Interim Finance Budget 2019

The Finance Minister recently announced the interim finance budget for the upcoming financial year 2019-20. Here are the key highlights of the Budget 2019:

Income from Salaries

Standard Deduction for the salaried individuals has been increased to Rs 50,000 from the previous Rs 40,000 (Section 16(ia))

Income from House Property

There will be no tax on Notional Rent of second Self-Occupied House under the head - 'Income from House property', i.e two house properties can now be considered while calculating the income from house property. (Section 23(4))

Income from Capital Gains

Section 54 exemption is available on the second house property, provided the capital gains is up to Rs. 2 crores. This benefit can be availed only once in a lifetime

Others

The limit for Tax rebate under section 87A increased from Rs. 3,50,000 to Rs. 5,00,000 for the individual taxpayers

TDS limit hiked from Rs 10,000 to Rs 40,000 on Post Office Savings and Bank Deposits (Section 194A)

TDS limit for rent from properties has been increased to Rs. 2,40,000 from Rs. 1,80,0000 (Section 194I)

Content courtesy: ClearTax (Tax Could)

No exemption of service tax for services provided to higher education institutions

Service Tax: Effect of A new Notification: Notification No. 10/2017-Service Tax dated 8th March, 2017, effective from 1st April, 2017, issued by Government so as to withdraw exemptions granted earlier to few specific Services provided "to" an Education Institutions.

Services of: Transportation of Students, Faculty, and Staff; Catering including mid-day meal sponsored by  government; Security or cleaning or housekeeping services; Services relating to admission to or conduct of Examination by such institution; If provided to an Educational Institution will remain exempted only if that education Institution is providing either Pre-school education or education up to higher secondary school or equivalent.

It means that services of Transportation/ Catering/ Security/ Admission or conduct of Examination provided to any college/University providing degree courses beyond higher secondary level will be taxable.

Simple comparison betweeen VAT and GST

VAT - is state specific limit 10 L

GST - GST Registration limit 20 L +

VAT - TIN based Registration

GST - PAN based Registration

VAT - Interstate transactions (CST) no Input Tax Credit

GST - Seamless flow of Input Tax Credit

VAT - Declaration Forms like C, H etc are applicable

GST - No Declaration Forms

VAT - Returns by 20th of suceeding month

GST - Returns by 20th of suceeding month but in a phased manner (Sales by 10th, Purchases by 15th and payment by 20th)

VAT - There is no specific mode of payment

GST - Mode of payment if exceeds 10,000 by e-payment, less than is optional

VAT - Immediately after filling avail Input Tax Credit

GST - Once the Supplier pay tax then only seller gets ITC

VAT - No rating for the Business

GST - GST rating based on timely filling of returns & payments..

VCs are from Venus, Entrepreneurs are from Mars

This is an extract of the article published in the newsletter of the Indian Association of Investment Professionals (IAIP) a member society of the CFA Institute, US.

Financial transactions are timeless – buyers and sellers have always shared a bittersweet equation for millennia. The conversations take a different twist when we consider a longstanding relationship – what better example than that of a financial investor in a venture.

Since the beginning of this decade, the Indian economy has entered a steeper trajectory of its growth curve – flow of capital towards investment into the startup space is one proxy to confirm this trend. With technological advances seeping into every industry and their sectors, investors are vying to get a share of the upside of this growth story. Capital flow into the venture ecosystem has grown multifold, in particular through the Institutional investment space. It has led to Venture Capital investment into startups turning into a much-discussed topic, even over coffee tables

You can read the full article here:

https://iaip.wordpress.com/2017/01/02/vcs-are-from-venus-entrepreneurs-are-from- mars/ 

Personal income tax implications of #Budget2017

1. Existing rate of tax for individuals between Rs.  2.5- Rs 5 lakh is reduced to 5% from 10%.
2. All other categories of tax payers in subsequent brackets will get a benefit of Rs 12,500.
3. Simple one page return for people with an annual income of Rs. 5 lakh other than business income.
4. People filing I-T returns for the first time will not come under any government scrutiny.
5. Ten % surcharge on individual income above Rs. 50 lakh and up to Rs 1 crore to make up for Rs 15,000 crore loss due to cut in personal I-T rate. 15 surcharge on individual income above Rs. 1 crore to remain.