New Delhi: Call it a major relief, Union Minister Nirmala Sitharaman today announced a slew of reforms in GST that included allowing taxpayers with annual turnover of less than Rs 5 crore to file only quarterly GST returns.
Tabling the first Budget of the Modi-led government after assuming office for a second term, the Union Minister said a lot of reforms have been initiated in GST.
“Those having annual income up to Rs 5 lakh are not required to pay any income-tax. We are thankful to taxpayers who play an important role in nation-building. Income-tax increases by 3 per cent for those earning between Rs 2-5 crore and 7 per cent for those with income above Rs 5 crore,” the Minister said.
She further announced to levy TDS of 2 per cent on cash withdrawal exceeding Rs 1 crore in a year from a bank account to discourage cash transactions for business deals.
CORPORATE TAX RELIEF
“All companies having annual turnover of Rs 400 crore, will now be under the bracket of 25 per cent. Earlier, lower corporate tax rate of 25 per cent was applicable only to companies with annual turnover up to Rs 250 crore. This will cover 99.3 per cent of all the companies. 0.7 percent companies will remain outside of this rate,” said the Finance Minister.
DIGITAL PAYMENTS
Amidst thumping of desks by MPs in Parliament, Nirmala Sitharaman announced that the scheme of faceless assessment without manual intervention will be launched in a phased manner. In order to discourage business payment in cash, she said a levy of TDS at source of 2 per cent for cash withdrawals exceeding Rs 1 crore from a bank account would be introduced. Those business establishments with annual turnover of over Rs 50 crore will give digital payment to customers and no charges on MDR on business and customers would be levied, she added.
ALL ABOUT AADHAAR & PAN
The Union Minister proposed a series of measures to leverage technology and make compliance easier for taxpayers. She announced interchangeability of PAN and Aadhaar. “Now you can file IT returns with Aadhaar as PAN-Aadhaar interchange is to be allowed,” she said. Pre-filled tax returns will be available for taxpayers with details of tax deductions, bank deposits, information collected from various sources.
ANGEL TAX
Funds raised by startups will not face any scrutiny by the Income-Tax Department, said Nirmala Sitharaman. “A mechanism will be set up for this verification of investors and companies. CBDT will set up mechanism to alleviate issues with pending cases regarding angel tax.”
She added, “Startups and investors who file information in returns will not have to go through scrutiny, mechanism of e-verification to be introduced.”
SETS DISINVESTMENT TARGET
The government has increased disinvestment target to over Rs 1 lakh crore for the current financial year, Finance Minister Nirmala Sitharaman said. In February this year, the government, presenting the Interim Budget 2019-20, had pegged THE disinvestment target of Rs 90,000 crore. Strategic disinvestment of select public sector undertakings will remain a priority area, she said. The government proposes to enhance the disinvestment target to Rs 1.05 lakh crore for the current financial year, she said.
PETROL, GOLD TO COST MORE
Nirmala Sitharaman today announced that import duty on gold and other precious metals increased from 10 per cent to 12.5 per cent. She also said special additional excise duty of Rs 1 per litre to be levied on petrol and diesel for road and infra. This would mean a rise in the price of gold and petrol.
AFFORDABLE HOUSING
The government will build 1.95 crore houses under the Pradhan Mantri Awas Yojna (PMAY) – Gramin over the next two years. The Union Minister said the time taken to complete construction of houses under PMAY is reduced to 114 days from 314 days in 2015-16 due to use of direct benefit transfer (DBT) platform.
In the second phase of PMAY-Gramin, 1.95 crore houses will be provided to eligible beneficiaries, from 2019-20 to 2021-22. These houses will have amenities such as LPG, electricity and toilets, she said.
The Minister further said by 2022, every single rural family, except those who are unwilling to take the connection, will have an electricity and a clean cooking facility.
For home-buyers, period of exemption for capital gains arising from sale of house for investment in startups is to be extended to 31 March 2021. After various tax benefits and tax deductions, their net gain would be Rs 7 lakh when they eventually end up paying their loan.