Individuals and salaried class
a.
Slab rates kept same.
b.
Education Cess and SHEC rates increased to 4% from existing 3%.
c.
Salaried assessee to avail a standard deduction of Rs.40,000/-
The
standard deduction of Rs.40,000 replaces medical allowance of Rs 15,000 and
transport allowance of Rs 1600 per month i.e. 19,200 per annum, the effective
additional benefit on account of the standard deduction would be an additional
income exemption of Rs 5,800.
|
Particulars
|
Until AY 2018-19
|
From AY 2019-20
|
|
Gross Salary (in Rs.)
|
5,00, 000
|
5,00,000
|
|
(-) Transport Allowance
|
19,200
|
Not Applicable
|
|
(-) Medical Allowance
|
15,000
|
Not Applicable
|
|
(-) Standard Deduction
|
Not Applicable
|
40,000
|
|
Net Salary
|
4,65,800
|
4,60,000
|
For senior citizens
a.
Health insurance premium contribution in case of senior and very
senior citizens extended to Rs. 50,000/- with corresponding amendment under section 80D.
b. No TDS on interest from FD upto Rs 50,000.
c.
Quantum of deduction under section 80DDB for medical treatment
in case of a senior citizen and very senior citizen increase from Rs. 60,000
and Rs.80,000 respectively to Rs. 1,00,000/-
Others
a.
Reduction in corporate tax rate to 25% for companies having a
turnover of Rs 250 crores and less
b.
Charitable / Religious Trusts claiming exemption under section
11 & 12 or under section 10(23C) for a business conducted by them will be
needed to follow the provisions of section 40(a)(ia), 40A and 40A(3) i.e. TDS
compliance to be ensured, Cash payments to restrict within limits of Rs. 10,000
only.
c.
Payment received on termination or modification of terms and
conditions of a contract relating to business now to attract taxation.
d.
A businessman converting stock in trade into capital asset has
to pay the tax on the appreciation.
e.
Number of amendments made in the Income Tax Act to give sanctity
to the ICDS applicability like:
·
Marked to market losses as per ICDS to be
permissible under section 36.
·
Foreign exchange difference in revenue items
arising as per ICDS applicability to be recognised as profit or loss.
·
Insertion of section 43CB proposed to
provide validity to the applicability of percentage completion method on
construction contracts.
f.
Immovable property relating stamp duty valuations having impact
under section 43CA, 50CA and 56(2)(x) relaxed to the extent of 5% difference of
the consideration received or accruing as a result of transfer.
g.
Changes in income computation formula in case of truck and
loading tempo operators under section 44AE for heavy goods vechile Rs.1000 per
ton of gross vehicle weight formula on per month basis to be adopted and for
other vehicle Rs.7500/- as old provision to continue.
h.
Reduction in scope of exemption claimable under section 54EC
from any long-term capital asset to the long-term capital arising on
account transfer of land or building or both only. Further the redemption
period of bonds also proposed to be increased to 5 years.
i.
An employee leaving the job may be in receipt of any
compensation or other payment from any person in connection with such
termination or for the modification of terms and conditions of such employment
shall be taxable for the same as income by way of other sources, amendment
proposed under section 56.
j.
Certain amendments made under section 79, 115JB and 140 to
acknowledge and provide relief in cases covered under the Insolvency and
Bankruptcy Code 2016.
k.
Increase in scope of section 80IAC by modifying the definition
of ‘eligible business’ as to include even start-up engaged in innovation,
development or improvement of products or processes or services or a scalable
business model with a high potential of employment or wealth creation. Further
last dated of incorporation of business extended from 31.3.2019 to 31.03.2021.
l.
Relation of minimum number for days of employment of an employee
to 240 days also relaxed to just 150 days in case of footwear or leather
products even.
m.
New deduction section 80PA proposed to be inserted to provide
100% deduction to Producer Companies from eligible business being marketing of
agricultural produce grown by the members or purchase of agricultural
implements, seeds, livestock or other articles intended for agriculture or
processing the agricultural produce of the members.
n.
Section 80TTB to be inserted to provide relief to senior
citizens in respect of income arising in form of interest from banking company,
cooperative society and post office to the extent of Rs. 50,000 for a financial
year. However, in such case the benefit of section 80TTA shall not be
available.
o.
Proposed insertion of section 112A to tax long term capital gain
arising on account of transfer of listed shares and units of equity oriented
mutual fund units @ 10% on an amount exceeding Rs. 1 lakh. However cost for
such purposes prima-facie to take color from fair market value as on
31.01.2018.
p.
Dividend in the nature of section 2(22)(e) also to attract
dividend distribution tax on company @ 30%.
q.
Alignment of dividend distribution tax rates on dividends
distributed by various kinds of mutual funds under section 115R.
r.
Prima-facie adjustment under section 143(1) on account of mismatch
between form 26AS and form 16 or 16A not to take place wef AY 2019-2020.
s.
New sub-section (3A) proposed to be inserted under section 143
to bring up an e-assessment procedure as per Budget Speech of Hon’ble Finance
Minister.
t.
ICDS further strengthened by making necessary amendment in
section 145A.
u.
New section 145B proposed to provide certain exceptions of
taxation in certain special cases.
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