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In Tax GlimpsesUnionBudget2019 Noexp PDF
In Tax GlimpsesUnionBudget2019 Noexp PDF
In Tax GlimpsesUnionBudget2019 Noexp PDF
Gifts to non-residents
• It is proposed that gift of any sum of money or property situated in India, by a person resident in India to a person outside India (not being a
gift otherwise exempt), on or after 5 July 2019, shall be deemed to accrue or arise in India.
Benefit of section 35AD for mega investments in the sunrise and advanced technology areas
• Section 35AD allows deduction for whole of the capital expenditure incurred wholly and exclusively for specified businesses. To boost economic
growth and the Make in India initiative, a scheme will be launched to invite global companies to set up mega manufacturing plants in the
sunrise and advanced technology areas. Benefit of section 35AD will be extended to these companies.
• This benefit will be given for manufacturing in areas such as semi-conductor, fabrication (FAB), solar photovoltaic cells, lithium storage
batteries, solar electric charging infrastructure, computer servers, and laptops. The Finance Bill has however not proposed any change in
section 35AD.
Benefit to start-ups
• Start-ups and their investors who file requisite declarations and provide information in their returns will not be subject to any kind of scrutiny
in respect of valuations of share premiums.
• With e-verification for establishing identity of investors and source of funds, funds raised by start-ups will not require any kind of scrutiny
from the Income Tax Department.
• No inquiry or verification will be done in the pending assessments by assessing officers without obtaining supervisory approval.
• Fair market value of shares of a start-up issued to Category II AIFs will not need to be justified. At present, this benefit is available only to
Category I AIFs.
• Some of the conditions related to carry forward and set off of losses in case of start-ups proposed will be relaxed.
Demerger
• It is proposed to relax the definition of ‘demerger’ to allow the resulting company to record the value of the property and liabilities at a value
different from the book value in compliance with the Indian Accounting Standards.
Affordable housing
• Definition of affordable housing (section 80-IBA) proposed to be relaxed to align it with the GST Act.
Category II AIF
• Category II AIFs will be exempted from the provisions of section 56(2)(viib).
Faceless e-assessment
• A scheme of faceless assessment in electronic mode involving no human interface to be operationalised in a phased manner.
Digital payments
• TDS of 2 percent on cash withdrawal exceeding INR 1 crore in a year from a bank account to be levied.
• The business establishments with an annual turnover of more than INR 50 crore shall offer low-cost digital modes of payment (BHIM, UPI,
UPI-QR Code, etc.) to their customers.
• No charges or merchant discount rate shall be imposed on customers and merchants. Costs shall be absorbed by banks and RBI.
• It is proposed to clarify that once an advance pricing agreement (APA) has been signed and modified return is filed by the assessee, the
assessing officer needs to only modify the total income in accordance with the APA.
• It is proposed to simplify the provisions of secondary adjustment (in case of transfer pricing) by providing that instead of interest payment
every year, the assessee shall have an option to make one-time payment of tax of specified amount.
• It is proposed to clarify that master file needs to be filed even when there is no international transaction and that the assessing officer and
commissioner (appeals) do not have power to call for master file from the assessee.
• It is proposed to provide for rationalisation of the definition of “accounting year” for alternate reporting entity, which needs to file a country-
by-country report.
• Nominal Basic Excise Duty (BED) imposed on the following products to resolve the dispute pertaining to levy National Calamity Contingency
Duty (NCCD):
− Petroleum crude
− Various tobacco products
• Special Additional Excise Duty, and Road and Infrastructure Cess increased by INR 1 per litre each on petrol and diesel. The existing and
revised effective duty rates are mentioned below:
• Enhanced penalty and stringent prosecution provisions introduced under the Customs Act for specified offences, such as fraudulent availment
of undue concessions and export incentives
• Provisions introduced for the verification of identity or compliance through Aadhar to prevent smuggling and protect interests of revenue
• Basic customs duty (BCD) rates revised for the following products to give a push to the Make in India initiative or provide a level playing field
to domestic manufacturing:
Retrospective exemption granted to the following services for the respective periods:
• Taxable services provided by the state government for grant of liquor licence during the period 1 April 2016 to 30 June 2017
• Services provided by state government industrial development corporations or undertakings or entities with 50 percent or more ownership by
Government (either directly or indirectly) by way of granting developers a long-term lease of 30 years or more for plots for developing
infrastructure for financial business during the period 1 October 2013 to 30 June 2017 (only to the extent of upfront amount received)
• Services provided by Indian Institutes of Management to their students for specified educational programmes (except executive development
programme) during the period 1 July 2003 to 31 March 2016
The application for refund (for taxes collected/paid in the past) in the above-mentioned cases will need to be submitted within six months from
the date of enactment of the Finance Bill (No 2.) 2019.
• An option to pay GST under the composition scheme extended to suppliers of services or suppliers of both goods and services with an annual
turnover of up to INR 5 million in the previous FY
• Enabling provisions introduced to allow the Government to prescribe a higher threshold limit of up to INR 4 million (existing threshold is INR
2 million) at the request of any state or the recommendation of GST Council
• Aadhaar authentication made mandatory for all taxpayers except specified states or class of tax payers
• The Government may prescribe a class of registered persons who shall be mandatorily required to give an option to their recipients to make
payments through specified electronic modes
• Composition taxpayers to be allowed to furnish return on an annual basis along with quarterly payment of taxes
• The commissioner has been empowered to extend the due date for furnishing annual return (FORM GSTR-9/9A) and reconciliation statement
(FORM GSTR-9C) by tax payers, and monthly and annual statements by e-commerce operators
• A facility has been introduced to allow the registered person to transfer any amount of tax, interest, penalty, fee, from one head to another
head in the electronic cash ledger
• Interest shall be levied only on the net tax liability (i.e., net of input tax credit) in respect of supplies declared in the return where such
return is filed after the due date. Such relaxation shall not apply where returns are filed subsequent to initiation of any proceedings.
• The central government has been empowered to disburse the refund amount in respect of state taxes as well.
• National Appellate Authority for Advance Ruling will be constituted for hearing appeals against conflicting advance rulings pronounced on the
same question by the Appellate Authorities of two or more states in respect of matters pertaining to distinct persons. Such advance ruling
shall be binding on the applicants, all registered persons with the same PAN, the concerned officers or the jurisdictional officers of applicants,
and other registered persons with the same PAN
• National Anti-profiteering Authority has been empowered to impose penalty equivalent to 10% of the profiteered amount.
A dispute resolution cum amnesty scheme, “Sabka Vishwas Legacy Dispute Resolution Scheme, 2019”, has been introduced for resolution
and settlement of legacy cases of central excise, service tax, and certain other central levies/duties/taxes/cesses. The proposed scheme
provides relief in the following ways:
• Relief from 40−70 percent of tax dues, and waiver of interest and penalty for cases other than voluntary disclosure ones
• Waiver of interest and penalty on payment of full tax dues disclosed for voluntary disclosure cases
• No prosecution for the person discharged under the scheme
Securities law
• SEBI to consider increasing minimum public shareholding in listed companies from the current threshold of 25 percent to 35 percent
• Know Your Customer (KYC) norms for FPIs to be rationalised and streamlined
• Social stock exchange to be set-up under the regulatory ambit of SEBI for listing social enterprises and voluntary organizations
FDI
• FDI in aviation, media (animation, AVGC), and insurance sectors may be further relaxed
• 100 percent FDI to be permitted in insurance intermediaries
• Local sourcing norms to be eased for FDI in Single Brand Retail Trading (SBRT)
Others
• Model Tenancy Law to be finalised and circulated to the States for adoption
• Measures to be taken by the Government to eliminate delay in payments to MSME sector
• To consider issuing Aadhaar Card for NRIs with Indian Passports after their arrival in India without waiting for 180 days
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