RECENT INCOME TAX AMENDMENTS FOR THE A.Y 2020-21 & 2021-2022

The Interim Union Budget was presented by the acting Finance Minister Piyush Goyal on 1st February 2019. The full Union Budget 2019 was presented by Finance Minister, Nirmala Sitharaman on 5 July 2019. On 25 November 2019, the Taxation Laws (Amendment) Bill, 2019 (Bill) was introduced in the Lok Sabha.

On the second Union budget, drastic changes in Income Tax has been taken place. In this article, only a few amendments have been explained which has changed the Income Tax in a big way.

Majorly applicable from AY 21-22 & SOME APPLICABLE FROM AY 20-21. Some changes are so drastic steps that this will change the Income-tax completely like an option for New vs. old in personal taxation and the same way new rates for Corporate.

Changes applicable for the assessment year 2020-21

1. Business and Profession:

Motor cars acquired on or after 23rd August 2019 but before 31st March 2020 is now depreciated at 30% and the enhanced rate of Depreciation is 30% for use of car other than hiring business only and for hiring business it is @ 45%.

2. Tax Audit:

Relaxation from Tax Audit upto 5 crores, for those having TOTAL CASH EXPOSURE less than 5% of TOTAL receipts & payments.

Date of filing of audited return -31-10including partners of firms having Tax Audit. And TAR upload by 30-9 for AY 20-21, the date of uploading TAR is 31-10-2020 & the date of filling of TAR ITR is 30-11-2020.

3. House Property:

A person can claim two properties as self-occupied house properties subject to certain conditions. its Annual value is NIL.

So Interest under section 24(b) to remain 2 lac max. . Even if you claim 2 houses as Self Occupied.

4. Capital Gain:

Section 54 – Assessee may buy 2 houses (earlier one) When LTCG below 2 cr to save Tax on LTCG of House sold. This option available only once in a lifetime.

5. Personal Taxation:

Rebate 12500 instead 2500 till income 5 lakhs.

6. Salary:

Salary Standard deduction Rs 50000 (Earlier Rs 40000)

7. Return Filing:

Mandatory Return filling for cash withdrawal, Foreign travel exp, Electric bill consumption over certain limits irrespective of their Total income is less/more than 2.5 lakhs.

8. Corporate Taxation:

• The corporate tax rates to 22% for existing domestic companies and 15% for new domestic manufacturing companies.
• The company cannot carry forward and set off their unutilized MAT credit. Deductions/Exemptions not available to Companies Opts for 115BAA or 115BAB.
• MAT at 15% (EARLIER 18.5%)

Changes for the Assessment year 2021-2022:

1. Tax deducted at Source/Tax Collected at Source:

• CS @0.1% on SALE over 50 lac seller should collect TCS from buyers of total amt from sale in a year crossed 50 lac. Applicable to the seller whose Turnover more than 10 crores.
• TDS on cash withdrawal under Section 194N-The payer will have to deduct TDS at the rate of 2% on the cash payments/withdrawals of more than Rs 1 crore in a financial year under Section 194N.
• In case the individual receiving the money has not filed an income tax return for three years immediately preceding the year, then the TDS is 2% on the cash payments/withdrawals of more than Rs 20 lakh and up to Rs 1 crore, and 5% for withdrawal exceeding Rs 1 crore.
• TDS+TCS applicability for those who are crossing 1cr TO or 50lac receipts. (Earlier it was Audit wise).
• TDS over 5000 at 10% by the company for the payment of Dividend

2. Salary:

NPS+SAF+ PF anything in excess of 7.5 lac contributed by Employer will be taxable as perquisites in hands of employee

3. Personal Taxation:

• Section 115BAC – Other than B&P income, Each year option for a new rate.
• 5% 10% 15% 20% 30% without claiming Deductions exemption. for diff slabs
• For B&P income, once chosen new rate option then Lifetime, he must continue with new rates unless until he doesn’t have B&P income

4. Other Sources:

Where any person receives any immovable property for inadequate consideration, the stamp duty value of such property as exceeds such consideration, if the difference is more than the higher of the following amounts:

(i) the amount of fifty thousand rupees; and

(ii) the amount equal to 10% of the consideration (earlier 5%)

The excess differential amount will be taxable in the hands of the receiver.

5. Capital Gain:

For indexation of property value, the Stamp Duty Value of 01-04-2001 is to be considered. not FMV as on 01-04-2001

now 10% Variation allowed for Stamp Duty Value And Sale price. Earlier it was 5%