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India: Tax proposals in Union Budget 2019

India: Tax proposals in Union Budget 2019

The Union Budget 2019 includes certain tax measures.


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  • The budget does not propose any changes to the rates of individual (personal) income tax, but proposes to impose additional surcharges on the “super rich.”
  • The budget also seeks to foster growth in various sectors including housing, start-ups, and electric vehicles sectors.
  • The budget proposed to bring under the 25% rate those companies with an annual turnover of up to INR400 crore (increased from INR250 crore).
  • The budget proposes to resolve the “angel tax issue” by providing relief to start-ups and stakeholders by proposing to introduce a mechanism to steer clear of regular scrutiny assessments and also proposes to relax the loss carryforward and setoff rules.
  • The provisions to allow a carryforward and set off of past losses are also proposed to be relaxed to safeguard losses of companies in situations when there is a change in shareholding and directorship.
  • The budget allows taxpayers to use interchangeably certain electronic processes (PAN and Aadhaar) for filing of income tax returns.
  • The budget proposes to improve governance by introducing pre-filled tax returns that would make available information from salaries, bank interest, capital gain, and dividend income.
  • To address certain practices of tax officers, a centralised “faceless” electronic scrutiny assessment would be launched in a phased-in manner.
  • To reduce the compliance burden under goods and services tax (GST) measures (such as the single monthly return), the budget proposes fully automated refund for export of services, a process to issue refunds by single authority, implementation of e-invoicing from 1 January 2020. The use of e-invoicing would result in pre-filled taxpayer returns and would eliminate the need for generation of e-way bills, resulting in reduction in data collection points by the government.
  • New simplification measures would be introduced such as relaxed rules concerning the facility to transfer an amount from one head to another head in electronic cash ledgers; a new composition scheme for suppliers of services or mixed suppliers; the charging of interest on net cash tax liability; higher threshold exemption limits.
  • To foster consistency in tax positions under the GST regime, the budget proposes the creation of a national appellate authority for advance rulings.
  • Customs duties on various products would be increased.
  • The budget proposes to encourage the closure of existing litigation of past tax disputes, with a waiver of 40% to 70% of the amount of disputed tax.

Read a July 2019 report [PDF 550 KB] prepared by the KPMG member firm in India

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