Union Budget 2019-20 (F)

Improving Effectiveness of
Tax Administration

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S. 195(2) & S. 195(7): w.e.f.
Application by the payer, when 1-Nov-2019
payment to a non-resident is
not fully chargeable to tax in
India.

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Strengthening Anti-Abuse
Measures

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Taxation on Buyback w.e.f.
05-07-2019

Applicability of Sec 115QA is proposed to be
extended to all companies including
companies listed on recognised stock
exchange.

Note: Distributed income is taxed at 20%

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Tightening the noose on

Charitable Trust w.e.f. 1st Sep
2019
Proposed u/s 12AA:

At the time of granting Subsequently,
the registration, the
PCIT/ CIT shall satisfy violation of any
himself about the
compliance of the trust other laws which is
with any other laws material, the PCIT /
which is material. CIT may cancel the
registration by giving
an order in writing.

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Removing Difficulties
Faced By Tax Payers

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Ind-AS vis-à-vis IT Act w.e.f.
1st Apr 2020

Demerger benefit:
To match with Ind-AS, it has been proposed
that the resulting company may record the
assets and liabilities at a different value other
than book value

Currently

Proposed

Book Value Value as
per Ind-AS

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Extension of relief u/s 201 & 40(a)

Current:
In case of default in deducting tax on payment to
resident payee, if the payee considers such
payment in computation of his income and a
certificate to that effect is furnished, payer will
cease to be assessee in default.

Proposed:
The benefit is extended to non resident payees.

Accordingly, no consequential disallowance u/s 40(a)
on such payments.

w.e.f. 1st Sep
2019

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Assessment of modified return
filed - APA

Sec 92CD (3): No Fresh assessment
required in case of
In case where the modified return
Assessment/ Reassessment
has been completed and
modified return has been
filed by the assessee u/s
92CD (1), Assessing Officer
shall pass the order
modifying the total
income in accordance with
the APA.

Clarification on CbCR – S 286

Accounting year of the Alternate Reporting
Entity shall be the accounting year of the non –
resident parent entity.

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Clarification of Secondary
Adjustments

w.r.e.f 01-04-2018

Primary adjustment threshold of INR 1 Cr and
adjustment up to AY 16-17 are to be considered as
alternate conditions.

Interest to be calculated on the excess
money or part thereof.

To apply to agreements signed on or
after 01.04.2017

Proposed to allows excess money repatriation
from any of the NR AEs.

w.e.f 01-09-2019

No refund of taxes paid till date under
pre-amended section.

Option of additional tax of 18.5% + surcharge of
12% (over & above normal tax) on non-
repatriation on time in addition to existing
calculation of interest;

No secondary adjustment or interest if the
assessee pays the additional income-tax

No deduction of the amount on which such tax
has been paid shall be allowed under any other
provision of this Act

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Pass through of losses – AIF I & II

Set off and
carry forward

of Losses

Other than Business
business loss Losses

If Units held If Units held Business Trust
for > 12 for < 12
months months

Unit Holders Lapse

Losses accumulated till 31-Mar-2019 can be carried
forward by Unit holders

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Rationalization of
Provisions

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Excess of Sale
Consideration over FMV

FMV

Consideration

S. 56(2)(viib)

Sale Consideration received in excess of FMV on
issue of shares not charged as income of assessee
due to notification issued by CG is proposed to be
taxed in the year of default to comply with such
conditions. (w.e.f. AY 2020-21)

Rationalizing prosecution for EXISTING
non-filing of return within due date
PROPOSED
Tax Payable =
Tax on total income
Less: Advance Tax
Less: TDS

Threshold limit of tax payable = Rs. 3,000

Tax Payable =
Tax on total income
Less: Advance Tax
Less: TDS
Less: TCS
Less: Self- assessment Tax
Threshold limit of tax payable = Rs. 10,000

Section 276CC w.e.f AY 2020-21

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Miscellaneous

Sec. 92D (w.e.f 01-04-2020)

Constituent entity

should EVEN IF NO
international
Keep information and transaction is
documents and file undertaken
the required form
Proposed

Sec. 270A

Introduction of mechanism for
computing under reported income
and quantum of penalty for first time
return filers under section 148, from
AY 2017-18

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Bolstering tax recovery agreements with
foreign countries (S. 228A)

Assistance in Tax recovery
from resident assessee of
either countries (India or
foreign country), even if no
details of property of the
assessee is available on record

Security Transaction Tax on sale of an
Option (w.e.f. 01-09-2019)

OLD NEW
Settlement Price
Strike Price
Less: Settlement Price

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Undisclosed Income

Income Declaration Scheme,
2016 (the Scheme)

w.r.e.f. 01-06-2016

Central Government to provide second opportunity to
for payment of the tax, surcharge and penalty after
the expiry of due date prescribed earlier.

Levy of Interest @ 1% every month or part of a month
after the expiry of earlier prescribed due date.

Relaxation to tax payers by introduction of REFUND of
amount of tax, surcharge and penalty paid in excess

of the amount payable under the Scheme

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Prohibition of Benami
Property Transactions

Act, 1988

w.r.e.f 01-11-2016

No prior approval of Approving Authority shall
be required by Initiating Officer for conducting
any inquiry or investigation for proceedings
already initiated with prior approval.

w.e.f 01-09-2019

under within Attachment of
section the property
24(1) From the end of the and passing of
month of notice
Earlier - from the order
date of notice

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w.e.f 01-09-2019

Period of stay of proceedings to be
excluded for determining time limit
for passing of Order

Introduction of section 54A
Rs. 25,000 for failure to comply
with summons issued or furnishing
of information

Introduction of section 54B
Documents on record in the custody of an
authority to be admitted as evidence during
proceedings.

Amendment to section 55
No prosecution against a person for any
offence under the Act without prior
sanction of the competent authority.

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Black Money (Undisclosed
Foreign Income and

Assets) and Imposition of
Tax Act, 2015

Definition of Assessee to include:

Resident as defined by Income Tax Act, 1961

AND Proposed

Non-resident or not ordinarily resident who was

resident in India either in the previous year to which the

impugned income relates or undisclosed asset was

acquired w.r.e.f 01-07-2015

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E. Indirect Tax
highlights

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GST SIMPLIFIED

Automation Simplified Quarterly
of GST single return for
refund turnover of
monthly less than ₹5
Electronic return
invoice and crore.
no separate Ease of
e-way bill. compliance Annual
return &
Free
accounting Qtrly
software to payment by
Composition
small
businesses. dealers

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KEY CHANGES IN CGST ACT

Composition • Composition Scheme now
Scheme available for supplier of services or
mixed suppliers (not eligible for the
earlier composition scheme) having
an annual turnover of up to Rs 50
lakhs in preceding financial year
[section10]

Increase in • Exemption limit for a person
limit for exclusively engaged in supplier of
goods increased from 20 lakhs to
Registration 40 lakhs.

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• mandatory Aadhaar authentication for
specified class of existing/new taxpayers

Authenticate [section 25]

Charge of • charging interest only on the net cash tax
Interest liability [section 50]

E-cash • Facility to transfer an amount from one
ledger head to another head in the electronic
cash ledger [section 49].

Appellate • National Appellate Authority for advance
Authority ruling and procedures for filing of appeals
and rectifications of orders is constituted
and empowered at par with civil courts.

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DISPUTE RESOLUTION

➢ A Dispute resolution cum
amnesty scheme “Sabka
Vishwas Legacy Dispute
Resolution Scheme, 2019” is
being introduced for
resolution and settlement of
legacy cases of Central Excise
and Service Tax which are
subsumed by GST

➢Empowering the National
Anti-profiteering Authority to
impose penalty equivalent to
10% of the profiteered
amount [section171]

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CUSTOMS ACT

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CUSTOMS RATE RATIONALIZATION

Encouragement for domestic publishing and printing industry, by
imposing 5 % custom duty on imported books. Import of defence
equipment that are not being manufactured in India are being
exempted from the basic customs duty.

In order to provide domestic industry a level playing field, basic
customs duty is being increased on items such as cashew kernels,
PVC, Vinyl flooring, tiles, metal fittings, mountings for furniture,
auto parts, certain kinds of synthetic rubbers, marble slabs, optical
fibre cable, CCTV camera, IP camera, digital and network video
recorders etc.

Exemptions from custom duty on certain electronic items which
are now being manufactured in India are being withdrawn. Further,
end use based exemptions on palm stearin, fatty oils, and
exemptions to various kinds of papers are also being withdrawn.

Reduction of customs duty proposed on certain raw materials and
capital goods including CRGO sheets, amorphous alloy ribbon,
ethylene di-chloride, propylene oxide, cobalt matte, naphtha,
wool fibres, inputs for manufacture of artificial kidney and
disposable sterilised dialyser, and fuels for nuclear power plants
and on certain parts of electric vehicles and on capital goods
required for manufacture of specified electronic goods.

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Our Offices
• Chennai • Bengaluru • Dubai • Gurgaon • Hyderabad • Mumbai

• Coimbatore • Kochi • Madurai • Mangaluru • Vijayawada • Vizag

• Nellore

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