Key Highlights Interim Budget 2019
The Interim Budget 2019 saw several self-governing proposals. The Finance Minister has announced certain policies and initiatives in regards to the same. In relation to this Savage & Palmer brings to you a quick synopsis and highlights relating to certain key areas announced as part of the interim budget.
Inculcating Tax Compliances & Higher Collections:
The Finance Minister highlighted key achievements from the measures inculcated by the present Government. He states the reduction in the tax rates and increase in the tax payer interface has resulted into a significant rise in the number of tax returns filled and tax collection. He also highlighted certain measures and laws such Demonetization, Black Money Law etc. have helped then tax undisclosed income.
Tax Systems to be made easy with use of Technology:
The FM also stated the use of technology intensive projects which will speed up processes, Tax returns and Tax refunds will be processed within 24 hours of filing. He also stated how the tax department will perform functions online and over the years tax return filings, assessments, tax refund and queries will be undertaken online.
Tax Rates & Rebates:
- The Finance Minister pointed that steps have been undertaken in the recent past by introducing measures such as sanctioning loans up to Rs. 1cr in 59 minutes to the MSME’s in Public Sector Banks.
- Also all MSME units registered and having a GST No. will now have 2% interest rebate onloans of Rs. 1cr
- The government had also increased the share of government procurements from MSMEs through Government eMarketplace* (GeM) to 25 per cent, including 3 per cent from MSMEs run by women.
- SME’s with Earnings below Rs. 5 crores will soon file GST returns on Quarterly Basis
* GeM is a common market place where goods are sold only to Government and related Governmental Organizations and need to be listed on this portal. Since the Government of India is a large purchaser of goods and services in India, MSME’s can list their products on this portal for making available various purchase options to the Government and thereby get the benefits of low/no marketing costs, no need for sampling or sending tenders, dynamic pricing, timely payment guaranteed, etc.
For Tax Payers:
- For salaried tax payers the standard deduction allowed by the Government has increased from Rs. 40,000/- to Rs. 50,000/-
- There will be a full tax rebate for those tax payers with taxable income (after all tax deduction) up to Rs. 5 lakh. In effect the rebate has increased from Rs. 2500/- to Rs. 12,500/- in this budget.
- For those individuals having 2 houses on their name will no longer need to consider one of them as let out for Income Tax purposes and hence will now no longer need to add a notional rent to their taxable income.
- There is also now an increase in the amount of interest earned on FD’s after which the bank will now be liable to deduct TDS. This amount has now increased to Rs. 40,000/- from Rs. 10,000/-
- Similar to the above point, earlier there was a liability on a person holding a TAN (Tax deduction Account Number) to deduct TDS if they were paying a rent exceeding Rs. 1,80,000/- to a resident. This amount has now increased to Rs. 2,40,000/-
- There will now be a tax exemption on the long term capital gain earned on sale of residential house if investment is made in 2 residential house properties as opposed to only 1 earlier. However the caveat here is that the capital gains on sale of house property should be up to Rs. 2cr and this option is available only once in the lifetime of the individual.
- The income tax returns will be processed within 24 hours and simultaneously the refunds will also be disbursed. Also all verifications and scrutiny assessments of returns will be done electronically thus eliminating personal interface between tax payers and tax authorities. This is envisaged to be implemented within the next 2 years.
For Builders and Developers
- 100% Tax exemption on profit and gains earned from development of affordable housing projects are now extended to projects approved till 31stMarch 2020, subject to certain conditions.
- Exemption from notional rent that needs to be included as part of the taxable income on unsold inventory (vacant flats) for the last 1 year has been extended to 2 years.
For further details on Tax benefits, accounting services for the same and rebates in your Industry, feel free to get in touch with your Savage Palmer Relationship Manager