Interim Budget 2019 Highlights

By Ventura Pranas | 01/04/2019

New Form 12BB, Income Tax Act, 1961

Submit Form 12BB: You need to submit an investment and expense declaration (such as house rent, leave travel, interest on housing loan, tuition fees, etc) with your employer at the beginning of the year, which will be used by the employer to deduct TDS from your salary. You would need to submit form 12BB with the employer declaring all this.[Download]

Link PAN and Aadhaar: Although the deadline to link PAN and Aadhaar has been increased by six months, it is better to do it as soon as possible as you would need it while filing your income tax return.

Highlights of the bi-monthly monetary policy announced by the RBI

Short-term lending rate (repo) reduced by 25 bps to 6 pc;
This is second back-to-back rate cut;
RBI maintains Neutral stance on the monetary policy
GDP growth projection lowered to 7.2 pc for 2019-20;
RBI revises downward retail inflation estimate to 2.4 pc in Q4 FY19.

NOTIFICATION No. 31/2019 - New Delhi, 31st March, 2019

In exercise of the powers conferred under sub-section (2) of section 139AA of the Income-Tax Act, 1961 (Act), the Central Government, hereby notifies that every person who has been allotted permanent account number as on the 1st day of July, 2017, and who is eligible to obtain Aadhaar number, shall intimate his Aadhaar number to the Principal Director General of Income-tax (Systems) or Principal Director of Income‑tax (Systems) in the form and manner specified in Notification no. 7 dated 29th of June, 2017 issued by the Principal Director General of Income Tax (Systems) by 30th of September. 2019.

This notification shall not be applicable to those persons or such class of persons or any State or part of any State who/which are/is specifically excluded under sub-section (3) of section 139AA of the Act.

However, notwithstanding the last date of linking of Aadhaar number with PAN being extended to 30.09.2019 in para 1 above, it is also made clear in Circular No. 6 of 2019 that w.e.f. 01st of April, 2019, it is mandatory to quote Aadhaar number while filing the return of income as required under Section 139AA(1)(ii) unless specifically exempted as per any notification issued under sub-section (3) of section 139AA of the Act. It is also made clear that the returns being filed either electronically or manually cannot be filed without quoting the Aadhaar number.

Let’s take a quick look at the key changes in the Interim Budget from a personal tax perspective, which will be effective from 1 April 2019.

Changes in tax rebates

Earlier, there was a rebate available for individuals earning annual income up to Rs 3.5 lakh. The total income threshold is now increased to Rs 5 lakh p.a., resulting in an increase in the tax rebate from Rs 2,500 to Rs 12,500.

a) Change in standard deduction limit

Standard deduction has been increased from Rs 40,000 to Rs 50,000 for salaried individuals

b) Dilution in the concept of deemed to be let out property

The government has amended the law to provide relief to the taxpayer by allowing an option to claim NIL annual value in respect of any two houses declared as self-occupied, instead of one such house, as previously provided.

c) Capital gains on sale of residential house property

The law has been amended to extend the long-term capital gains exemption benefit even where the sale proceeds of a house property are invested for the purchase of two residential houses.

d) Increase in TDS limit on interest earned from banks

The threshold for deduction of tax at source on interest earned from banks and post office deposits has been increased from Rs 10,000 to Rs 40,000.

ACTIVE deadline extended, companies get time till June 15 to meet new disclosure norms

The government has extended the deadline for uploading photos of business premises to June 15, giving corporates more time to comply with a provision aimed at spotting shell companies. The disclosure norms, which came into effect from February, make it mandatory for registered companies to upload pictures of their business premises and at least one director. Read more here.