Key Highlights till Noon
1. Indian economy will reach $3 tn in current year
2. "One Nation, One Grid" for power availability to states at affordable rates
3. Railway infra would need an investment of 50 lakh crores between 2018 and 2030; PPP to be used to unleash faster development and delivery of passenger freight services
4. Pension benefits will be offered to 3 crore shopowners with annual turnover of less than Rs 1.5 crore under new scheme called Pradhan Mantri Man dhan Scheme
5. Plans to reach 5 trillion USD economy
a) Heavy investment in infrastructure
b) Digital Economy
c) Job creation
6. 350 crore rupees allocated for 2% interest subvention for all GST-registered MSMEs on fresh or incremental loans
7. Social Stock Exchange under SEBI proposed
8. 100% FDI will be permitted for insurance intermediary
9. Relaxation of KYC norms for foreign investors
10. Propose to merge the NRI portfolio investment scheme route with FPI route
11. Rs 80,250 crore dedicated to building 125,00 km of roads in the next 5 years
12. 1.25 lakh kilometers of roads will be upgraded
13. Public holding in listed firms may go up to 35% from the current 25%
14. By 2022, power and LPG will be provided to all households
15. 5 lakh villages are now open-defecation free. 9.6 crore toilets have been constructed since 2014
16. By 2022, every single rural family except those who are unwilling to take the connection, will have an electricity and a clean cooking facility
17. Ease of doing business should apply to farmers too
18. Govt to launch ATM-like One Nation One Card for global travel
19. Proposes to being new Education Policy
20. Proposes to set up National Research Foundation
21. New Tenancy law to be created
22. New construction on Central government land / affordable housing
23. New Payment platform for filing of bill : Timesavings
24. NBFC allowed to transferred to local investors ( with lock-in )
25. FPI investors KYC to be altered to facilitate more investment
26. Electronic fund raising platform , for listing voluntary organization and social enterprises
27. FDI and FPI to be enhanced
28. Media , Avaiation , Insurance to enhanced
29. Enhanced limit in Single retail brand FDI ( controversial announcement )
: NSIL launched to commercialize ISRO retail programme
30. PM Sadak yojna , 97% of rural India connected
31. 30,000 km of road built using green technology , low carbon emission
32. 125000 road will be upgraded under Pradhan mantri gram sadhak yojna
33. Bamboo , honey , khadi clusters to be promoted in villages
34. 80 livehood and several technology incubator to be launched
35. Support private entrepreneurship connected with farmers , renewable energy , bamboo , timber
36. Dairy industry will be assisted
Janshakti mantralaya will be formed , to ensure har ghar jal mission
.Target : 2024
Department of Drinking water , jal board will come under it
Swach Bharat abhiyaan ; 9.6 cr toilet has been constructed ( expand to undertake solid waste management )
PMGDigital sakshartiya abhiyaan over 2cr over trainned ; Bharat net targeting every local panchayat : work on PPP model
: Education sector
New educational policy to be launched ,
National research foundation ( NRF ) to be launched
Massive online courses through swayam
3 Indian institute among world top 200 ( 400 cr allocated to world class institution )
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Budget Highlights (Taxation)
🌴FM Nirmala Sitharaman has thanked taxpayers for their valuable contribution through taxes for all-round development of the country.
🌴She quotes a verse in Tamil -- 'Just a few mounds of rice cooked from a small piece of land is enough for the elephant. But if the same elephant enters a paddy field it will end up trampling more than it would consume'.
🌴Explaining the verse, she says the government does not intend to 'trample' anybody like the elephant.
🌴Direct tax revenue has grown 78 percent from 2014 to 2019.
🌴Currently, 25 percent corporate tax rate is applicable to companies with an annual turnover of up to Rs 250 crore. This has been extended to companies with turnover of up to Rs 400 crore. Only 0.7 percent companies will remain outside of this 25 percent rate.
🌴Additional income tax deduction of Rs 1.5 lakh on interest paid on loans taken to buy electric vehicles. This leads to a benefit of Rs 2.5 lakh crore over the tax period of the loan for the loan payer.
🌴To resolve the issue of Angel Tax the startups and investors who file requisite declarations will not be subjected to any kind of scrutiny in respect of valuation of share premium. A mechanism of e-verification will be put in place and with this, the funds raised by startups will not require any tax scrutiny.
🌴FM Nirmala Sitharaman proposes measures to carry forward and set off losses for startups and increase in period of exemption of capital gains from the sale of residential house for investment in startups up to March 2021.
🌴An additional deduction of Rs 150000 on interest on loans borrowed under affordable housing until 2020 (upto 45 Lakhs)
🌴Interchangeability of PAN and Aadhaar - More than 120 crore Indians now have Aadhaar. Sitharaman proposes to make the two documents interchangeable so that Aadhaar can be used for verification with no requirement for PAN.
🌴The Securities Transaction Tax or STT is proposed to be restricted to the difference between settlement and strike price of options.
🌴Our government has taken number of initiatives to promote digital payments. FM says to discourage the practice of making business payments in cash the government proposes to levy TDS of 2% on cash withdrawal exceeding Rs 1 crore in a year from a bank account, she says.
🌴BHIM, UPI, Aadhaar Pay, NEFT, RTGS can be used to promote less cash economy. Business establishments with annual turnover of Rs 50 crore will have to use these modes of payments with no charges or merchant discount rates will be imposed on customers or merchants. RBI and banks will absorb these costs, she says.
🌴##Direct Taxes - In view of rising income levels, a surcharge will be levied on individuals with taxable income of Rs 2 to 5 crore, and Rs 5 cr and above. The effective tax rate for these categories will increase by around 3% and 7%, respectively.
🌴GST rates have been eased with a relief of Rs 92,000 crore provided during the year. Further measures are being worked out to ease filing returns and tax compliance. A simplified single monthly return is now being ruled out. Taxpayers with an annual turnover of less than Rs 5 crooe will have to file only quarterly returns, she says.
🌴TDS of 2% on cash withdrawal exceeding Rs. 1 cr. from a Bank account per year
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Budget Updates
Income-tax
1. The threshold limit for reduced tax rate of 25% in case of domestic companies has been increased from Rs. 250 crores to Rs. 400 crores. Thus, a domestic company whose total turnover or the gross receipt in the previous year 2017-2018 does not exceed Rs. 400 crore shall be taxable at the rate of 25%.
2. A new Section 80EEA has been inserted to provide for deduction of up to Rs. 1.50 lakhs for interest on loan taken from any financial institution for acquisition of a residential house property whose stamp duty value does not exceed Rs. 45 lakhs.
3. A new section 80EEB has been inserted to provide for a deduction of Rs. 1.5 lakhs in respect of interest on loan taken for purchase of an electric vehicle from any financial institution.
4. The new rate of surcharge for Individual, HUF, AOP, BOI and AJP shall be - 10% (for income of Rs. 50 lakhs to Rs. 1 crore), 15% (for income of Rs. 1 crore to Rs. 2 crores), 25% (for income of Rs. 2 crores to Rs. 5 crores) and 37% (for income exceeding 5 crores).
5. Any sum of money paid, or any property situated in India transferred, on or after July 5, 2019 by a person resident in India to a person outside India shall be deemed to accrue or arise in India under Section 9.
6. Furnishing of return of income shall be mandatory under Section 139 if an individual has deposited Rs. 1 crore or more in current account or he has incurred expenditure of Rs. 2 lakhs or more on foreign travel or he has incurred expenditure of Rs. 1 lakh or more on electricity consumption.
7. Income-tax return can be filed using Aadhaar Number, if person hasn't been allotted PAN. If a person has linked his Aadhaar number with PAN, he may also furnish his Aadhaar number in place of PAN in the Income-tax return.
8. PAN allotted to a person shall be deemed to be invalid, if he failed to intimate the Aadhaar to the Dept.
9. A new Section 194N has been inserted to require deduction of tax at source at the rate of 2% if aggregate of cash withdrawn during the financial year from any account maintained with a banking company or cooperative bank or post office exceeds Rs. 1 crore.
10. The sunset date for transfer of residential house property, for claiming exemption under Section 54GB in respect of investment made in eligible start-ups, has been extended from 31st March, 2019 to 31st March, 2021. Further, the conditions of minimum shareholding or voting rights has been relaxed from 50% to 25%.
11. Application under Section 195(2) and 195(7) for lower or nil deduction of tax from sum paid or payable to non-residents person can be filed electronically.
12. A new Section 194M has been inserted to require any individual or HUF (who is not required to deduct tax under Section 194C or 194J) to deduct tax at source from sum paid to a contractor or professional if aggregate payment during the year exceeds Rs. 50 lakh. The tax can be deposited under this provision without any requirement to obtain TAN.
13. As per Section 194-IA, a buyer is required to deduct tax at source from the consideration paid to buy an immovable property. An explanation has been inserted that 'consideration for immovable property' shall include all charges paid towards club membership fee, car parking fee, electricity and water facility fees, maintenance fee, or any other charges of similar nature, which are incidental to transfer of the immovable property.
14. In case of failure to file an Income-tax return, the prosecution proceedings are initiated under Section 276CC if the tax payable by the assessee is Rs. 3,000 or more. This threshold limit has been increased to Rs. 10,000.
15. Constituent entity of an International group shall now be required to keep and maintain information and document under Section 92D and file required form even when there is no international transaction is undertaken by such constituent entity.
16. There are various provisions in the Act which requires a person to make payment by account payee cheque/draft or ECS. In order to encourage other electronic modes of payment, the Government has proposed to amend relevant provisions to include other electronic modes of payment.
17. Tax shall be deductible under Section 194DA at the rate of 5% only on the income component of life insurance pay-out. The existing rate of TDS was 1% on the gross amount.
18. Relief under Section 89 shall be considered while computing the tax liability under Section 140A, section 143, section 234A, section 234B, and section 234C to avoid genuine hardships to the taxpayers who are claiming such relief.
19. Every person, carrying on business, shall, provide facility for accepting payment through electronic modes if his turnover or gross receipts exceeds Rs. 50 crores. The Payment and Settlement Systems Act, 2007 is proposed to be amended to provide that no bank or system provider shall impose any charge upon anyone, either directly or indirectly, for using the electronic modes of payment.
20. A taxpayer has been allowed to withdraw 60% of total amount from NPS as tax free. Currently, the exemption is allowed only up to 40% of the total corpus amount.
21. Benefit of first proviso of Section 201(1) has been extended in case of failure to deduct tax at source from sum paid to non-residents. Thus, a deductor shall not be deemed to be an assessee in default even if he fails to deduct tax from sum paid to a non-resident, if such non-resident discloses such income in his return of income and pays tax due on such income and a certificate from a Chartered Accountant is furnished to this effect.
22. Deduction of up to 10% of salary is allowed under Section 80CCD in respect of contribution made by an employer to NPS. The limit has been proposed to be increased to 14% of salary in case of Central Government's employees.
23. Section 12AA has been amended to provide that at the time of granting of registration to a trust or institution the Pr. CIT or CIT shall also satisfy himself that the applicant trust or institution also satisfy the requirements of any other law which is material for the purpose of achieving its objects.
24. The Pr. CIT or CIT has been empowered to cancel the registration under Section 12AA, if after granting registration it has been noticed that the trust or institution has violated requirements of any other law which was material for the purpose of achieving its objects.
25. Section 115QA which requires payment tax on distributed income in case of buy-back of shares has proposed to be extended to listed companies as well.
26. ITR filing is mandatory, if total income of assessee before claiming the benefit of capital gain exemption under sections 54, 54B, 54EC, 54F, 54G, 54GA and 54GB, doesn't exceeds the maximum amount not chargeable to tax.
Goods and Services Tax
1. A Proviso has been inserted to clarify that interest for late payment of tax shall be levied only on that portion of tax which has been paid by debiting the electronic cash ledger. Earlier there was a confusion among taxpayers on this issue whether such interest would be charged on gross tax liability or only on net tax liability. However, there is one exception to this rule wherein interest shall be levied on gross tax liability. Where returns are filed subsequent to initiation of any proceedings under GST Act, the interest shall be levied on the gross tax liability.
2. Every registered person shall authenticate, or furnish proof of possession of Aadhaar number. If an Aadhaar number is not assigned to the registered person, such person shall be offered an alternate and viable means of identification. In case of failure to undergo authentication or furnish proof of possession of Aadhaar number or furnish alternate and viable means of identification, registration allotted to such person shall be deemed to be invalid.
3. Now a registered person can transfer any amount of tax, interest, penalty, fee or any other amount available in the electronic cash ledger to the electronic cash ledger for Integrated Tax, Central Tax, State Tax, Union Territory Tax or Cess through a new form PMT-09 subject to the conditions and restrictions prescribed under GST Act. Such transfer shall be deemed to be a refund from the electronic cash ledger.
4. The Central Government has been authorized to pay the amount of refund towards State taxes to the taxpayers.
5. The Government shall constitute an Authority 'National Appellate Authority for Advance Ruling (NAAAR)' for hearing appeals. It shall pass an order within 90 days from the date of filing of appeal.
6. The value of exempt supply of services provided by way of extending deposits, loans or advances (where consideration is received in form of interest or discount) shall not be considered for determining turnover under Composition Scheme.
7. Simplified return forms to be implemented soon. Composition registered dealers are required to pay tax quarterly and file return on annual basis.
