Interim Union Budget 2019 Summary

[CAPuneet Doomra]

RATES OF INCOME-TAX

Income - Tax

The provisions of section 2 of, and the First Schedule to, the Finance Act, 2018 (13 of 2018. ), shall apply in relation to income-tax for the assessment year (2020-2021) or, as the case may be, the financial year commencing on the 1st day of April 2019, as they apply in relation to income-tax for the assessment year (2019-2020), or as the case may be, the financial year commencing on the 1st day of April 2018, with the following modifications, namely:––

(a) in section 2,––

(i) in sub-section (1), for the figures “2018”, the figures “2019” shall be substituted;

(ii) in sub-section (3), for the first proviso, the following proviso shall be substituted, namely:––

“PROVIDED THAT the amount of income-tax computed in accordance with the provisions of section 111A or section 112 or section 112A of the Income-tax Act shall be increased by a surcharge, for the purposes of the Union, as provided in Paragraph A, B, C, D or E, as the case may be, of Part I of the First Schedule (explained below):”;

[Section 111A:- Tax on short term capital gains in certain cases]

[section 112:- Tax on long-term capital gains]

[Section 112A:- Tax on long-term capital gains in certain cases]

(iii) for sub-section (11) and sub-section (12), the following sub-section shall be substituted, namely:––

‘(11) The amount of income-tax as specified in sub-sections (1) to (3) and as increased by the applicable surcharge (explained below), for the purposes of the Union, calculated in the manner provided therein, shall be FURTHER increased by an additional surcharge, for the purposes of the Union, to be called the “Health and Education Cess on income-tax”, calculated at the rate of four percent (4%). of such income-tax and surcharge so as to fulfill the commitment of the Government to provide and finance quality health services and universalized quality basic education and secondary and higher education.’;

(iv) sub-section (13) and sub-section (14) shall be re-numbered as sub-section (12) and sub-section (13), respectively;

(v) in sub-section (13) as so re-numbered, in clause (a), for the figures “2018”, the figures “2019” shall be substituted;

(b) in the First Schedule,––

(i) for Part I, the following Part I shall be substituted, namely:––

 

“PART I”

INCOME-TAX

Paragraph A

(I) In the case of every resident individual OTHER THAN the individual referred to in items (II) and (III) of this Paragraph or Hindu undivided family (HUF) or association of persons (AOP) or body of individuals (BOI), whether incorporated or not, or every artificial juridical person (AJP) referred to in sub-clause (vii) of clause (31) of section 2 of the Income-tax Act, not being a case to which any other Paragraph of this Part applies,-

(Individual other than referred in (II)& (III) below, HUF, BOI, AOP & AJP)

Rates of income-tax

(1) where the total income does not exceed ₹ 2,50,000	Nil;
(2) where the total income exceeds ₹ 2,50,000  but does not exceed ₹ 5,00,000	5 percent. of the amount by which the total income exceeds ₹ 2,50,000;
(3) where the total income exceeds ₹ 5,00,000  but does not exceed ₹ 10,00,000	Rs.12,500 plus 20 percent. of the amount by which the total income exceeds ₹ 5,00,000;
(4) where the total income exceeds  ₹ 10,00,000	Rs.1,12,500 plus 30 percent. of the amount by which the total income exceeds ₹ 10,00,000.

(II) In the case of every individual, being a resident in India, who is of the age of sixty years or more but less than eighty years at any time during the previous year,-

Rates of income-tax

(1) where the total income does not exceed  Rs.3,00,000	Nil;
(2) where the total income exceeds ₹ 3,00,000  but does not exceed ₹ 5,00,000	5 percent. of the amount by which the total  income exceeds ₹ 3,00,000;
(3) where the total income exceeds ₹ 5,00,000  but does not exceed ₹ 10,00,000	Rs.10,000 plus 20 percent. of the amount by which the total income exceeds ₹ 5,00,000;
(4) where the total income exceeds  Rs.10,00,000	Rs.1,10,000 plus 30 percent. of the amount by which the total income exceeds ₹ 10,00,000.

 (III) In the case of every individual, being a resident in India, who is of the age of eighty years or more at any time during the previous year,-

Rates of income-tax

(1) where the total income does not exceed ₹ 5,00,000	Nil;
(2) where the total income exceeds ₹ 5,00,000 but does not exceed ₹ 10,00,000	20 percent. of the amount by which the total income exceeds ₹ 5,00,000;
(3) where the total income exceeds  Rs.10,00,000	Rs.1,00,000 plus 30 percent. of the amount by which the total income exceeds ₹ 10,00,000.

Surcharge on income-tax

The amount of income-tax computed in accordance with the preceding provisions of this Paragraph, or the provisions of section 111A or section 112 or section 112A of the Income-tax Act, shall be increased by a surcharge for the purposes of the Union, calculated, in the case of every individual or Hindu undivided family  (HUF) or association of persons (AOP) or body of individuals (BOI), whether incorporated or not, or every artificial juridical person (AJP) referred to in sub-clause (vii) of clause (31) of section 2 of the Income-tax Act,-

(a) having a TOTAL INCOME exceeding fifty lakhs rupees (Rs. 50 Lakhs) but not exceeding one crore rupees (Rs. 1 Crore), at the rate of ten percent (10%) of such income-tax; and (Rs. 50 Lakhs to ₹ 1 Crore)

(b) having a TOTAL INCOME exceeding one crore rupees, at the rate of fifteen percent (15%) of such income-tax: (Exceeds ₹ 1 Crore)

Paragraph B

In the case of every co-operative society,-

Rates of income-tax

(1) where the total income does not exceed  Rs.10,000	10 percent. of the total income;
(2) where the total income exceeds ₹ 10,000 but does not exceed ₹ 20,000	Rs.1,000 plus 20 percent. of the amount by which the total income exceeds ₹ 10,000;
(3) where the total income exceeds ₹ 20,000	Rs.3,000 plus 30 percent. of the amount by which the total income exceeds ₹ 20,000.

Surcharge on income-tax

The amount of income-tax computed in accordance with the preceding provisions of this Paragraph, or the provisions of section 111A or section 112 or section 112A of the Income-tax Act, shall, in the case of every co-operative society, having a total income exceeding one crore rupees (Rs. 1 Crore), be increased by a surcharge for the purposes of the Union calculated at the rate of twelve percent (12%). of such income-tax:

Paragraph C

In the case of every firm,-

Rate of income-tax

On the whole of the total income

30 percent.

 

Surcharge on income-tax

The amount of income-tax computed in accordance with the preceding provisions of this Paragraph, or the provisions of section 111A or section 112 or section 112A of the Income-tax Act, shall, in the case of every firm, having a total income exceeding one crore rupees( ₹ 1 Crore), be increased by a surcharge for the purposes of the Union calculated at the rate of twelve percent (12%). of such income-tax:

Paragraph D

In the case of every local authority;-

Rate of income-tax

On the whole of the total income

30 percent.

 

Surcharge on income-tax

The amount of income-tax computed in accordance with the preceding provisions of this Paragraph, or the provisions of section 111A or section 112 or section 112A of the Income-tax Act, shall, in the case of every local authority, having a total income exceeding one crore rupees ₹ 1 Crore), be increased by a surcharge for the purposes of the Union calculated at the rate of twelve percent (12%). of such income-tax:

Paragraph E

In the case of a company;-

Rates of income-tax

I. In the case of a domestic company,-

(i) where its total turnover or the gross receipt in the previous year 2016-2017 does not exceed two hundred and fifty crore rupees (upto ₹ 250 Crores in PY 2016-17)	25 percent of the total income;
(ii) other than that referred to in item (i)	30 percent of the total income.

II. In the case of a company other than a domestic company,-

(i) on so much of the total income as consists of,-
royalties received from Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 31st day of March 1961 but before the 1st day of April 1976; or
fees for rendering technical services received from Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 29th day of February 1964 but before the 1st day of April 1976,
and where such agreement has, in either case,             been     approved by the Central Government	50 percent
(ii) on the balance, if any, of the total income	40 percent

 

Surcharge on income-tax

The amount of income-tax computed in accordance with the preceding provisions of this Paragraph, or the provisions of section 111A or section 112 or section 112A of the Income-tax Act, shall be increased by a surcharge for the purposes of the Union calculated,––

(i) in the case of every domestic company,––

(a) having a total income exceeding one crore rupees but not exceeding ten crore rupees, at the rate of seven percent (7%) of such income-tax; and (Above 1 Crore but not exceeding 10 Crores)

(b) having a total income exceeding ten crore rupees, at the rate of twelve percent (12%) of such income-tax; (Exceeding 10 Crores)

(ii) in the case of every company other than a domestic company,––

(a) having a total income exceeding one crore rupees but not exceeding ten crore rupees, at the rate of two percent (2%) of such income-tax; and (Above 1 Crore but not exceeding 10 Crores)

(b) having a total income exceeding ten crore rupees, at the rate of five percent (5%) of such income-tax: (Exceeding 10 Crores)

Particulars	Domestic Companies	Other than Domestic Companies
Above 1 Crore but not exceeding 10 Crores	7%	12%
Exceeding 10 Crores	2%	5%

Amendment of section 16

In section 16 of the Income-tax Act, 1961 (43 of 1961) (hereafter in this Chapter referred to as the Income-tax Act), in clause (ia) [as inserted by section 7 of the Finance Act, 2018 (13 of 2018)], for the words “forty thousand”,(Rs. 40,000) the words “fifty thousand”(Rs. 50,000) shall be substituted with effect from the 1st day of April 2019.

Amendment of section 23

In section 23 of the Income-tax Act, with effect from the 1st day of April 2019,––

(a) in sub-section (4) ––

 (i) in the opening portion, for the words “one house”, the words “two houses” shall be substituted;

(ii) in clause (a), for the word “one”, the word “two” shall be substituted;

(iii) in clause (b), for the words “other than the house”, the words “other than the house or houses” shall be substituted;

(b) in sub-section (5), for the words “one year”, the words “two years” shall be substituted.

Amendment of section 24

In section 24 of the Income-tax Act, with effect from the 1st day of April 2019,––

(a) in the first proviso, after the words “the amount of deduction”, the words “or, as the case may be, the aggregate of the amounts of deduction” shall be inserted;

(b) in the second proviso, after the words “the amount of deduction”, the words “or, as the case may be, the aggregate of the amounts of deduction” shall be inserted;

(c) after the Explanation to the third proviso, the following proviso shall be inserted, namely:––

“Provided also that the aggregate of the amounts of deduction under the first and second provisos shall not exceed two lakh rupees.” (Rs. 2,00,000)

Amendment of section 54

In section 54 of the Income-tax Act, in sub-section (1), after clause (ii), the following provisos shall be inserted with effect from the 1st day of April 2019, namely:––

‘Provided that where the amount of the capital gain does not exceed two crore rupees, the assessee, may at his option, purchase or construct two residential houses in India, and where such an option has been exercised,––

(a) the provisions of this sub-section shall have effect as if for the words “one residential house in India”, the words “two residential houses in India” had been substituted;

(b) any reference in this sub-section and sub-section (2) to “new asset” shall be construed as a reference to the two residential houses in India:

Provided further that where during any assessment year, the assessee has exercised the option referred to in the first proviso, he shall not be subsequently entitled to exercise the option for the same or any other assessment year.’(this option can be exercised only once in a lifetime)

Amendment of section 80-IBA

In section 80-IBA of the Income-tax Act, in sub-section (2), in clause (a), for the figures “2019”, the figures “2020” shall be substituted with effect from the 1st day of April 2019.

 

Amendment of section 87A

In section 87A of the Income-tax Act, with effect from the 1st day of April 2019,––

(a) for the words “three hundred fifty thousand (Rs. 3,50,000)”, the words “five hundred thousand (Rs. 5,00,000)” shall be substituted;

(b) for the words “two thousand and five hundred (Rs. 2500)”, the words “twelve thousand and five hundred (Rs.12,500)” shall be substituted.

 

Amendment of section 194A

In section 194A of the Income-tax Act, in sub-section (3), in clause (i), for the words “ten thousand” wherever they occur, the words “forty thousand” shall be substituted.

 

Amendment of section 194-I

10. In section 194-I of the Income-tax Act, in the first proviso, for the words “one hundred and eighty thousand rupees (Rs. 1,80,000)”, the words “two hundred and forty thousand rupees (Rs. 2,40,000)” shall be substituted.