Filing tax returns if you have foreign trips and steep electricity bills
The government in the budget 2019 has made income tax return filing compulsory for high spenders despite the fact that their taxable income is less than the threshold exemption limit of Rs 5 lakh.
Those mandated towards filling returns consist of people spending above Rs 2 lakh on a foreign trip or depositing Rs 1 crore in a year in a bank account or paying the electricity bill of above Rs 1 lakh in a year.
The announcement for filing tax returns made in the budget
Presently, a person apart from a company or a firm is requisite to furnish the return of income only if his total income surpasses the maximum amount not chargeable to tax, subjected to certain exceptions. Budget documents held that a person entering into certain high-value transactions are not necessarily required to furnish his return of income.
It is suggested to amend section 139 of the Income Tax Act to make certain that persons who enter into certain high-value transactions have to furnish their return of income.
So, any individual who has in the previous year deposited an amount or aggregate of the amounts surpassing Rs 1crore in one or more current account maintained with a banking company or a co-operative bank; or has incurred expenditure of an amount or aggregate of the amounts surpassing Rs 2 lakh for himself or any other individual for travel to a foreign country; or has incurred expenditure of an amount or aggregate of the amounts surpassing Rs 1 lakh towards consumption of electricity is required to file a tax return.
Long Term Capital Gains
Any individual claiming the benefits of tax exemption from long term capital gains under various provisions under section 54 of the Income Tax Act is required to file a tax return.
Furthermore, presently, an individual claiming rollover benefit of exemption from capital gains tax on investment in specified assets like house, bonds, etc, is not required toward furnishing a return of income, if, after claim of such rollover benefits, his total income is not above the maximum amount not chargeable to tax. For making the furnishing of return mandatory for such individuals, it is proposed to amend the sixth proviso to section 139 of the Act towards providing that an individual who is claiming such rollover benefits on investment in a house or a bond or other assets, is necessarily required to furnish a return, if, before claim of the rollover benefits, his total income is above the maximum amount not chargeable to tax.
These amendments shall take effect from 1st April 2020, and would, accordingly apply in relation to the assessment year 2020-21 and subsequent assessment years.
A less-cash economy
In order to discourage cash transactions and moving towards a less-cash economy, the Budget 2019 has also proposed to insert a new section 194N in the Income Tax Act to provide for levy of TDS at the rate of 2% on cash payments in excess of Rs 1 crore in aggregate made during the year through a banking company or cooperative bank or post office to any individual from an account maintained by the recipient.
The Budget 2019 has proposed to exempt payment made towards certain recipients, such as the Government, banking company, cooperative society engaged in carrying on the business of banking, post office, banking correspondents as well as white label ATM operators, who are involved in the management of substantial amounts of cash as a part of their business operation, from the application of this provision.
It was also proposed towards empowering the Central government to exempt other recipients, through a notification in the official Gazette in consultation with the Reserve Bank of India.
This amendment shall take effect from 1st September 2019.
Nirmala Sitharaman, who served as the full-time Defence Minister of India in the Narendra Modi government from September 2017 to May 2019, has been appointed as the new finance minister in this 2nd term of the Modi Government. Union Finance Minister Nirmala Sitharaman had made her maiden budget of the Modi 2.0 Government in the Lok Sabha on July 5, 2019, in the Parliament, announced several sops for various sectors.
Click here to know about Change in LTCG tax rate in the upcoming 2019 budget
Leave a Comment
Previous Comments