By Julfesh Shah:
As we started our journey into the new financial year, i.e. financial year 2019-20, it will be helpful for all the stakeholders to know about the changes in some of the provisions of law. Government had made various changes under Income-Tax Law, GST and Corporate Laws which are applicable from April 1, 2019. Some of the salient features are as under: Income Tax:
1) Section 87A rebate: The amount of tax rebate under Section 87A has been increased from Rs 2,500 to Rs 12,500. Further, it shall be available to a resident individual whose total income does not exceed Rs 5,00,000. 2) Standard deduction from salary: The limit of standard deduction for the salaried class taxpayers has been increased from Rs 40,000 to Rs 50,000.
3) No deemed rental income on having two residential house properties: If an individual owns more than one self-occupied house property then only one house property as per his choice is treated as self-occupied and its annual value is computed as nil. The other house property is deemed to be let-out as per section 23 and a notional rent is computed and charged to tax under the head ‘Income from House Property.’ Section 23 has been amended with effect from April 1, 2019 to provide relief to the taxpayers by allowing them an option to claim nil annual value in respect of any two houses declared as self-occupied.
4) Section 54 relief extended to 2 residential houses: Any long-term capital gains, arising to an individual or HUF, from the sale of residential house property is exempted to the extent such capital gains are invested in another residential house property. The taxpayer is allowed to invest only in one residential house in India to claim section 54 relief. From FY 2019-20, an assessee shall be able to claim exemption under section 54 even if he invests in two residential houses in India. However, this benefit shall be available where the amount of the capital gain does not exceed two crore rupees. Further, if the assessee exercises this option, he shall not be subsequently entitled to exercise the option for the same or any other assessment year, i.e. the assessee can exercise this option only once in a lifetime.
5) TDS on interest income: Section 194A deals with deduction of TDS on interest income other than interest on securities like interest on fixed deposits. Section 194A has been amended to ease the burden of compliance by way of increasing the threshold limit from Rs 10,000 to Rs 40,000 for deduction of tax at source on interest income, other than interest on securities, paid by a banking company, co-operative society or a post office.
6) TDS on rental income: The threshold limit for deduction of tax at source under section 194-I on rental income has been increased from Rs 1,80,000 to Rs 2,40,000. GST:
1) A new scheme has recently been introduced wherein an Intra-State supplier can now pay GST at the rate of 6% (3% for Central and 3% for respective State) on first supplies of goods/ services for Rs 50 lakh. W.e.f April 1, 2019, the benefit of this scheme can be availed. This scheme shall be available only if the aggregate turnover of supplier does not exceed Rs 50 lakh during the previous financial year. The benefit of this scheme shall not be available to service providers rendering services in multiple states or through e-commerce websites.
2) The existing threshold limit on gross turnover in previous financial year to avail of the Composition Scheme has been increased from Rs 1 crore to Rs 1. 5 crore. In respect of special category States (North-Eastern States), the threshold limit has been increased from Rs 50 lakh to Rs 75 lakh. Consequently, the taxable persons can substantially reduce their compliance burden as they would be required to file GST returns on quarterly basis instead of monthly basis.
3) As per Section 23 of the CGST Act, every person is required to obtain the GST registration if his turnover from supply of goods or services exceeds Rs 20 lakh. This threshold limit has been increased to Rs 40 lakh only if supplier is engaged in supply of goods. In other words, any person who is engaged in supply of goods and his total turnover in the current financial year does not exceed Rs 40 lakh, he is not required to take registration under GST. This exemption from GST registration is subject to various conditions, inter alia, he is not making any Inter-State supply, he is not a non-resident taxable person, etc.
4) The due dates for filing of GSTR-1 and GSTR-3B for the months of April, May and June of 2019 have been notified, which shall be as follows: In case of GSTR-1: if the turnover of registered person is upto Rs 1.50 crore for the period April -June, 2019, he shall file his GSTR-1 on a quarterly basis and the due date shall be July 31, 2019. And if the turnover of registered person exceeds Rs1.50 crore for the period April -June, 2019, he shall file his GSTR-1 on a monthly basis and the due date shall be 11th of the succeeding month. In case of GSTR-3B: Form GSTR-3B shall be filed on a monthly basis by every tax payer who is required to file GSTR-3B and due date shall be 20th of the succeeding month. (The author is a practising chartered accountant and former Vice-Chairman of WIRC of ICAI)