Revised Quick analysis of Salient Features of Budget 2020-21-
Tax Rates
1.No change in Tax Rates. Surcharge and Cess to continue as existing.
2.However a new Section 115 BACis being 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 onew doesnot have business income. For others optionis required while filing return for asstt year 2021-22 and once exercised it will be irreversible.
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 distibuted 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 deedmed 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 othe 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.
6. TCS in foreign remittance under LRS exccding Rs 7.00 lakh at the rate of 5%. Also on oversea tour package &5%.
7. TDS on e-commerce payment to e commerce participant at the rate of 1%
TDS on FTS reduced under section 194J to 2%
9. 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.
7. Penalty for false entry of invoice or omitted invoice @100% of such transactions under new section 271AAD.
10. 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.
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.
11. DRP forum not to be limited to TP issues only but to be allowed to non residents for all disputes.
12. 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.
13. 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.
14. 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.
15. Overall ceiling of exemption in respect of employers contribution to PF, Superannuation fund and National Pension Scheme restricted time Rs 7.50 lakhs.
16. Survey under section 133A now only with the approval of CIT or DIT.
17. E Appeals system for appeal before CIT(A).
18. E Penalty system before AO.
19. Electricity Generation included as eligible for lower corporate tax rate of 15% under section 115BAB.
20.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.
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1. Turnover limit increased to 5 crs for audit under section 44AB. Condition- business to carry less than 5% of total turnover in cash.
2. Faceless Appeals proposed after faceless assessments.
3. Minimum Alternate Tax removed for companies
4. The limit increased by 5% to 10% for difference between stamp value and the actual consideration for taxation under other sources, capital gain or business income.
5. New Tax regime introduced for Individual tax slab where no deduction and exemption can be claimed under new tax regime
Change in IT slab for individuals:-
0-2.5 lacs no tax
2.5-5 lacs- 5%
5-7.5 lacs- 10%
7.5- 10 lacs- 15%
10-12.5 lacs- 20%
12.5- 15 lacs- 25%
Above 15 lacs- 30%
6. Dividend Distribution Tax Removed. Hence companies will not be required to pay DDT on dividend provided. Individual need to pay Tax under normal slab rate
7. Cases pending in Income Tax- Viwad se Viswas- no Interest and penalty to be paid if disputed tax is paid by 31.03.2020. Post 31.03.2020- some additional amount needs to be paid and benefit to be given max by 30.06.2020.
8. Cooperative society to be taxed at 22% with no exemptions/deductions. Also no AMT applicable.
9. Corporate Tax for new manufacturing Company 15%
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👉 NCLT orders insolvency proceedings against Dalmia Cement arm - On the basis of demand notices issued by Axis Bank and HDFC Bank, Guarant Co had paid $10,842,267.16 and $11,221,084.9 to the banks, respectively. The Guwahati Bench of the National Company Law Tribunal (NCLT) has given its approval to start insolvency proceedings against Calcom Cement India, a subsidiary of Dalmia Cement (Bharat), admitting an insolvency petition filed by Mauritius-based Guarant Co. Dalmia Cement said it would move the National Company Law Appellate Tribunal (NCLAT) against this judgment. GuarantCo, a financial creditor to Calcom Cement, had filed the insolvency petition last year at the NCLT against the company under Section 7 of the Insolvency and Bankruptcy Code. According to the petition, there was a total “default” of around Rs 100 crore by the cement manufacturing firm as on September last year.
👉 Anil Agarwal-led Vedanta Ltd on Friday said it is implementing the resolution plan for the acquisition of insolvent Ferro Alloys Corporation Limited (FACOR) approved by the Cuttack bench of National Company Law Tribunal (NCLT).
The consideration payable for the acquisition of FACOR on debt and cash free basis under the approved plan stands at Rs 10 crore. Alongside, an equivalent cash balance in FACOR’s subsidiary, FACOR Power Limited (FPL) is also payable upfront having zero coupon, secured and unlisted Non-Convertible Debentures (NCD) of aggregate face value of Rs 270 crore to the financial creditors payable equally over four years commencing March 2021.
Vedanta Limited will acquire management control and as per approved resolution plan as it will hold 100 per cent of the paid-up capital of FACOR, Vedanta said in a regulatory filing.
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👉 Relaxation of additional fees and extension of last date of filing of AoC-4 NBFC (Ind AS) and AoC-4 CFS NBFC (Ind AS) for FY 2018-19 under the Companies Act, 2013 - reg.Pdf(898 KB) http://www.mca.gov.in/Ministry/pdf/Circular_30012020.pdf
👉 Committee for Capacity Building of Members in Practice, ICAI is organising 6 CPE hours Training Programme on Auditors engagement in Procurement post review for World Bank Funded projects to be held on 31st January, 2020 at New Delhi. https://www.icai.org/event.html?event=5098
👉 Click here for Programme Sheet. https://resource.cdn.icai.org/57924ccbmp47219.pdf
👉 Online Payment of Registration Fees. https://ccm.icai.org/?progid=2693
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👉 Dalmia Cement on Wednesday said it will move the National Company Law Appellate Tribunal against the National Company Law Tribunal for accepting an insolvency case against its subsidiary Calcom Cement. GuarantCo Ltd., part of the Private Infrastructure Development Group, had moved the Guwahati bench of the NCLT in October 2019 to initiate insolvency proceedings against Calcom Cement, in which Dalmia Cement holds 75 percent stake, for alleged failure to repay dues of around Rs 100 crore.
👉 In a move that will help lessen the burden on the National Company Law Tribunal (NCLT), the government has notified the rules for winding up of companies under the companies law.The Corporate Affairs Ministry has notified the Companies (Winding Up) Rules, 2020, which would be effective from April 1.
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GST Update- Considering the difficulties being faced by taxpayers in filing *GSTR-9 and GSTR-9C for FY 2017-18* it has been decided to extend the due dates in a staggered manner for different groups of States to *3rd, 5th and 7th February 2020* as under. Notifications will follow.
Group 1: Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Puducherry, Telangana, Andhra Pradesh, Other Territory - 3rd February 2020
Group 2: Jammu and Kashmir, Himachal Pradesh, Punjab, Chandigarh, Uttarakhand, Haryana, Delhi, Rajasthan, Gujarat- 5th February 2020
Group 3: Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Andaman & Nicobar Islands, Jharkhand, Odisha, Chhattisgarh, Dadra and Nagar Haveli and Daman and Diu, Lakshadweep, Madhya Pradesh, Uttar Pradesh- 7th February 2020
Source- https://twitter.com/cbic_india/status/1223289890558758912?s=08
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News
Ø Fiscal deficit reaches 132.4% of FY20 target
Ø GST collection crosses Rs 1.1 lakh cr in January
Ø Forex reserve hits fresh lifetime high of $466.69 billion
Ø BSE, NSE to open for trading on Saturday for Budget
Ø ITC Q3 results: Profit jumps 29% to Rs 4,142 crore
Ø GDP growth rate for 2018-19 revised to 6.1 pc
Ø Survey suggests scrapping of Essential Commodities Act
Ø ESOP for public sector bank employees mooted
Ø Tech Mahindra Q3 net profit slips 5% YoY to Rs 1,146 crore, revenue up 8%
Ø HUL reports 12.95% rise in consolidated net profit at Rs 1,631 cr
Ø IRDAI's Committee on micro insurance suggests ways to boost segment
Ø Vedanta Q3 PBT at Rs 3,806 cr, up 9.4% on lower costs, exceptional gain
Ø India has benefited overall from free-trade agreements
Ø Coromandel International posts ₹265 cr profit in Q3
Ø Vedanta buys Ferro Alloys Corp for ₹10 crore
Ø Eveready sells Hyderabad plot for ₹100 crore
Ø FinMin recommends subsidy cuts to expand fiscal room
Ø Heritage Foods nets ₹11.7 crore in Q3
Ø Adani energy subsidiary to set up 700 MW hybrid energy plant
Ø NSE to launch RFQ platform for debt securities on 4 Feb; BSE on 3 Feb
Ø Motherson Sumi Systems to demerge domestic wiring harness unit
Ø BOI back in black in Q3, reports net profit of ₹106 cr
Ø No relief for depositors, SC dismisses DHFL fixed deposit holders' plea
Ø Drop in commercial vehicles diffuse gains in JLR for Tata Motors
Ø Govt. to spend Rs 25 lakh crore to boost rural economy; over Rs 43000 cr disbursed under PM-KISAN scheme
Ø Brexit Day: Businesses see promising India-UK ties ahead
Ø Bharti Airtel says its name removed from DGFT blacklist
Ø Indiabulls offers to buy back its cheapened bonds amid prolonged credit squeeze
Ø Slowdown bottomed out, GDP expected to grow at 6.5 per cent: Chief Economic Adviser
Ø Economic Survey calls for USD 1.4 trillion spending on infrastructure
Ø India's share in global commercial services exports up at 3.5 per cent
Ø Kotak Bank and RBI smoke peace pipe
