- Article 194: Dividend paid by Indian companies to an Indian resident shareholder, TDS @ 10% if the dividend amount exceeds 5000 during the year.
- Section 194K: the dividend paid by MF to a 10% TDS resident will be deducted only if the dividend amount exceeds 5000 during the year
- Article 194: Dividend on shares paid by the company exceeding Rs 5000 will be subject to TDS @ 10%
- Section 194-O: Any payment made by the e-commerce operator to the participant, the operator must deduct 1% of TDS only if the annual amount paid or credited exceeds Rs 5 lakh.
- Section 206AA: for 194O, it was changed to 5% instead of 20% in case of non-supply of the PAN.
- Residential status change: (Section 6)
- An individual, being a citizen of India, will be considered a resident of India in a previous year if he is not subject to tax in any other country.
- A person who is a citizen of India or a person of Indian origin who, outside of India, visits India in a previous year and remains in India for 120 days or more, must reside in India.
- It is said that a person “is not habitually resident” in India in a previous year, if
- a person who has not been a resident of India in seven of the ten years preceding that year;
- or
- an undivided Hindu family whose manager had not resided in India in the seven of the ten years preceding this year.
- Article 234G (insertion of a new section) concerned the payment of a fee of 200 rupees per day for non-compliance of the declaration or supply certificate pursuant to article 35 by the research association, the university, college, business or any other institution.
- Article 43 CA, if the value adopted for the purposes of stamp duty does not exceed 110% of the consideration received, the consideration received will be considered as the total value of the consideration to calculate the profits and profits on the transfer of said asset that does not hold capital goods.
- Before the amendment it was 105% instead of 110%.
- Section 50C, in the case of a transfer of ownership of capital such as land or buildings or both, if the value adopted for stamp duty purposes does not exceed 110% of the consideration received, the consideration received will be considered as the total consideration for the calculation of capital gains during the transfer of these fixed assets. Before the change, it was 105% instead of 110%.
Indirect Taxation (GST, Customs)
- The stakeholder / beneficiary of a false ITC is also responsible for a penalty of 100% of the tax in question.
- Restricted membership regime for taxpayers providing interstate services, supplies that cannot be collected for GST, and deliveries through an e-commerce operator where TCS is deductible.
- The date of the debit note is considered independent for the use of the incoming tax credit, canceled from the invoice date.
- The retroactive effect was given for the transitional arrangements from 1 July 2017 to override the decision of the Supreme Court of Gujarat in the Siddhartha Enterprises case.
- The privileges granted to report the TDS certificate form and late fees (200 per day, up to 5,000) for not issuing the TDS certificate have been revoked.
- A provision has been included for the cancellation of voluntary GST registration for prominent individuals.
- The power to justify the delay in the cancellation request was granted to the statutory auditor and the additional statutory auditor for a period of 30 days.
- Refund of current reverse taxes on tobacco products retroactively from July 1, 2017 is prohibited.
- Applicability of the CGST rate of 6% (total IGST of 12%) for the supply of pulleys, wheels and products used in Agri machines from July 1, 2017 to December 31, 2018.
- Ladakh fell under the definition of Union territory. J&K has an appeal court.
- The law has been amended to extend incarceration to the person ‘making the commitment’ and ‘the person who keeps the benefit’.
- Previously, the sentence was limited to the person committed. This penalty is limited to the person fraudulently using ITC without an eligible invoice. As a result, these crimes will be recognizable and unavailable.
- In retrospect, the supply of fish meal exempted the GST from 1 July 2017 to 30 September 2019.
- The provision allowing the revocation of the difficulty level by the CBIC was increased from 1 July 2017 from the previous three-year limit to five years.
- The order determining the costs for special audits does not require the approval of the Board.
- Measure to extend the time it takes to return the input of workers and capital goods.
- Powers to communicate the time and methods for issuing an invoice for a specific category of supplies or services.
- Registration in Annex II of the CGST Law on “Transfer of Company Assets” now excludes transactions that have been executed without consideration.
MSMEs:
- The government proposed measures for the MSMEs:
- Changes will be made to the Factor Regulation Act 2011.
- Changes will be made to allow NBFCs to extend the financing of invoices to MSMEs.
- Provision for debts subordinated to MSME by banks, guaranteed by the Credit Guarantee Trust. Debt counts as almost equity.
- Demand-based financial loans will be introduced for the MSME-demanded financial loan product to address the problem of late payments and cash flow asymmetries for MSMEs.
Public sector banks (PSB):
- There is a solid mechanism to ensure the safety of all planned commercial banks and depositors’ money.
Agriculture:
- The government aims to double farmers’ incomes by 2022
- Help 15 lakh farmers solarise their grid-connected pumping units
- “KisanRail” and “KrishiUdaan” for the continuous transport of perishable agricultural products
- Increases the coverage of artificial insemination by up to 70%
- Increase exports of fisheries products to 1 Lakh rupees by 2024-25
Education:
- Around 150 higher education institutions will begin learning integrated courses
- Special transition courses to improve the skills of people looking for work abroad
- Ind-SAT takes place in Africa and Asia, is studied within the Indian program
- Allocation of 99,300 Rs for the education sector in the 2020-21 period
- Allocation of 3 billion rupees for skills development
Financial sector:
- Deposit insurance coverage has increased from Rs 1 lakh to Rs 5 lakh per depositor
- Limit of eligibility to NBFC for the recovery of debts according to the SARFAESI law, proposed to reduce the activities of 100 crores of rupees or loans of 50 rupees lakh
- NPS trust divorce for PFRDAI civil servants
- Proposal to sell the public balance to IDBI Bank
- Goals related to water, well-being and health.
- More than 20,000 hospitals grouped under Prime Minister Jan Arogya Yojana
- The TB Harega Desh Jeetega campaign was launched to end TB in 2025
- Extension of the Jan AushadhiKendra program to all districts by 2024
- Emphasize liquid and gray water management together with waste management.
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