Budget 2020, Tax Updates, Changes by Union Budget 2020


Changes by Union Budget 2020

The Budget was divided in 3 themes, First Theme was Aspirational India, second was Economic development for all, and third was Building a caring society.

Rural Development, Wellness, water and sanitation & Education were the limbs of Aspirational India. Infrastructure, Oil & Gas sector was main theme for Economic development.

Tax payers had huge expectations from This budget in terms of reduction of Tax Rates.

The FM Quoted that “Corporate Rax @ 15% lowest in the world”

Income Tax Updates are as follows:

  • New Slab Rates for FY 2020-21 are as follows:
No Tax – Upto 2.5 Lakh
5% – Upto 5 Lakh
10% Rate – 5 Lakh to 7.5 Lakh
15% Rate – 7.5 Lakh – 10 Lakh
20% Rate – 10 Lakh -12.5 Lakh
25% Rate – 12.5 Lakh -15 Lakh
  • Rate of 30% to be levied for those earning above 15 Lakh
  • Also if your income is upto Rs. 5 Lakh only then Tax Rate is Zero, because of Rebate of Rs. 12500
  • To avail this Tax exemption, one has to give up tax deduction & Exemption. In order to avail Tax Exemption and deduction, old slab rate will be applicable

Others

  • Dividend Distribution Tax Abolished
  • Corporate Tax Rate of 15% available for Power Sector as well
  • TDS Rates on Interest on Bonds reduced to 4% from existing 5%
  • Coorporative societies have option to be taxed @25% with no exemption
  • Tax Audit Turnover raised from Rs. 1 Cr. to Rs. 5 Cr.
  • Tax Holiday for Affordable Housing Extended
  • Faceless Tax Appeals proposed – New Digital Scheme For Tax Litigations
  • New Scheme Introduced for reduction of Income Tax Litigation – Vivad se Vishwas Scheme
  • The FM Also said that government won’t tolerate tax harrassment

Indirect Tax Updates

GST

  • Check on Fraud Input Tax Credit
  • E-Invoice in Process
  • Aadhaar Based Tax Verification Introduced

Customs Act

  • Strict Checks for import of sensitive Items
  • Check on Dumping of Goods
  • Governement to take measures to ensure that medical equipments are made in India,┬áHealth Cess Proposed on Medical Equipments

Please note that these are the summarised updates based on proposed budget. Please see detailed Memorandum of understanding before forming an Opinion. For Discussion please comment below. Also note that this budget is subject to Parliament approval before it becomes an Act.

Tags : Budget 2020 , Income Tax, Union Budget 2020, GST, slab rates, Income Tax Deduction


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