After Budget Income Tax Provisions

After the second consecutive victory of the NDA government, the Finance Minister, in the announcement of the budget for the year 2019, has stated that the taxpayers in the highest income brackets need to contribute more in the form of tax payments, as this move will let the nation develop in a faster pace.

In the budget announcement 2019, the following are the 10 major provisions announced in the income tax bundle:

1. The income tax rates for the individuals with a taxable income range of Rs. 2 crores to Rs. 5 crores were increased by nearly 3 percent and 7 percent respectively.
2. This budget also has proposed a 2 percent of TDS on cash withdrawals of more than Rs. 1 Crore from one bank account in a period of 1 year, as a means to limit the cash dealings, and also has proposed to mandatorily file returns for certain categories of assesses.
3. As a means to bring in the remaining companies under the 25 percent bracket of the corporate tax, the budget has proposed that all the companies that have an annual turnover of Rs. 400 crore will fall under this category, as against the previous proposal of Rs. 250 crore.
4. Through gathering information related to pre-filled tax returns from the relevant sources such as, banks, stock exchanges, mutual funds, retirement fund body EPFO, and other state registration departments, the pre-filled tax returns will be provided to the taxpayers, who will find out the details that include salary income, capital gains from securities, bank interests, dividends and such other.
5. As a measure to improve the affordable housing industry, the budget of the year 2019 has announced a further deduction of nearly Rs. 1.5 lakh, against the interest paid on loans taken until 31 March 2020, to support buying houses of value nearly Rs. 45 lakh.
6. Further to the much ado, the budget also has proposed that the Aadhaar card can also be used as an alternative to the PAN card, which helps the taxpayers those who do not hold PAN card but have Aadhaar card.
7. The income tax exemption limit on the withdrawal limit from the National Pension System has been proposed to increase from the current 40 percent to 60 percent.
8. The budget also has announced the proposal of an additional income deduction of Rs. 1.5 lakh on the loans taken to buy electric vehicles.
9. As a measure to improvise the global competitive ability, a scheme has been proposed that supports the entry of global companies in bringing a transparent competitive bidding process for setting up of mega manufacturing plants in the areas of advanced technology. As a supportive measure for these companies, the government has further announced that the companies will be provided with investment-linked income tax exemptions under the section of 35 AD of the IT Act and also other indirect tax benefits.
10. In order to provide a solution to the angel tax issue, the startups and the related investors that file declarations and provide information in their returns will not be any more liable for scrutiny with regard to valuations of share premiums.