HAVE YOU READ THE BUDGET IN BETWEEN THE LINES?

BUDGET 2020 CAPSULE – 4

HAVE YOU READ THE BUDGET IN BETWEEN THE LINES?

1)   The ‘New Tax Regime’ has been introduced with the reduced rates of taxes. However, one need to forego certain deductions/exemptions to opt for the New Tax Regime. The motto of the new regime is to simplify the Income Tax Compliance of individual/HUF taxpayers but in fact, it has further created confusion among the taxpayers. The optional scheme forces one to Compute the Income Tax liabilities both in New Tax Regime and Old Tax Regime.   

2)   Dividend Distribution Taxes (DDT) has been abolished. Now, Companies are not required to pay DDT. However, the Dividend exempted u/s 10(34) in the hands of a receiver (i.e the investor) is taxed now. Earlier, Government could collect 20.56% (Including Cess and Surcharge) for every Rupee of Dividend declared. But now Government can collect up to 42.74% depending upon an assessee’s Total Income.

3)   The due date for filing the Income Tax Returns for certain classes of assesses who were required to file it before 30^th September has been extended to 31^st October, but at the same time due date for filing the Tax Audit Return is unchanged thereby forcing to file ITR also on or before 30^th September only.

4)   The tax audit limit has been increased to Rupees Five Crores from existing Rupees One Crores for certain classes of assessees having volume of transactions in banking modes not less than 95% of total transactions. But, at the same time madates Individual/HUF to Comply with TDS Provisions if Turnover exceeds Rupees One Crores irrespective of Tax audit is done or not.

5)   The Budget has given tax holiday to real estate companies but removed the deduction for repayment of Housing loan and interest thereof by individuals and HUFs. So, what’s the point in promoting the Companies when the ultimate customers are discouraged? Is not it like teaching a man fishing in an empty pond?

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Sanjay R Shetty

Chartered Accountant