Budget 2020 has proposed to introduce new income tax slabs with reduced rates for those foregoing exemptions and deductions under a "simplified tax regime". This new system is optional and will co-exist with the old one with three slabs and various exemptions and deductions available to the taxpayer.
As per the budget proposals, if a taxpayer opts for the new regime, then his income will be taxed as per the following tax slabs:
Individuals having net taxable income of up to Rs 5 lakh will be able to avail tax rebate of Rs 12,500 under section 87A in both, the existing and new, tax regimes. Effectively, this would mean that individual taxpayers having net taxable income of up to Rs 5 lakh will continue to pay zero tax.
However, individuals opting for the new tax regime would not be able to avail common tax breaks such deductions under section 80C for maximum of Rs 1.5 lakh by investing in specified instruments,
On the other hand, individuals opting for the existing tax regime will continue to pay tax on their income in FY 2020-21 same as FY 2019-20. These tax proposals will come into effect from April 1, 2020, once these are passed by the Parliament.
|
Existing Tax Slabs |
Rate of Tax |
|
Upto 2,50,000 |
0% |
|
From 2,50,001 to 5,00,000 |
5% |
|
From 5,00,001 to 10,00,000 |
20% |
|
Above 10,00,000 |
30% |
New Tax Slabs
|
Tax Slabs |
Rate of Tax |
|
Upto 2,50,000 |
0% |
|
From 2,50,001 to 5,00,000 |
5% |
|
From 5,00,001 to 7,50,000 |
10% |
|
From 7,50,001 to 10,00,000 |
15% |
|
From 10,00,001 to 12,50,000 |
20% |
|
From 12,50,001 to 15,00,000 |
25% |
|
Above 15,00,000 |
30% |
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Professional Tax was introduced in the year 1949. Professional Tax happens to be a source of revenue for the State Government.
PTRC and PTEC under professional tax. The PTRC and PTEC are different certificates that are required by a business entity operating in India.
PTEC permits to pay professional tax of business entity (i.e Private Limited company, Public limited company, Limited liability partnership) and also owner or professional (such as Partner, Director or Proprietor)
PTRC is to permit the employer (government or non-government) to deduct professional tax from the employee’s salary or wages and deposit the same to the respective state government. A fully functional business entity commonly requires both to conduct its business operations. Registration
Obtaining a PTEC registration is mandatory within 30 days from the date of incorporation or start of the business or practice. Income tax act, allows deduction of Professional tax paid to state government.
|
1. Legal Practitioners including Solicitor and Notaries; 2. Medical Practitioner including Medical Consultants and Dentists; 3. Technical and Professional Consultants, including Architects, Engineers, R.C.C. Consultants, Tax Consultants, Chartered Accountants, Actuaries and Management Consultants; 4. Chief Agents, Principal Agents, Insurance Agents and Surveyors and Loss Assessors registered or licensed under the Insurance Act 1938, I.T.I. Agents under U.T.I. Scheme, N.S.S. Agents under Postal Scheme; Commission Agents, Dalals and Brokers (other than estate brokers covered by any other entry elsewhere in this Schedule) 5. All types of Contractors (other than building contractors covered by any other entry elsewhere in this Schedule); and 6. Diamond dressers and diamond polishers, having not less than one year's standing in the profession. |
2500 per annum |
|
Directors (other than those nominated by Government) of Companies Registered under the Companies Act 1956 (1 of 1956) and Banking companies as defined in the Banking Regulation Act, 1949 (10 of 1949) Explanation: The term 'Directors' for the purpose of this entry will not include the person who are Directors of the Companies whose |
Rs.2500 per annum |
|
Dealers registered under the Maharashtra Value Added Tax Act, 2002 (Mah. IX of 2005) or Dealers registered only under the Central Sales Tax Act, 1956 (74 of 1956), whose annual turnover of sales or purchases-i.is Rupees 25 lakh or less Exceeds rupees 25 lakh |
Rs. 2000 per annum Rs 2500 per annum |
| Companies registered under the Companies Act, 2013 and engaged in any profession, trade or calling. |
Rs.2500 per annum |
|
Each Partner of a firm (whether registered or not under the Indian Partnership Act, 1932) engaged in any profession, trade or calling. |
Rs.2500 per annum |
|
Each Co-parcener (not being a minor) of a Hindu Undivided Family, which is engaged in any profession, trade or calling. |
Rs.2500 per annum |
|
Persons, other than those mentioned in any of the preceding entries who are engaged in any profession, trade calling or employment and in respect of whom a notification is issued under the second proviso to sub-section (2) of section 3. |
Rs.2500 per annum |
Rates and schedule of Professional tax - click here
1. In respect of Persons enrolled on or before the 31st May: Tax is to be paid before 30th June.
2. In respect of Persons enrolled after 31st May: Tax is to be paid within one month of the date of enrollment.
An interest of 1.25% pm shall be levied on delayed payments of Professional Tax.
A penalty of 10% shall be levied on the amount owed in case of delayed payment. Delay in obtaining the PTEC Certificate will be charged at Rs.2 per day.
Exemptions:
Following classes of persons are exempt from payment of professional tax:
1. Persons having completed the age of 65 years (w.e.f. 1-4-1995);
2. Partnership firms and HUFs (but each partner of a partnership firm and each coparcener of HUF are liable for enrollment, see Entries 19 & 20 in Schedule 1). Lump Sum Payment Scheme for PTEC Holder Persons:
There is a lump sum payment scheme for enrolled persons. The individual who pays Rs. 2,500 annually has an option to pay Rs. 10,000/- for five years.
The CBDT on Thursday extended the September 30, 2019 deadline by a month for filing of income tax returns (ITRs) for special cases requiring audit reports. The new deadline is October 31, 2019.
"On consideration of representations recd (received) from across the country, CBDT has decided to extend the due date for filing of ITRs & Tax Audit Reports from 30th Sep, 2019 to 31st of Oct, 2019 in respect of persons whose accounts are required to be audited," the CBDT said in a late night statement.
The Finance Ministry on Tuesday i.e. July 23, 2019 has hereby extended the due date for filing of Income Tax Return (ITR) for the FY 2018-19 by individuals from July 31, 2019 to August 31, 2019.
The extension was granted after the ministry received appeals from various Chartered Accountants and Tax Practioners for the extension of the due date for filing of Income Tax Returns for Individuals.
This year CBDT had extended the deadline for emoployers to file their TDS Returns i.e Form 24Q from May 31, 2019 to June 30, 2019 and therefore consequently the deadline for issuing Form 16 by the employer was also extended to July 31, 2019 from June 15, 2019. This was one the main reasons for the extension of the deadline for extension of ITR for individuals to August 31, 2019.
As per the Notification Issued by the Central Board of Direct Taxes (CBDT) on the 4th June 2019, the due date of filing TDS return (Form 24Q) by the Employer is extended from 31.05.2019 to 30.06.2019.
Consequently, the due date to issue of TDS Certificate (Form 16) has also been extended from 15.06.2019 to 10.07.2019.
Earlier the last date for filing of Form 24Q was May 31, which has now been extended till June 30. The extension was earlier provided only to the state of Odisha but now the last date for filing Form 24Q has been extended to all over the country.
Further, the income-tax return forms for AY 2019-20 were also amended by CBDT in line with the changes made in Form 24Q and Form 16. The move has been made to cross check the information provided by an employee in ITR forms with TDS return filed by his employer.
Click here to read the notification
The reporting under clause 30C and clause 44 of the Tax Audit Report was kept in abeyance till 31st March, 2019 vide Circular No. 6/2018 dated 17.08.2 018. After receiving representation the the implementation of reporting requirements under clause 30C (pertaining to General Anti-Avoidance Rules (GAAR) and clause 44 (pertaining to Goods and Services Tax (GST) compliance) of the Form No. 3CD has been deferred further till March 31, 2020.
The central government via notification dated March 31, 2019 has notified the date after which your PAN will become invalid if not linked to Aadhaar. As per the notification, the last date to link PAN with Aadhaar is September 30, 2019 and as per the rules if PAN is not linked with Aadhaar by this date, then PAN will become invalid.
Section 139AA of the Income Tax Act states that every person who has PAN as on July 1, 2017 is required to link his/her PAN with his/her Aadhaar number. If the PAN is not linked by Aadhaar by a date to be notified by the government then PAN would become invalid. This date has now been notified as September 30, 2019.
1. Nil tax on income upto Rs. 5 Lakhs.
2. The exemption limit of Rs. 5 lakh combined with deductions on savings available under Sector 80 will mean that people earning Rs 6.5 lakh may not be required to pay any Income Tax.
3. Standard Deduction of Rs. 50,000 has been allowed for salaried taxpayers.
4. TDS threshold on rental income raised to Rs. 2.4 Lakhs from Rs.1.8 Lakhs.
5. TDS threshold on interest on bank and post office deposits raised to Rs. 40,000 from Rs. 10,000.
a. Individual (resident or non-resident), who is of the age of less than 60 years on the last day of the relevant previous year:
|
Net income range |
Income-Tax rate |
|
Up to INR 2,50,000 |
Nil |
|
INR 2,50,000 to INR 5,00,000 |
5% |
|
INR 5,00,000 to INR 10,00,000 |
20% |
|
Above INR 10,00,000 |
30% |
b. Resident senior citizen, i.e., every individual, being a resident in India, who is of the age of 60 years or more but less than 80 years at any time during the previous year:
|
Net income range |
Income-Tax rate |
|
Up to INR 3,00,000 |
Nil |
|
INR 3,00,000 to INR 5,00,000 |
5% |
|
INR 5,00,000 to INR 10,00,000 |
20% |
|
Above INR 10,00,000 |
30% |
c. Resident super senior citizen, i.e., every individual, being a resident in India, who is of the age of 80 years or more at any time during the previous year:
|
Net income range |
Income-Tax rate |
|
Up to INR 5,00,000 |
Nil |
|
INR 5,00,000 INR 10,00,000 |
20% |
|
Above INR 10,00,000 |
30% |
Add: -
Surcharge: - 10% of income tax where total income exceeds Rs. 50,00,000.
15% of income tax where total income exceeds Rs. 1,00,00,000.
Health and Education cess: - 4% of income tax and surcharge.
Note: - A resident individual is entitled for rebate under section 87A if his total income does not exceed Rs. 5,00,000. The amount of rebate shall be 100% of income-tax or Rs. 12,500, whichever is less.
A partnership firm (including LLP) is taxable at 30%.
Add:-
Surcharge:- 12% of tax where total income exceeds INR 1 crore.
Health and Education cess: 4% of income tax plus surcharge.
a. Tax rates for domestic companies:
|
Particulars |
Tax rates |
|
Total turnover or gross receipts during the previous year 2017-18 doesn’t exceed Rs. 250 Crore |
25% |
|
Other domestic companies |
30% |
b. Tax rates for foreign companies:
The tax rate for foreign company is 40%.
Add: -
Surcharge:-
|
Company |
Net income is between INR 1Cr. to 10 Cr. |
Net income exceeds INR 10Cr. |
|
Domestic company |
7% |
12% |
|
Foreign company |
2% |
5% |
Health and Education cess: 4% of income tax plus surcharge.
|
Net income range |
Income-Tax rate |
|
Up to INR 2,50,000 |
Nil |
|
INR 2,50,000 to INR 5,00,000 |
5% |
|
INR 5,00,000 to INR 10,00,000 |
20% |
|
Above INR 10,00,000 |
30% |
Add: -
Surcharge: - 10% of income tax where total income exceeds INR 50,00,000.
15% of income tax where total income exceeds INR. 1,00,00,000.
Health and Education cess: - 4% of income tax and surcharge.
|
Net income range |
Income-Tax rate |
|
Up to INR 10,000 |
10% |
|
INR 10,000 to INR 20,000 |
20% |
|
Above INR 20,000 |
30% |
Add:
Surcharge:- 12% of tax where total income exceeds Rs. 1 crore.
Health and Education cess: 4% of income tax plus surcharge.
A local authority is taxable at 30%.
Add:
Surcharge:- 12% of tax where total income exceeds Rs. 1 crore.
Health and Education cess: 4% of income tax plus surcharge.
The interim Union Budget for F.Y. 2019-20 was announced by Mr Piyush Goyal, Union Minister for Finance, Corporate Affairs, Railways and Coal, Government of India, in Parliament on February 01, 2019. It focuses on supporting the needy farmers, economically less privileged, workers in the unorganised sector and salaried employees, while continuing the Government of India’s push towards better physical and social infrastructure.
Total expenditure for 2019-20 is budgeted at Rs 2,784,200 crore (US$ 391.53 billion), an increase of 13.30 per cent from 2018-19 (revised estimates).
Highlights of Interim Union Budget 2019-20 :-
The new format will allow the tax department to view a detailed break up of the income and tax breaks claimed by a salaried person.
As per the changes notified, Form-16 issued by an employer will have to specify the nature of tax-exempt allowances paid to the employee.
The CBDT has notified a new format for Form 16 – the salary TDS certificate – requiring a detailed break up of tax exempt allowances paid to the employee and also of all tax breaks claimed by him/her. The earlier format allowed companies to give consolidated figures or break-up in different formats for both these thereby leaving some ambiguity regarding their individual composition.
Concurrent changes have been made in the format of the TDS return (details of TDS from employees’ salaries) filed by companies with the tax department to allow the tax man to cross check an employee’s ITR, Form 16 and the company’s TDS return easily.
Last year the tax man had detected several cases of false claims of large income tax refunds made by some employees which is likely to be another reason for this streamlining exercise which is aimed at removing all space for such manoeuvres in future.
The new format will allow the tax department to view a detailed break up of the income and tax breaks claimed by a salaried person at the first instance itself. Consequently, any discrepancy between the income and deductions shown in Form 16 and the ITR filed by the person can be immediately spotted. This new format is likely to help the department digitise cross checking of figures too because it takes away the leeway that companies earlier had in providing the break up of income and deductions ..
Click here to read the notification
