Analysis of Finance Bill 2019

S NO. MAIN CONTENTS BRIEF
1 Custom duty has been increased on gold, silver and other precious metals The custom duty has been increased on gold, silver and other precious metals from the existing 10 percent to 12.5 percent.
2 A new coin series A new coin series of coins for Re.1, Rs.2 Rs.5, Rs.10, Rs.20 to be launched soon.
3 Petrol and diesel may be costlier Petrol and diesel may be costlier by Re 1 as special additional excise duty of Rs.1/ liter has been imposed on petrol and diesel.
4 Pradhan Mantri Karam Yogi Maandhan Scheme to extend the scope of pension. A new Scheme namely Pradhan Mantri Karam Yogi Maandhan Scheme is launched to extend the benefit of pension to about three crore retail traders & small shopkeepers whose annual turnover is less than `1.5 crore
5 Aadhaar and PAN cards interchangeable Finance Minister proposes to make Aadhaar and PAN cards interchangeable for the purpose of filing Income Tax Returns
6 Pre-filled tax returns 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 to reduce the time taken to file a tax return & ensure accuracy of reporting of income and taxes.
7 Faceless assessment scheme Faceless assessment scheme in electronic mode involving no human interface is being launched this year in a phased manner.
8 Electronic invoice system Proposed to move to an electronic invoice system would begin from January, 2020 wherein invoice details will be captured in a central system at the time of issuance to prefill the taxpayer’s returns. Electronic invoice system will significantly reduce the compliance burden such as separate e-way bill.
9 Legacy Dispute Resolution Scheme Legacy Dispute Resolution Scheme has been proposed that will allow quick closure of pending litigations of GST.
10 80CCD (2) - Deduction for contribution by category of employer. Employer contribution u/s 80CCD (2) has been bifurcated into the two categories (1) Contribution made by central govt. shall be allowed up to 14% of salary (2) Contribution made by other employer shall be allowed up to 10% of salary
11 Enhanced interest deduction for affordable housing loan. New section 80EEA has been inserted with effect from the 1st day of April, 2020 by which a deduction not exceed Rs.150000 shall be allowed from gross total income of the assessee for interest payable on loan taken by him from any financial institution for the purpose of acquisition of a residential house property subject certain conditions.
12 Deduction for interest on loan for electric vehicle New section 80EEB has been inserted with effect from the 1st day of April, 2020 by which a deduction not exceed Rs.150000 shall be allowed from gross total income of the assessee for interest payable on loan taken by him from any financial institution for the purpose of purchase of an electric vehicle.
13 5% TDS on any sum pay not falling under section 194C & 194J New section 194M has been introduced by which any individual or a HUF responsible for paying any sum to any resident for carrying out any work (not covered under section 194C & 194J) in pursuance of a contract or by way of fees for professional services during the financial year shall earlier of credit or payment in any mode deduct an amount @ 5% as income tax thereon.
14 2% TDS by bank, post office & co-operative society on cash withdrawal over 1 crore. New section 194N has been introduced to discourage the practice of making business payments in cash the government proposes to levy TDS of 2% deductible by A banking company, a co-operative society or a post office on cash withdrawal exceeding Rs.1 crore in a year from an account.
15 Surcharge Increased by 25%, 37% on Income Tax to increase effective tax rate. New surcharge rates has been introduced by which every individual or Hindu undivided family or association of persons or body of individuals, whether incorporated or not, or every artificial juridical person shall pay surcharge @ 25% of income tax if, total income exceeding two crore rupees but not exceeding 2 crore rupees and 37% of income tax if, total income exceeding 5 crore rupees.
16 Threshold for applicability of lower corporate tax rate of 25% increased from Rs.250 crore to Rs.400 crore. Corporate tax rate reduced to 25% for the companies having annual turnover up to ` 400 crore from 30%. Previous it was applicable on those company having annual turnover up to ` 250 crore.
17 Increase minimum public shareholding in the listed companies Proposed to increase minimum public shareholding in the listed companies by asking SEBI to consider raising the current threshold of 25% to 35%
18 New KYC for foreign investor. New KYC norms for FPIs to make it more investor friendly without compromising the integrity of cross-border capital flows.
19 Aadhaar for NRI NRI having Indian passport shall allow to have Aadhaar.
20 Proposed to setup National Research Foundation (NRF) National Research Foundation (NRF) has been Proposed to setup for monitoring, controlling and funding the research programs throughout the Nation
21 Loans up to `1 crore for MSMEs within 59 minutes. For ease of access to credit for MSMEs, Government has introduced providing of loans up to `1 crore for MSMEs within 59 minutes through a dedicated online portal
22 No charge or MDR on specified digital mode of payments 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 shall be imposed on customers as well as merchants. RBI and Banks will absorb these costs from the savings.

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