InvestorQ : How are personal and other direct taxes impacted by the Union Budget 2019
Deepa Salunkhe made post

How are personal and other direct taxes impacted by the Union Budget 2019

Juvina Maggie answered.
3 years ago

There are some interesting shifts for the direct taxes although the broad rates of tax have not been tampered with. Here are some takeaways.

· Limited corporate tax rates reduction only to companies with turnover up to Rs.400 crore is a disappointment. It was anticipated that the budget will move towards 25% corporate tax rates across the board but that was not to be.

· The buyback loophole was plugged. Buy backs were leading to a tax arbitrage as these did not attract dividend distribution tax. Now buybacks will also be taxed at 20%.

· Incomes up to Rs.5 lakh remains tax free. Interim budget had offered this as a rebate of Rs.12,500 under Section 87. There is no change in the status quo.

· Budget has offered enhanced tax exemption of Rs.3.50 lakhs where the value of the affordable housing property falls below Rs.45 lakhs.

· TDS of 2% will be charged on any cash withdrawal from a bank exceeding Rs.1 crore in a fiscal year with the aim of promoting more digital transactions in the economy.

· Surcharge on high income groups goes up. Persons earning between Rs.2 crore to Rs.5 crore will pay 18% surcharge and those earning above Rs.5 crore pay surcharges of 25%.

· Faceless assessment assured up to a threshold of income taxes so that the chances of misuse of position and hounding are totally eliminated.

· You can file your returns with Aadhar without PAN since the budget has made PAN and Aadhar interchangeable. You can file income tax returns and also make high value purchases purely on the back of your Aadhar card.