Budget 2019-20 : Highlights in Direct Taxes

1. The previous year rate of income tax slab will continue for the financial year of 2019-10.

Let have we see the following Income Tax slab rates.

i) Who is the age less than 60 years slab rate for - Individual /HUF /AOP /BOI / Non- resident:

Income range	Income tax rate
Upto Rs. 2,50,000	Nil
Rs. 2,50,000 to Rs. 5,00,000	5%
Rs. 5,00,000 to Rs. 10,00,000	20%
Above Rs. 10,00,000	30%

ii) Who is the age more than 60 year but less than 80 years slab rate for - Individual /HUF /AOP /BOI / Non- resident:

Income range	Income tax rate
Upto Rs. 3,00,000	Nil
Rs. 3,00,000 to Rs. 5,00,000	5%
Rs. 5,00,000 to Rs. 10,00,000	20%
Above Rs. 10,00,000	30%

iii) Who is the age more than 80 years  - Individual /HUF /AOP /BOI / Non- resident:

Income range	Income tax rate
Upto Rs. 5,00,000	Nil
Rs. 5,00,000 to Rs. 10,00,000	20%
Above Rs. 10,00,000	30%

iv) For others Category 

Firm	30%
Domestic Company (if turnover in previous year 2016-17 is upto Rs. 250 crore)	25%
Domestic Company (if turnover in previous year 2016-17 exceeds Rs. 250 crore)	30%
Foreign Company (some specified transactions with Government)	50%
Other Foreign Company	40%

2. No changes in surcharges. When surcharge is levied and that details as under:

Particulars	Rate of Surcharge
	Exceeds INR.50 Lakhs to 1 Cr	Exceeds INR. 1 Cr to 10 Cr	Exceeding INR. 10 Cr
Individual/HUF/AOP/BOI	10%	15%	15%
Firm	Nil	12%	12%
Domestic Company	Nil	7%	12%
Foreign Company	Nil	2%	5%

3. Amendments proposed in Financial Bill, 2019 and this amendments applicable from 1st April 2019. Shall we have see about the comparative analysis of current law vs amendment financial bill 2019.

Section of Income tax Act,1961	Current Law	Amendment proposed in Finance Bill, 2019
Section 16	Under Income chargeable under the head salaries, there is standard deduction of INR. 40,000 in lieu of transport allowance and medical reimbursement of INR.15,000 or the amount of salary, whichever is less.	Standard deduction of INR.40,000 is increased to INR.50,000.
Section 23	If there is more than one self-occupied property, the annual value of one house property is taken to be Nil and the other property is deemed to be let out.	There is no notional tax on two self-occupied properties
Section 54	There is exemption on capital gains in case all following conditions are satisfied: 1. The property is residential house property 2. The property is transferred by any Individual or HUF 3. The gain arises from transfer of property is long term capital asset 4. A new house property is purchased within a period of one year before transfer or within two year after the date of transfer 5. A house property is constructed within a period of 3 years from the date of transfer	If capital gain does not exceed two crore, an assessee can purchase or construct two residential house. Earlier the exemption on capital gain was available only for one house property. However, this exemption can be availed only once in a life time.
Section 80-IBA	There is 100% Deduction in respect of profits derived from housing projects, if following conditions are satisfied: 1. The project is approved by competent authority after 01st day of June 2016 but on or before 31st day of March 2019 2. The project is completed within a period of 5 years from the date of approval 3. Other condition relates to location, size of project etc.	If the project is approved before 31st day of March 2020, then also deduction is available. In other words, to make homes available under affordable housing, the benefit is extended for one more year.
Section 87A	If the total income of an individual resident does not exceed Rs. 3,50,000, there is deduction of Rs. 2500 or 100% of Income tax whichever is less.	Now, if income does not exceed Rs.5,00,000, there is deduction of Rs. 12,500 or 100% of Income tax whichever is less. Therefore, if taxable annual income of an assessee is upto Rs.5,00,000, he shall not pay any tax but if Income exceeds Rs.5,00,000 then slab rate shall be applicable.
Section 194A	If any income is credited to an Individual or HUF by way of Interest other than interest on securities, tax is to be deducted @ 10%. However, no tax is to be deducted if: 1. Income does not exceed Rs. 10,000 where interest is paid by any banking company, co-operative society engaged in banking business, post office. 2. Income does not exceed Rs. 5,000 in any other case.	The exemption limit is now increased from Rs.10,000 to Rs.40,000, if interest is credited by banking company or post office. However, if interest is credited by any other, the limit is Rs.5,000 only.
Section 194-I	If rent is payable by any person exceeding Rs. 1,80,000, tax is to be deducted @ 2% if plant or machinery is being given on rent and 10% if land, building or furniture is being given on rent	The limit is increased from Rs.1,80,000 to Rs.2,40,000