What are the Important changes in Income Tax Act??? Read this important article…
CA Akash C Thakrar, Rajkot
Income Tax Rates
| Total Income | Existing | Proposed (Option) |
| Individual, HUF, AOP, BOI (Conditions in next slides) | ||
| 0 – 2,50,000 | Nil | Nil |
| 2,50,001 – 5,00,000 | 5% | 5% |
| 5,00,001 – 7,50,000 |
20% |
10% |
| 7,50,001 – 10,00,000 | 15% | |
| 10,00,001 – 12,50,000 |
30% |
20% |
| 12,50,001 – 15,00,000 | 25% | |
| More than 15,00,000 | 30% | |
- There is no change in Surcharge and Cess.
- There is no change in Tax rate of Company, Firm,LLP
Conditions…1 : List of Exemptions / Deductions not allowed under proposed Tax Regime.
- Leave Travel Allowance
- House Rent Allowance
- Standard Deduction of Rs.50,000 available to salaried taxpayers
- Entertainment Allowance and Professional Tax u/s16
- Deduction of 15,000 from Family Pension
- Set off of House Property Loss against any other head of income
- All Chp-VI A Deductions except deduction u/s 80CCD(2) and u/s80JJAA
- No set off of Brought Forward Loss or Unabsorbed Depreciation
- No deduction for Additional Depreciation
- No deduction or exemption u/s10/10AA/24(b)/32AD/33AB/33ABA/35AD/35CCC
- No deduction or exemption for allowances or perquisites
Conditions… 2
- Individual or the HUF with businessIncome
- Option once exercised for a previous year shall be valid for that previous year
and all subsequentyears.
- The option can be withdrawn only once for a previous year other than the year in
which it was exercised and thereafter, the individual or HUF shall never be eligible
to exercise option under this section
- Individual or the HUF without businessIncome
- Option to be exercised for every previousyear
- Depreciation shall be allowed for any subsequent year so however, that where there
is a depreciation allowance in respect of a block of asset which has not been given full
effect to prior to the assessment year beginning on 1st April, 2021, corresponding
adjustment shall bemade.
Residential Status
Residence OfIndia
| Particulars | Existing | Proposed |
| Indian Citizen living in india | 182 days or more in a year OR 60 days or more in a year AND 365+ days in 4 years | No Change |
| Foreign or Indian Citizen comes on visit to India (NRI / PIO) | 182 Days or more in a year | 120 Days or more in a year |
Not OrdinaryResidence
| Particulars | Existing | Proposed |
| Individual / HUF | Non Resident in India in nine out of ten preceding previous yearsor
Seven preceding previous years been in India for 729 Days or less |
Non Resident in India in seven out of ten preceding previous years |
An Individual being a citizen of India, shall be deemed to be resident in India in any previous year, if he is not liable to tax in any other country or territory by reason of his domicile or residence or any other criteria of similar nature.
Interest on loan for affordable housing (Section 80EEA)
| Particulars | Existing | Proposed |
| Deduction Upto Rs. 1,50,000 in respect of Payment of Interest on Loan taken for Affordable Housing | Loan sanctioned upto 31st March, 2020. | Loan sanctioned upto 31st March, 2021 |
Deposit Insurance Coverage
| Particulars | Old Regime | New Regime |
| Deposit Insurance and Credit Guarantee Corporation
(DICGC) |
Rs. 1,00,000 | 5,00,000 |
Dividend Distribution Tax (DDT) Removed
- DDT not applicable to domesticcompanies
- Dividend income Taxable in the hands of shareholders / unitholders at the applicable taxrate
Provision for E-Appeal
- It is proposed to empower Central Government to notify an e-appeal scheme for disposal of appeal by an appellate system with dynamic jurisdiction by one or more Commissioner(Appeals)
Cost of Acquisition (asset acquired before 01.04.2001)
| Existing | Proposed |
| Fair Market Value as on 1-4-2001 or Actual cost at the option of the assessee. | Fair Market Value as on 1-4-2001 or Actual cost at the option of assessee subject to Fair Market value shall not exceeds Stamp Value as on 1-4- 2001. |
Penalty
| Section | Particulars | Penalty |
| 271AAD | Books of accounts found to have
– False entry – Omission of an entry to evade taxliability |
Equal to the aggregate amount of such false or omitted entry |
| 271K | Failure to furnish Statements (with reference to sec. 35, 80G) | Rs.10,000 to 1,00,000 |
Sec-139 Due dates of Return of Income
| Type | Due Dates | |
| Existing | Proposed | |
| Income Tax Return (w/o Audit) | 31st July | No Change |
| Income Tax Return (with Audit) | 30th September | 31st October |
| Audit Report | 30th September | 30th September |
| Income Tax Return (Working Partner) | 30th September | 31st October |
| Income Tax Return (Non-working Partner) | 31st July | 31st October |
Applicability of Tax Audit Provisions
|
Turnover or Gross Receipts |
Profit and gains |
Existing Tax Audit Applicable? |
Proposed Tax Audit Applicable? | |
| Cash Receipts / Payments* | ||||
| Upto 5% of total | > 5% of total | |||
|
Upto 1 crores |
< 8% (or 6%) | Yes (44AD) | Yes (44AD) | Yes (44AD) |
| 8% (or 6%) or more | No | No | No | |
|
1 – 2 crores |
< 8% (or 6%) | Yes (44AD) | Yes (44AB) | Yes (44AB) |
| 8% (or 6%)or more | No | No | No | |
|
2 – 5 crores |
Upto 8%(or 6%) | Yes (44AB) | No | Yes (44AB) |
| >8% (or 6%) | Yes (44AB) | No | Yes (44AB) | |
Receipts / Payments = Sales, turnover or gross receipts / Expenditure
TDS
| Section | Particular | Existing | Proposed |
|
194C |
Payment to the contractors | Expression ‘work’ defined | ‘work’ expanded to include
supply according to requirements of the manufacturer, even if raw material is supplied by associate enterprise of such customer |
|
194J |
Any person other than Individual/HUF | Professional Service, Remuneration, Fees, Commission, Royalties, Technical Services : TDS Rate 10% | Professional Service, Remuneration, Fees, Commission, Royalties :TDS Rate 10%
Technical Services : TDS Rate 2% |
|
194O |
Sale done by the Participants through e-commerce platform | — | 1% on gross amount |
TCS
| Section | Particular | Existing | Proposed |
|
206(1G) |
Remittance by Authorized Dealer under LRS | – | being an authorized dealer, who receives an amount, forremittance out of India from a buyer, being a person remitting such amountout of India under the Liberalized Remittance Scheme of the ReserveBank of India shall collect TCS @ 5% if the amount being remitted is more then Rs.7 lacs. W.E.F 01/10/2020. |
|
206(1G) |
Sale of Tour Packages | – | being a seller of an overseas tour programme package, whoreceives any amount from a buyer, being the person who purchases such
package shall collect TCS @ 5%. W.E.F 01/10/2020. |
The author may be contacted on:
A C THAKRAR & ASSOCIATES
Chartered Accountant
223 Star Plaza, Phulchab Chowk, Rajkot-360001.
Mobile No: +91 99257 78245
Emailid:acthakrar.associates@gmail.com
Disclaimer: This Presentation has been prepared solely for general information purpose and is not intended to
constitute a recommendation, offer or advise.
