Budget Highlights of 2020-21

Budget Highlights of 2020-21

  • Slab Rate Comparison:

    Earlier F.Y. 2020-21
    Upto 2.50 lakh NIL Upto 2.50 lakh NIL
    2.5 to 5 lakh 5% 2.5 to 5 lakh 5%
    5 to 7.50 lakh 20% 5 to 7.50 lakh l0%
    7.5 to 10 lakh 7.5 to 10 lakh 15%
    10 to 12.50 lakh 30% 10 to 12.50 lakh 20%
    12.5 to 15 lakh 12.5 to 15 lakh 25%
    above 15 lakh above 15 lakh 30%

    *New slab rates are optional.

    *No deductions available under the new scheme.

    *No tax if total  income is below 5 Lakh

    Note: In short viability of selecting the scheme depends upon the amount of deductions available to the assessee.

  • Housing loan Interest:

    Additional deduction of interest on housing loan upto Rs. 1.5 lakh taken for property having stamp duty value below Rs. 45 lakh will be available for loans sanctioned in financial year 2020-21

  • Affordable Housing:

    The deadline for promoters to get the project approved to avail 100% tax deduction on profits from affordable housing projects has been extended till 31st March 2021.

  • Start-up Tax Holiday:

    The earlier turnover limit for start-ups to avail tax holiday has been raised from Rs. 25 crore to Rs. 100 crore.

  • Vivad se Vishwas:

    The new scheme proposed to close all pending appeals in direct tax. The benefit is:

    -If liability discharged upto  31st  March  2020: 100% exemption in penalty and interest.

    -If paid upto 30th June 2020: Partial exemption of interest and penalty as will be specified further.

  • Tax-audit  limit:

    The threshold limit of turnover for tax-audit is raised to Rs. 5 crore from Rs. 1 crore provided that  95% of transactions(both sales and expenses) are being done through banking channel i.e. cash transactions should not exceed 5%.

  • Other Highlights:

  1. Tax rate for Cooperative Societies decreased to 22% from 30%. However no exemptions will be available.
  2. Reduced Corporate tax rate of 15%  will be applicable for newly established manufacturing and power generating units.
  3. Due date for Tax audit and filing of ITR for assesse whose books are required to be audited will be 31st October instead of 30th September.
  4. Taxability of Dividend Shifted to receiver i.e. Dividend distribution Tax is removed.
  5. Difference in stamp duty valuation and actual sale consideration on sale and purchase of property is allowed upto 10% instead of 5%.


38th GST Council Meeting Highlights

38th GST Council Meeting Highlights

1. Due dates extended for GSTR-9 and GSTR-9C for FY 2017-18 till 31 January 2020

The due date of GSTR-9 and GSTR-9C are extended further till 31 January 2020 from the earlier date of 31 December 2019. It was done to allow more time for taxpayers to use the offline tool of GSTR-9C that is expected to be made available on 21 December 2019.

2. Provisional ITC claim in GSTR-3B further restricted:

The amount of ITC availed on a provisional basis restricted to 10% from the earlier 20%, where invoices or debit notes are not reflected in GSTR-2A. Hence, invoice matching must be frequently done and vendor communication becomes challenging.

3. Late fee waiver on GSTR-1 through amnesty scheme:

Waiver of late fee for GSTR-1 for tax periods between Jul 17 and Nov 19, if filed by 10 January 2020. If the taxpayer does not still file for more than two consecutive tax periods, then e-way bills of such taxpayer will be blocked from generation.

4. Standard Operating Procedure (SOP) in case of non filing of GSTR-3B defined for taxman:

The SOP is to be released for the benefit of tax officers about actions taken for non-filing of GSTR-3B. These will help in blocking or reversal of fake ITC availed.

5. Due dates for GST returns extended for certain category of taxpayers

The due date extension for GST returns for some North Eastern States (November 2019) to be extended till 31 Dec 2019.

6. The GST Council decided to levy 28% tax on all lotteries

– Opts for voting to conclude the matter

– Date of applicability is 1 March 2020

– Prior, GST rates on lottery schemes were as follows:

1. State-owned – 12%

2. State-authorised – 28%

7. GST Rate rationalised to remove inverted tax structure

The GST Council imposes a uniform rate of 18% from earlier 12% on bags belonging to HSN code 3923/6305 from 1 January 2020 (woven and non-woven bags and sacks of polythene or polypropylene strips or the like , whether or not laminated, of a kind used for packing of goods including FIBC). It effectively removes the inverted tax structure.

8. GST exemption for the industrial land developers:

Supply should be a long-term lease of an industrial or financial infrastructure plots. The Central or State Government holds 20% or more shares in the developer’s capital from the earlier share of atleast 50%. Exemption to apply from 1 January 2020.

9. Other Decisions:

Amendments to the GST law to be taken up in the Union Budget 2020-21. Several thoughts deliberated on GST revenue augmentation. Grievance Redressal Committees (GRC) will be constituted at Zonal/State level to address grievances of specific/ general nature of taxpayers.

Budget 2019: Income tax exemption limit likely to be increased to Rs 5 lakh

Budget 2019: Income tax exemption limit likely to be increased to Rs 5 lakh

Jaitley may double the income tax exemption threshold for the salaried from Rs 2.5 lakh currently to Rs 5 lakh and reinstate tax-free status for medical expenses and transport allowance.

With less than three weeks to go for Finance Minister Arun Jaitley’s Budget 2019 speech, speculation is rife on what he may end up offering Indians just months ahead of the general elections. The wish list of the common man as well as industry chambers includes income tax sops, and the buzz is that the government is likely to give in.

No GST upto Rs 40 lakh, big relief for you before elections

No GST upto Rs 40 lakh, big relief for you before elections

New Delhi, Jan 10: The sops and reliefs continue before the 2019 elections.In a bid to give relief to small businesses and MSMEs the GST Council Thursday doubled the exemption limit and raised the threshold for availing the composition scheme.

The exemption threshold for small businesses was increased to Rs 20 lakh to Rs 40 lakh and also allowed Kerala to impose a natural disaster cess of upto 1 per cent for a period of upto two years.

Till now, businesses with turnover up to Rs 20 lakh were exempt from paying Goods and Services Tax (GST).

Announcing the decisions after the GST Council meeting here, Finance Minister Arun Jaitley also ruled out any further cuts in tax rates and said “reductions will be made only when revenues move up”.

He said while under original GST structure, it was envisaged for those with turnover upto 20 lakh to get exemption, the threshold for some northeastern and hill states was kept at Rs 10 lakh.

“We have decided to continue with the twin structure with two slabs. While the Rs 20 lakh threshold has been doubled to Rs 40 lakh, for smaller states, the exemption has been kept at Rs 20 lakh,” Jaitley said.

The scope of the GST Composition Scheme, under which small traders and businesses pay a small tax based on turnover rather than value addition, was raised to Rs 1.5 crore from Rs 1 crore.

The twin move would give relief to micro, small and medium enterprises (MSMEs), he said.

Jaitley said that the businesses under the scheme will now have to pay tax on a quarter-to-quarter basis. However, the returns will be filed annually. GST Council, headed by the finance minister, also approved composition scheme for the services sector.

Even before the decision, some states, including Jammu and Kashmir and Assam, had amended their laws to increase the Rs 10 lakh threshold to Rs 20 lakh.

Jaitley said the states with the new limit of Rs 20 lakh will have the option to “opt up” and states with Rs 40 lakh limit will have the option to “opt down” over concerns of erosion of assessee base.

He said while the decision would make over 20 lakh businesses eligible for exemption, all of them may not avail it in order to continue to enjoy benefits of GST like input tax credit.

On including real estate and lottery under the Goods and Services Tax, the council decided for form a seven-member group of ministers after differences of opinion emerged at the meeting, he said.News24 Bureau/ PTI

Startup India: Eligibility, Tax Exemptions and Incentives

Startup India: Eligibility, Tax Exemptions and Incentives

Prime Minister Narendra Modi proclaimed the Startup India campaign in 2016 to boost entrepreneurship in India. The action plan aimed at promoting bank financing for startups, simplifying the incorporation of startup process and grant of various tax exemptions and other benefits to startups.

But all the benefits and exemptions are available to the startups only if they come under the criteria of an ‘Eligible Startup’.

So first let’s understand the conditions to be met to qualify as an “Eligible Startup”

Eligibility for Startup India

As per the Startup India Action plan, the followings conditions must be fulfilled in order to be eligible as Startup :

  1. Being incorporated or registered in India for less than seven years and for biotechnology startups up to 10 years from its date of incorporation.
  2. Annual turnover not exceeding Rs 25 crores in any of the preceding financial years.
  3. Aims to work towards innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property.
  4. It is not formed by splitting up or reconstruction of a business already in existence.
  5. It must obtain certification from the Inter-Ministerial Board setup for such a purpose.
  6. It can be incorporated as a private limited company, registered partnership firm or a limited liability partnership.