Parliament Passes Finance Bill, 2020 Without Discussion; House Adjourned Sine Die

The Lok Sabha on Monday passed the Finance Bill, 2020, with amendments, by voice vote. After that, the bill was presented in the Rajya Sabha, which returned the same without consideration. This effectively means that the Bill has been cleared by the Parliament.Both the houses adjourned sine die after the passing of the Bill. The Bill was passed without any discussion after the leaders of parties decided so, in light of the urgent need to adjourn the house due to impending threat of COVID-19 pandemic. The Bill, moved by Finance Minister Nirmala Sitharaman will give effect to the financial proposals made by the Central Government in Union Budget 2020, for the financial year 2020-21. These include enforcement of revised personal income tax rates for those who do not avail of any tax incentives. @nsitharaman says presently Income Tax Act is 'Riddled' with various exemptions. Impossible for tax payers to file return without professional assistance.Proposes bring a new 'simplified' personal income tax regime.#Budget2020— Live Law (@LiveLawIndia) February 1, 2020 The Bill also expands the benefit of the reduced corporate tax rate of 15%, as offered to new domestic manufacturing companies, to the domestic companies engaged in power generation. Inter alia, the Bill changes the definition of 'Resident', as stipulated under the Income Tax Act. Presently, a person is considered a resident of India, i.e. their global income is taxable in India, if they are in India for more than 182 days. This has been reduced to 120 days. The amended Bill now provides that the lower 120 day rule will not apply if the Indian-sourced income of such persons is less than ₹15 lakh in the relevant financial yearThis amendment to Section 6 of the Income Tax Act had led to concerns that it will adversely affect the earnings of genuine NRIs.After these proposals on NRI tax created a controversy, the Finance Ministry had issued a clarification on February 2 that the new provision is not intended to include in tax net those Indian citizens who are bonafide workers in other countries. "In order to avoid any misinterpretation, it is clarified that in case of an Indian citizen who becomes deemed resident of India under this proposed provision, income earned outside India by him shall not be taxed in India unless it is derived from an Indian business or profession", the Ministry said.Though one opposition member insisted on discussion on these proposals on Monday, Speaker Om Birla went ahead with the voice-vote, after the Minister informed that government had held a discussion with all party leaders to pass the bill without discussion.RSP's NK Premchandran objects; says we are being asked to clear a Bill which makes 41 amendments to the IT Act, 1961, without any discussion (due to #CoronavirusOutbreakindia )#LokSabha #finance #incometax— Live Law (@LiveLawIndia) March 23, 2020 Other salient features of the Bill include: Dividend Distribution Tax The Bill removes the liability of companies to pay a tax of 15% on dividends distributed by it to its shareholders. The same will now be taxable in the hands of the recipient, under the dividend income head. TDS on e-commerce transactions TDS of 1% will be levied on e-commerce transactions. Housing incentives Currently, an exemption is provided on profits or gains arising out of building affordable houses if the project was approved by March 31, 2020. Further, an additional tax deduction of up to Rs 1,50,000 is provided on interest paid on loans for self-occupied house owners if the loan was sanctioned by March 31, 2020. The deadline in both cases has been extended to March 31, 2021. Excise & Customs The Central excise duty imposed on tobacco products has been increased. For instance, duty levied on chewing tobacco has been increased from 10% to 25% per kg. Customs duty on items such as tableware and kitchenware, footwear, fans, and toys have also been increased. Health cess A health cess will be levied (in addition to customs duty) on import of certain medical devices, such as X-ray machines. This cess may be utilized for the financing of health infrastructure and services. Obligations on charities Charitable organisations get an exemption from taxation under Section 12AA, and donations to them get exemptions under Sections 10(23C), 35, and 80G. From now, the approvals under these sections will be valid for a maximum of five years. Any entity having these approvals has to get them re-issued. Indian Stamp Act, 1899 Stamp duty will not be charged in the case of transactions in stock exchanges and depositories established in international financial centers set up under the Special Economic Zones Act, 2005. Sovereign wealth funds Income arising out of investments made by notified sovereign wealth funds in certain infrastructure facilities will be given 100% tax exemption if the investment is made...

Parliament Passes Finance Bill, 2020 Without Discussion; House Adjourned Sine Die

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Parliament Passes Finance Bill, 2020 Without Discussion; House Adjourned Sine Die

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