Direct Taxation
Lok Sabha Passes Finance Bill, 2020 without Discussion amid Coronavirus Pandemic
27.03.2020
Lok Sabha has passed the Finance Bill, 2020 with amendments as political parties agreed to clear the Central Government’s financial and tax proposals for the financial year 2021 without a discussion. For the year 2020-2021, the Union Government has assumed a nominal GDP growth rate of 10% as compared to the year 2019-20 wherein the nominal growth estimate was 12%. The Government has proposed to spend Rs 30,42,230 crore for the Financial Year in 2020-21, which is 12.7% higher than the revised estimate of 2019-20.
The Act has also proposed various changes in the rate of tax applicable for Individuals, senior citizens and for companies.
The tax slab for Individuals is as follows:
| SLAB |
Rate of Tax |
| Upto Rs. 2,50,000 |
Nil |
| Rs.2,50,000 to Rs.5,00,000 |
5% |
| RS. 5,00,001 to RS. 7,50,000 |
10% |
| Rs.7,50,001 to Rs.10,00,000 |
15% |
| Rs.10,00,001 to Rs.12,50,000 |
20% |
| Rs.12,50,001 to Rs. 15,00,000 |
25% |
| Above Rs.15,00,000 |
30% |
One of the major steps taken in the Finance Act, 2020 are some non-tax changes to the Prohibition of Benami Properties Transactions Act, 1988. The Act constitutes an adjudicating authority on issues related to Benami properties. The qualifications for the chairperson and members of the authority are that they must have been: (i) a member of the Indian Revenue Service as Commissioner of Income-tax or equivalent, or (ii) a member of the Indian Legal Service as Joint Secretary or equivalent. The Bill states that an individual qualified for the position of District Judge may also be the chairperson or a member of the authority.
The Finance Act, 2020 also proposes changes in Commodities Transaction Tax wherein the Bill creates three tax rates:
(i) 0.01% payable by the seller on the sale of commodity derivatives based on its price or price index,
(ii) (ii) 0.0001% payable by the buyer on the sale of an option in goods resulting in the delivery of the goods,
(iii) 0.125% payable by the buyer on the sale of an option in goods resulting in a cash payment.
Presently, in the current scenario, the commodities transaction tax on commodity derivatives is 0.01%.
Currently, companies have to pay a tax of 15% on dividends distributed by it to shareholders. This has been removed and the dividend income will now be taxable in the hands of the recipient.
Further, in the Indian Stamp Act, 1899 is now proposed that Stamp duty will not be charged in the case of transactions in stock exchanges and depositories established in international financial centres set up under the Special Economic Zones Act, 2005. In short, number of changes has been proposed in the by the Finance Act for the Year 2020-21 which aims for strengthening the financial stability of the country.
Tags : Finance Bill Amendment Passing of
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