Budget 2020

Union Budget 2020

In order to provide significant relief to the individual taxpayers and to simplify the Income-tax law, I propose to bring a new and simplified personal income tax regime wherein income tax rates will be significantly reduced for the individual taxpayers who forgo certain deductions and exemptions," Finance Minister Nirmala Sitharaman said in her Budget 2020 speech as she proposed new income tax rates and slabs for those forgoing exemptions and deductions.

The new tax rates will be optional. Instead of actually simplifying, tax experts say that the dual tax rates might create confusion for individuals since they will have to calculate tax under both the regimes to see which is more beneficial.

Further, an individual will have an option to switch between the two rates on a year to year basis. But those with business income can only chose to switch once. These new income tax related proposals will come into effect from financial year 2020-21.

Direct Tax Amendments

Income (Rs)	Old Tax Rate (option 1)	New Tax Rate (option 2)
2,50,000	NIL	NIl
2.50.000 – 5.00.000	5 %	5 %
5,00,000 – 7.50.000	20 %	10 %
7,50,000 – 10,00,000	20 %	15 %
10,00,000 – 12,50,000	30 %	20  %
12,50,000 – 15,00,000	30 %	25  %
Above 15,00,000	30 %	30 %

New Slab rate is available for salary class and without having any deduction like insurance, PPF, child education, home loan interest etc.

Income (Rs)	Old Tax Liabilities (option 1) Assumption Rs 2,00,000 as Deduction 80 c and 80D and others. And Rs 50000 as standard deduction	New Tax Liabilities  (option 2) No Deduction is allowed
2,50,000	NIL	Nil
5.00.000	NIL	12.500
7.50.000	12,500	37,500
10,00,000	62,500	75,000
12,50,000	1,12,500	1,25,000
15,00,000	1,87,500	1,87,500
20,00,000	3,37,500	3,25,000

Above calculation on assumption for investment, and  Without levied surcharge and education tax.

Other Amendments

Ø  NRI will have to pay tax (Indian person who are outside India has to file ITR in India and disclose all income)

Ø  DDT is abolished but not in actual term: Dividend Distribution Tax is abolished and government is loss of Rs 25,000 corore loss as bale in hand of corporate but taxable in hand individuals.  (In our opinion minimum 20% or higher slab person investing into shares and got divided. As governments is claiming loss of DDT of Rs 25,000 crore as loose 18% DDT but governments will received tax at least 20% or higher rate so there is no loss of revenue. As per our opinion collect regarding Dividend will be higher from present scenario).

Ø  Unproductive land will be used for solar plant so it’s good news for land owner and power sector

Ø  Solar company is also charged with 15% if it is setup new company after 1^st oct 2019.

Ø  who invest in share and earn dividend  

Ø  Vivad se viswas scheme is for Income Tax and pay only principle amount if payments are made on or before 31^st March 2020.

Ø  Tax Audit Limit: Income tax audit limit increased to Rs. 5 Crores for those businesses who have less than 5% cash business.

Ø  Income from Foreign Sovereign Wealth Fund in India has been exempted for investments made till 2024 for a period of 3 years.

Ø  Taxation of ESOPs deferred to 5 years from date of exercising of option, sale of shares or leaving the company, whichever is earlier.

Ø  Startup Tax Incentive: Tax holiday available to startups extended to startups having turnover upto Rs. 100 Crores from the current limit of Rs. 25 Crores. Tax holiday extended to 10 years from 7 years

Ø  Tax on cooperative  Society: Tax rate of cooperative societies reduced to 22% plus 10% surcharge

Ø  Additional housing loan interest: Additional Interest deduction of 1.5 lakhs available to buyers of affordable houses now available for loans sanctioned up to March 31, 2021 (from earlier date of March 31, 2020)

Ø  Tax Holiday for Builders: Tax holiday of developers of affordable housing extended by another one year up to March 31, 2021.

Ø  Capital gain: Difference in value allowed up to 10% of stamp duty value for sale or purchase of immovable property.

Ø  For the purpose of determining residential status, the number of days for stay in India will be 120 days as against 182 days.

Ø  Residential Status: For Resident but not ordinary resident now test will be of nonresident in 7 out of 10 preceding years as against present condition of 9 out of 10 preceding years.

Ø  TCS Rate: TCS at the rate of 0.1% will be applicable on sale of goods if total sales to one person is more than Rs 50 lakhs by a person having turnover of more than Rs 10 crore.

Ø  TCS in foreign remittance under LRS exceeding Rs 7.00 lakh at the rate of 5%. Also on oversea tour package &5%.

Ø  TDS on ecommerce: TDS on e-commerce payment to e commerce participant at the rate of 1%

Ø  TDS on FTS  reduced under section 194J to 2%

Ø  12A and 80G for NGO: Charitable Trust Registration and 80 G exemption to be for 5 years. All existing trust to apply again (Its painful for trust and trustee for re apply and question mark on transparency )

Ø  80G: 80 G exemption holders to submit annual statement of donation received. Failure to submit such statement fee of Rs 200 per day for each day of default under section271G and penalty of Rs 10000 to Rs 1.00 laky under new section 271J.

Ø  Penalty for false entry of invoice or omitted invoice @100% of such transactions under new section 271AAD

Ø  LIC and IDBI disinvestments

Ø  Sensex open at 40,753 and closed at 39,735

Impact on goods due to budget

Costlier	Cheaper
Cigarettes, Tobacco	News Print
Imported Refined Veg oil, Ghee,	Light weight coated paper
Imported PCBA for Mobile	Sport Goods
Footwear	Finger print reader
Furniture	Domestic Mobile manufactured
Fans
Table Ware/ Kitchen wear or china ceramic
Imported Household items

Amount tracking for budget (Assumption Rs 1)

Paisa	Receiving		Paisa	Allocation
20 p	Loan (Borrowing)		6 p	Pension
18 p	Corporation Tax		6 p	Subsidies
18 p	GST		8 p	Defence
17 p	Income Tax		22 p	Center scheme
10 p	Non Tax Revenue		10 p	Other Expenditure
7 p	Excise duty		10 p	Finance commission
6 p	Non debt capital receipts		18 p	Interest
4 p	Custom		20 p	State Share for tax and revenue
100 p			100 p

All information is base on budget and other reliable source.

Manish Kumar Sinha

Due Date to file GSTR 1 is 10th Jan 2020 to avoid Late Fee

Due Date to file GSTR 1 is 10^th Jan 2020 to avoid Late Fee

All GST register person has to file GSRT 3B and GSTR 1. GSTR 3B is for monthly cumulative sale and payments of taxes whereas GSTR 1 is file bill wise details return and all issued invoice to vendor/ party  on monthly or quarterly basis.

If Registered GST business person does not file GSTR 1 on or before 10^th Jan 2020, they have to face following business challenge:

Ø  E way Bill: They are not able to generate E-Way Bill

Ø  Penalty: GST register person has to pay penalty for non filing GSTR 1 and maximum penalty will be Rs 10,000 per month.

Ø  Input Credit: You will be eligible for GST input only for those purchased bill by you if your supplier has file GSTR 1 on or before 10^th Jan 2020.

Cross Business Boundary in Year 2020

HAPPY NEW YEAR 2020

Enjoy year 2020 and play on front-foot in your business and life as in 20-20 format of cricket to achieve success within short-span.

Now’s Time to Cross Your Business Boundary

New Year brings new resolutions and inspires us to work hard and act smart.

Everyone has own boundary to dream and they work accordingly. All of us have dreams but we limit as per present market and cash- liquidity scenario.

A small shopkeeper having turnover of Rs 50,000 per month or Rs 6,00,000 per year cannot dream of having turnover of 10 Crore. They just think to increase their turnover by 20% to 50% and they become happy if it’s achieved. They Never think about Franchise model and multi brand under one roof like BATA, Liberty, Croma, Reliance Digital etc.

We all must understand the value of dreaming and create functional road map to achieve our dream. Everyone should have dream and we all should work towards fulfillment of such dreams.

We have a live example of  श्री Dhirubhai  Ambani :-  who started a job at Petrol pump but always dream Big & became the richest person of India before his death in 2002...WHY ?   Because Dhirubhai  Ambani had crossed business boundary through his vision.

All of us can achieve the same success if we follow process of business success system.

Process to make your business succeed

Ø Vision

Ø Effective Communication

Ø Business System

Ø Action Plan & Strategy

Ø Implementation and Execution

Ø Stay Focused

Ø SWOT/PEST  Analysis

GST Audit

When GST registration is required: Business having turnover more than 40 L in year in trading and manufacturing, require to get registration in GST whereas 20 L limit is available for service provider to get GST registration since 1^st April 2019.  

When GST Audit is required: As per Section 35 of GST Act, GST audit is compulsory audit and based on turnover like Tax audit. Every registered GST business owner having turnover exceeding Rs 2 Cr during year is required to get GST audit by CA or Cost Accountants.

To start GST Audit, auditors require various documents to complete GST Audit. Following Documents are required for GST Audit

Ø  Sales Invoices

Ø  Purchase and other service invoices

Ø  GST Input Register

Ø  GST 3B

Ø  GST 1

Ø  GST 9A

Ø  HSN wise summary for sale and purchase

Ø  Ledger of reverse charge

Ø  Debit and credit note file

Ø  Bank Statements

Ø  Financial Statements

Ø  ITR

Necessary Steps GST Audit:

Step 1: Reconciliation of GST 3B with GST 1

Step 2: Reconciliation with GST 3B, GST 1 with financial statements for year

Step 3: Checking of GST input weather it is eligible for input or not

Step 4: Reconciliation with payments of debtors or creditors as payments is required to pay within 180 days from date of invoice

Who can be GST Auditors?

As per GST ACT, CA or cost Accountants can be GST auditors for any firm or company. Its suggestion to every business owner to engaged as GST auditors other than statutory auditors or regular consultant who is engaged in GST filling etc.

Other Independents Auditors can audit with different angel and provide best of result which will be beneficial for business. Example: Company has taken input of hotel, Car etc which is not allowed as per GST Act.

It’s better to identify such input and pay GST amount to departments before they will identified and levy penalty.

June Date with Departments

 Business Compliance Calendar 2019

For the Month of June 2019

Due Date	Purpose	Period	Description	Penalty
GST COMPLIANCE
10th June 2019	GSTR 8	May  2019	TCS Return in GST	Rs.50 Per Day
11th June 2019	GSTR 1( Monthly)	May  2019	Details  of outward Supplies where Turnover  exceeds Rs. 1.5 Crore	Rs. 50 per Day
20th June2019	GSTR 3 B	May 2019	Summary of outward supplies, ITC claimed and net tax payable	Rs. 50 per Day
30th June 2019	GSTR 9	July 2017 to March 2018	Annual Return
PF/ESIC COMPLIANCE
15th June 2019	PF/ESI	May 2019	Depositing Contribution towards PF/ESI	Delay Upto 2 months-5% From 2 months to 4 months-10%
TDS  and  ROC COMPLIANCE
07th June 2019	TDS /TCS Payment	May 2019	Depositing TDS/TCS liability under income tax Act	1.5% P.M.
15th June 2019	Advance Tax	April to June	1st Installment of advance tax
15th June 2019	INC 22A	YEARLY	Company KYC	10000

By MAP and Co

CA Manish Kumar Sinha