STATEMENT OF OBJECTS AND REASONS - Finance Bill, 2019

STATEMENT OF OBJECTS AND REASONS The object of this Bill is to continue the existing rates of income-tax for the financial year 2019-2020 and to provide certain relief to taxpayers and to make amendments in certain enactments. 2. Clause 2 of the Bill seeks to provide for the rates of income-tax. The rates of income-tax which were specified in Part III of the First Schedule to the Finance Act, 2018 for the purposes of charging income-tax in certain cases, deduction of tax at source from salaries during the financial year 2018-2019, computation of advance tax payable during that financial year in relation to current incomes and for certain special purposes, are proposed to be continued for the purposes of assessment for the assessment year 2019-2020. Further, the same rates are proposed to be continued also for the purposes of charging income-tax in certain cases, deduction of tax at source from salaries during the financial year 2019-2020, computation of advance tax payable during that financial year in relation to current incomes, and also for the said special purposes. 3. The rates for deduction of tax at source during the financial year 2018-2019 from incomes other than salaries specified in Part II of the First Schedule to the Finance Act, 2018, are also proposed to be continued for deduction of tax at source from such incomes during the financial year 2019-2020. 4. It accordingly proposes to apply the provisions of section 2 of, and the First Schedule to, the Finance Act, 2018, with consequential and other necessary modifications, to the assessment year 2019-2020 or, as the case may be, the financial year 2019-2020. 5. Clause 3 of the Bill seeks to amend section 16 of the Income-tax Act to provide relief to the salaried taxpayers by way of increasing the amount of deduction from salary income, from existing forty thousand rupees to fifty thousand rupees. 6. Clause 4 of the Bill seeks to amend section 23 of the Income-tax Act so as to provide relief to the taxpayer by allowing him an option to claim nil annual value in respect of any two houses, declared as self-occupied, instead of one such house as currently provided. It further seeks to provide relief to the taxpayers that notional rent in respect of unsold inventory shall not be charged to tax up to two years, instead of existing one year, from the end of the financial year in which the certificate of completion is obtained from the competent authority. 7. Clause 5 of the Bill seeks to amend section 24 of the Income-tax Act to provide that the monetary limit of deduction on account of interest payable on borrowed capital shall continue to apply to the aggregate of the amounts of deduction in case of more than one self-occupied houses. 8. Clause 6 of the Bill seeks to amend section 54 of the Income-tax Act so as to provide relief to the taxpayers having long-term capital gains up to two crore rupees, arising from transfer of a residential house, by affording the assessee a one time opportunity, at his option, to utilise the said amount for the purchase or construction of two residential houses in India instead of one residential house as currently provided. 9. Clause 7 of the Bill seeks to amend section 80-IBA of the Income-tax Act so as to augment the supply of affordable houses by extending the time limit from 31st March, 2019 to 31st March, 2020 for obtaining approval of the housing project for availing deduction. 10. Clause 8 of the Bill seeks to amend section 87A of the Income-tax Act to provide relief to the individual taxpayers by increasing the maximum amount of tax rebate to twelve thousand five hundred rupees from existing two thousand five hundred rupees. The tax rebate shall now be admissible to taxpayers having total income up to five hundred thousand rupees, instead of existing three hundred fifty thousand rupees. 11. Clause 9 of the Bill seeks to amend section 194A of the Income-tax Act so as to ease the burden of compliance by way of increasing the threshold limit from ten thousand rupees to forty thousand rupees, for deduction of tax at source on interest income, other than interest on securities, paid by a banking company, co-operative society or a post office. 12. Clause 10 of the Bill seeks to amend section 194-I of the Income-tax Act to rationalise the threshold limit from one hundred and eighty thousand rupees to two hundred and forty thousand rupees, for deduction of tax at source on rental income. 13. Clauses 11 to 21 of the Bill seek to amend the Indian Stamp Act, 1899 for levy and administration of stamp duty on securities market instruments by the States at one place through one agency, viz., through Stock Exchanges or its Clearing Corporation or Depositories on one instrument, and for appropriately sharing the same with respective State Governments based on State of domicile of the ultimate buying client. 14. Clause 22 of the Bill seeks to amend sub-section (3) of section 8 of the Prevention of Money-laundering Act, 2002 so as to extend the time limit of ninety days for which the attachment shall remain valid during the period of investigation to three hundred and sixty-five days and also to provide that in computing the period of three hundred and sixty-five days, the period during which the investigation is stayed by any court shall be excluded. PIYUSH GOYAL. NEW DELHI; The 30th January, 2019. ___________ PRESIDENT S RECOMMENDATION UNDER ARTICLES 117 AND 274 OF THE CONSTITUTION OF INDIA [Copy of letter No. 2(5)-B(D)2019, dated the 30th January, 2019 from Shri Piyush Goyal, Minister of Finance, to the Secretary-General, Lok Sabha.] The President, having been informed of the subject matter of the proposed Bill, recommends under clauses (1) and (3) of article 117, read with clause (1) of article 274, of the Constitution of India, the introduction of the Finance Bill, 2019 to the Lok Sabha and also recommends to the Lok Sabha the consideration of the Bill. 2. The Bill will be introduced in the Lok Sabha immediately after the presentation of the Budget on the 1st February, 2019. LOK SABHA ________ A BILL to continue the existing rates of income-tax for the financial year 2019-2020 and to provide for certain relief to taxpayers and to make amendments in certain enactments. ________ (Shri Piyush Goyal, Minister of Finance.)