Key highlights of Budget speech:
- Corporate Tax: The lower rate of 25 % Corporate Tax will be extended to all companies with annual turnover up to Rs. 400 crore. Currently, this rate is only applicable to companies having annual turnover up to Rs. 250 crore. This will cover 99.3 percent of the companies.
- PAN – Adhaar Interchangeability: The Budget also proposes to make PAN and Aadhaar interchangeable and allow those who do not have PAN to file Income Tax Returns by simply quoting their Aadhaar number and also use it wherever they are required to quote PAN.
- Pre-filling of Income-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.
- Encourage Digital Payments:
- To promote digital payments, the Budget also proposes to levy TDS of 2 percent on cash withdrawal exceeding Rs. 1 crore in a year from a bank account.
- The business establishments with annual turnover more than Rs. 50 crore shall offer such low cost digital modes of payment to their customers.
- No Merchant Discount Rate (MDR) shall be imposed on customers as well as merchants.
- Faceless e-assessment to eliminate undesirable practices:
- The existing system of scrutiny assessments in the IT Department involves a high level of personal interaction between the taxpayer and the Department, which leads to certain undesirable practices on the part of tax officials.
- To eliminate such instances a scheme of faceless assessment in electronic mode involving no human interface is being launched this year in a phased manner.
- GST processes are being further simplified: The threshold exemption limit for a supplier of goods is proposed to be enhanced from Rs. 20 lakhs to an amount exceeding Rs. 40 lakhs.
- Sabka Vishwas Legacy Dispute Resolution Scheme:
- The budget proposes this as a dispute resolution-cum-amnesty scheme to allow quick closure of huge pending litigations from pre-GST regime.
- The relief under the scheme varies from 40 percent to 70 percent of the tax dues for cases other than voluntary disclosure cases, depending on the amount of tax dues involved.
- The effective tax rates for the higher income group individuals having taxable income from Rs. 2 crore to Rs. 5 crore and 5 crore and above is proposed to be increased by around 3 percent and 7 percent respectively.
- It is proposed to give relief in levy of Securities Transaction Tax (STT) by restricting it only to the difference between settlement and strike price in case of exercise of options.
