Direct Taxation (Income Tax)
· The government has proposed a new income tax regime under Section 115BAC that comprises a significant change in the tax slabs rates. Taxpayers have been provided with an option whether they want to pay taxes according to the new regime or if they want to continue paying taxes according to the existing regime. However, a few taxpayers may not be able to switch back to the existing tax slab once they opt to follow the new one.
· Under section 194J- fees for technical services, TDS has been reduced to 2% from 10%.
· Tax audit threshold has been increased from Rs 1 crore to Rs 5 crore provided turnover/ gross receipts in cash does not exceed 5% during the previous year. Also, payment made in the P.Y in cash does not exceed 5%. For such taxpayers, the due date for tax audit has been extended to the 31st of October from the 30th of September.
· Under Section 80EEA, the additional deduction of Rs.1.5 lakh for interest paid on home loans will now be allowed for the loans sanctioned till the 31st of March 2021.
· DDT has been discontinued. Instead, the recipients of the dividend will have to pay tax at their applicable rate.
· In the case of startups, employees possessing Employee Stock Option Plans (ESOPs) may defer paying taxes up to five years from the time of exercise, till the time they leave the startup, or until they sell their shares, whichever is earlier.
· Eligible startups with a turnover of up to Rs 25 crore is permitted to deduct 100% of its profits for three continuous assessment years of seven years if the overall turnover is under Rs 25 crore. This limit is now increased to Rs 100 crore. Furthermore, the eligibility period to deduct is increased to 10 years from 7 years.
· Section 194: Dividend paid by Indian companies, to a shareholder, who is resident in India, TDS @ 10% if the dividend amount exceeds 5000 during the FY.
· Section 194K: Dividend paid by MF to a resident TDS 10% will be deducted only if the dividend amount exceeds 5000 during the FY
· Section 194: Dividend on shares paid by company exceeding Rs 5000 will be subject to TDS @ 10%
· Section 194-O: Any payment made by e-commerce operator to the participant, the operator will have to deduct 1% TDS only if the annual amount paid or credited exceeds Rs 5 lakh.
· Section 206AA: in relation to 194O has been amended to 5% instead of 20% in case of not furnishing the PAN.
· Change in residential status: (Section 6)
· Section 234G (insertion of new section) relating to payment of fee of Rs 200 per day for default in furnishing statement or certificate under section 35 by research association, university, college, company or any other institution.
· Section 43CA, if value adopted for the purpose of stamp duty does not exceed 110% of the actual consideration received, then consideration so received shall be deemed to be the full value of the consideration for computing profits and gains on transfer of such asset other than capital assets. Before the amendment it was 105% instead of 110%.
· Section 50C, in case of transfer of capital asset being land or building or both, if value adopted for the purpose of stamp duty does not exceed 110% of the actual consideration received, then consideration so received shall be deemed to be the full value of consideration for computing capital gains on transfer of such capital assets.Before the amendment it was 105% instead of 110%.
Indirect Taxation (GST, Customs)
· The person involved/benefited out of fake ITC shall also be liable for a penalty of 100% of the tax involved.
· Composition scheme restricted to taxpayers making the inter-state supply of service, supplies not leviable to GST and supplies through e-commerce operator where TCS is deductible.
· The date of the debit note will be standalone considered for availing input tax credit, delinked from the date of invoice.
· The retrospective effect has been given for transition provisions from 01st July 2017, to nullify the decision of Gujarat High Court in case of Siddhartha Enterprises.
· Powers provided to notify the form of TDS certificate and late fee (200 per day, maximum of 5,000) for non-issuance of TDS certificate has been waived off.
· A provision inserted for cancellation of voluntary GST registration for distinct persons.
· Power to condone the delay in applying for revocation of cancellation has been provided to the additional commissioner and commissioner for a period of 30 days.
· Refund due to Inverted tax prevalent for tobacco products is barred with a retrospective effect from 1st July 2017.
· Applicability of 6% CGST rate (total of 12% IGST rate) for the supply of pulley, wheels and products used in Agri machinery between 1st July 2017 to 31st December 2018.
· Ladakh has been included in the definition of Union Territory. J&K will have its appellate tribunal.
· The law has been amended to extend the imprisonment to the person 'who causes to commit' and 'person retaining the benefit'. Earlier the punishment is restricted to the person committed. This punishment is restricted to the person fraudulently availing ITC without an eligible invoice. Accordingly, these offences will be congnizable and non-bailable.
· Supply of fishmeal provided a retrospective GST exemption from 1st July 2017 to 30th September 2019.
· Provision to issue the removal of difficulty order by CBIC extended from earlier three-year limit to five years w.e.f 1st July 2017.
· Order for determining expense in special audit will not require the Board's approval.
· Provision to extend the time limit to return the inputs and capital goods from job worker.
· Powers provided to notify the time and manner of issuing an invoice for a specific category of supplies or services.
· The entry in Schedule II to the CGST Act on 'Transfer of business assets' will now exclude transactions done without consideration from it.
Steps proposed by the government for the MSMEs:
· Amendments will be made to Factor Regulation Act, 2011.
· Amendments to be made to enable NBFCs to extend invoice financing to MSMEs.
· Provision of subordinated debt for MSMEs by Banks which is guaranteed by Credit Guarantee Trust. The debt will count as quasi-equity.
· App-based financing loans will be introduced for MSMEsApp-based invoice financing loans product to be launched, to obviate the problem of delayed payments and cash flow mismatches for MSMEs.
Public sector banks (PSBs):
· Robust mechanism is in place to monitor and ensure health of all scheduled commercial banks and depositors' money is absolutely safe.
· The government aims to double farmers' income by 2022
· Help 15 lakh farmers solarise their grid-connected pump sets
· "KisanRail" and "KrishiUdaan" for seamless transport of perishable farm goods
· Increasing coverage of artificial insemination to 70%
· Raise fishery exports to Rs 1 lakh crore by 2024-25
· About 150 higher educational institutions will start apprenticeship embedded courses
· Special bridge courses to improve skill sets of those seeking employment abroad
· Ind-SAT to be conducted in Africa and Asia under study in India programme
· Allocation of Rs 99,300 crore for the educational sector in 2020-21
· Allocation of Rs 3,000 crore for skill development
· Deposit Insurance Coverage to increase from Rs 1 lakh to Rs 5 lakh per depositor
· Eligibility limit for NBFCs for debt recovery under SARFAESI Act proposed to be reduced to asset size of Rs 100 crore or loan size of Rs 50 lakh
· Separation of NPS Trust for government employees from PFRDAI
· Proposal to sell balance holding of government in IDBI Bank
Water, Wellness, and Sanitation Goals
· More than 20, 000 empanelled hospitals under PM Jan Arogya Yojana
· "TB Harega Desh Jeetega" campaign launched to end TB by 2025
· Expansion of Jan AushadhiKendra Scheme to all districts by 2024
· Focus on liquid and greywater management along with waste management