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Proposed: lower 25% corporate tax on companies with Rs.400cr turnover

Proposed: lower 25% corporate tax on companies with Rs.400cr turnover

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PAN and Aadhaar interchangeable

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Finance and Corporate Affairs Minister Nirmala Sitharaman along with the Minister of State for Finance and Corporate Affairs, Anurag Singh Thakur arrives at Parliament House to present the Union Budget 2019-20 in New Delhi on 5 July  2019.

Finance Minister Nirmala Sitharama has proposed to extend the lower rate of 25% Corporate Tax to all companies with annual turnover up to Rs.400 crore which will cover 99.3% of business in India.

The proposal was made in the Union Budget 2019-20 in parliament on 5 July 2019,

Currently, this rate is only applicable to companies having annual turnover up to Rs.250 crore.

Sitharaman said: “This will cover 99.3% of the companies. Now only 0.7% of companies will remain outside this rate”.

PAN – Adhaar Interchangeability proposed

The Budget also proposes to make PAN and Aadhaar interchangeable and allow those who do not have PAN to file Income Tax Returns by simply quoting their Aadhaar number and also use it wherever they are required to quote PAN.

The Finance Minister said that more than 120 crore Indians now have Aadhaar and the proposal aims at ease and convenience of tax payers.

Pre-filling of Income-tax Returns

The Finance Minister said that pre-filled tax returns will be made available to taxpayers which will contain details of salary income, capital gains from securities, bank interests, and dividends etc. and tax deductions.

She further said that Information regarding these incomes will be collected from the concerned sources such as Banks, Stock exchanges, mutual funds, EPFO, State Registration Departments etc.

“This will not only significantly reduce the time taken to file a tax return but will also ensure accuracy of reporting of income and taxes,” the Minister added.

Faceless e-assessment to eliminate undesirable practices

Sitharaman said that the existing system of scrutiny assessments in the Income-tax Department involves a high level of personal interaction between the taxpayer and the Department, which leads to certain undesirable practices on the part of tax officials.

To eliminate such instances, she said that a scheme of faceless assessment in electronic mode involving no human interface is being launched this year in a phased manner.

To start with, such e-assessments shall be carried out in cases requiring verification of certain specified transactions or discrepancies, she added.

The Finance Minister further said that the cases selected for scrutiny shall be allocated to assessment units in a random manner and notices shall be issued electronically by a Central Cell, without disclosing the name, designation or location of the Assessing Officer.

“The Central Cell shall be the single point of contact between the taxpayer and the Department. This new scheme of assessment will represent a paradigm shift in the functioning of the Income Tax Department”, she said in her speech.

Slew of Measures to Encourage Digital Payments

The Budget also proposes to levy TDS (tax deducted at source) of 2% on cash withdrawal exceeding Rs.1 crore in a year from a bank account. This is in continuation of a number of initiatives taken in the recent past for the promotion of digital payments and less cash economy, and to promote digital payments further, said the Minister.

The low-cost digital modes of payment such as BHIM UPI, UPI-QR Code, Aadhaar Pay, certain Debit cards, NEFT and RTGS will promote less cash economy.

She proposed that the business establishments with annual turnover more than Rs.50 crore shall offer such low-cost digital modes of payment to their customers and no charges or Merchant Discount Rate (MDR) shall be imposed on customers as well as merchants.

“RBI and Banks will absorb these costs from the savings that will accrue to them on account of handling less cash as people move to these digital modes of payment,” said Sitharaman.

Simplification and Ease of Living

Noting that India’s Ease of Doing Business ranking under the category of ‘paying taxes’ showed a significant jump from 172 in 2017 to 121 in the 2019, the Finance Minister said above measures will leverage technology to make compliance easier for the taxpayers.

The Budget also proposes to simplify the tax law to reduce genuine hardships to taxpayers which include enhancing threshold of tax for launching prosecution for non-filing of returns from Rs.3,000 to Rs.10,000, for proceeding against a person and exempting appropriate class of persons from the anti-abuse provisions of section 50CA and section 56 of the Income Tax Act. fiinews.com

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