Amendments proposed in budget 2019
The major amendments proposed in budget 2019 with impact on future assessments are listed below:
|Before Budget 2019
|After Budget 2019
|TDS by certain individuals or HUF for payment made to contractor and professionals
|An individual or HUF have to deduct tax at source (TDS) on payments made to a resident contractor or professional @ 5% when it is for personal use if the annual payment made to a contractor or individual exceeds Rs 50 lakh.
Such person deducting tax under this section shall deposit TDS on his PAN number.
It is also proposed to enable filing of application for issue of certificate for nil or lower rate of TDS.
|This will capture data about income of professionals and contractor in detailed manner and in organized manner.
Thus, this initiative will unearth the undeclared income and batter serve the contractors and professionals as their ITR 4 is completely pre-filled with values of all major services provided by them.
|Consideration for TDS on immovable property
|Only basic value is consider for TDS deduction and charges incidental to purchase of property is not consider.
|Consideration shall include other charges in the nature of club membership fee, car parking fee, electricity and water facility fee, maintenance fee, advance fee or any other charges of similar nature which are incidental to the purchase of immovable property
|Now whatever payments being made for or for the purpose of purchase of immovable property will considered for TDS deduction.
|Gifts made to non-residents
|Gifts made by a resident to another resident are liable for income tax subject to some exemptions
|Gift of any sum of money, or property situated in India, by a person resident in India to a person outside India (not being a gift otherwise exempt), on or after 5th day of July 2019, shall be deemed to accrue or arise in India.
|Now from July onwards same treatment will be given to gifts whether made to resident or non residents. This will also save tax evasion in case of transaction pertaining to non residents.
|Compulsory filing of return
|Filing of return is compulsory only if income exceeds specified limit.
|Now filing compulsory for persons:
1. who have deposited more than Rs. 1 crore in a current account in a year, or
2. who have expended more than Rs. 2 lakh on foreign travel or
3. who have expended more than Rs. 1 lakh on electricity consumption in a year or
4. who fulfils the prescribed conditions,
5. A person whose income becomes lower than maximum amount not chargeable to tax due to claim of rollover benefit of capital gains.
This will ensure that persons who enter into high value transactions also furnish return of income.
|This will further broaden the tax base for the government.
|Interchangeability of PAN and Aadhaar
|The Income Tax Department shall allot PAN to such person on the basis of Aadhaar after obtaining demographic data from the Unique Identification Authority of India (UIDAI).
It is also proposed to provide that a person who has already linked his Aadhaar with his PAN may at his option use Aadhaar in place of PAN under the Act.
|Now tax work is not depend only on PAN card.
Even if a person having only Aadhaar card he can do tax related work easily with his Aadhaar number.
|Quoting of PAN/Aadhaar
|Provision for quoting pan is there but Aadhaar is there
|Quoting and authentication of PAN/Aadhaar shall be mandatory for certain prescribed transactions.
The person receiving relevant documents shall ensure correct quoting and authentication of PAN/Aadhaar for the prescribed transactions.
To ensure compliance of these provisions it is also proposed to amend the relevant penalty provisions.
|To track high value transaction
|Consequences of not linking Aadhaar with PAN
|The Act provides for making PAN invalid if it is not linked with Aadhaar within a notified date.
|Now onwards if a person fails to intimate the Aadhaar number, the PAN allotted to such person shall be made inoperative in the prescribed manner after the date notified for the said linking.
|Past transactions carried out through such pan are saved and traceable.
|Widening the scope of SFT
|Currently very limited person needs to file statement of financial transaction
|Widen the scope of furnishing of statement of financial transactions (SFT) by mandating furnishing of statement by the prescribed persons other than those who are currently furnishing the same.
It is also proposed to remove the current threshold of Rs. 50,000 for application of the provisions requiring furnishing of information,
For ensuring the accuracy of the information furnished, a suitable amendment to the relevant penalty provisions is also proposed.
|All these provision will help in pre filing of return and also further computer based processing of return under section 143 shall be the final assessment in case of small value returns.
|Payment by other electronic modes
|There are various provisions in the Act which prohibit cash transactions and allow or encourage payment or receipt only through account payee cheque, account payee draft or electronic clearing system through a bank account.
|it is proposed to amend these provisions to also allow payment or receipt through other prescribed electronic modes.
|This will promote online transaction.
|TDS on cash withdrawal from banks
|No such provision
|it is proposed to provide for tax deduction at source at the rate of 2% on cash withdrawal by a person in excess of Rs. 1 crore in a year from his bank account.
Some business models, where large cash withdrawal is a necessity, are proposed to be exempted.
It is also proposed that the Central Government may notify the persons to whom these provisions shall not be applicable in consultation with the Reserve Bank of India.
|A step forward to less cash economy.
|Facilities for low-cost electronic payments
|A business enterprise whose annual turnover exceeds Rs. 50 crore shall provide facility for prescribed low cost electronic modes of payment.
For ensuring compliance, a suitable penalty provision is also proposed to be inserted in the Act.
|This will facilitate low cost electronic mode of payment against goods and services.