Union Budget 2019: Major Key Changes On Filing Income Tax Return

The year 2019 has seen the central government present the Union Budget twice. The interim budget was presented in February, and after its sweeping victory in the general elections, the BJP-led government presented the full budget on July 5.

Both budgets had some income tax-related announcements that can impact your personal finances. A lot of the announcements made by interim finance minister Piyush Goyal in February have come into effect, while the budget proposals announced by finance minister Nirmala Sitharaman are yet to come into effect as these are yet to be passed by the Parliament.

Here are some of the key changes in the rules on filing of income tax returns announced in Budget 2019:

    • The government proposed to make the filing of return compulsory in the following cases:
      • People who deposit more than Rs. 1 crore in a current account in a year
      • People who spend more than Rs. 2 lakh on foreign travel in a year
      • People who spend more than Rs. 1 lakh on electricity in a year
      • People who claim capital a capital gain exemption (under Section 54/54F) that brings them within the exemption limit.
      • The government also announced Rs. 1.5 lakh income tax deduction on interest paid on loans for the purchase of electric vehicles.
  • The government announced “interchangeability of PAN and Aadhaar”. Those who do not have PAN will be able to file income tax returns by using their Aaddhar number. It will also be accepted instead of PAN under the Income Tax Act.
  • The government has proposed to make the PAN allotted to a person who fails to intimate the Aadhaar number within a notified date inoperative. Currently, the Income Tax Act provides for making PAN invalid if it is not linked with Aadhaar within a notified date.
  • The government increased income tax surcharge for HNIs (high net worth individuals) earning more than Rs 2 crore in a year.
  • Those earning between Rs 2-5 Crore will have shell out 3% more, with surcharge rate being increased from 15% to 25%.
  • Those earning above Rs 5 crore will have to shell out a surcharge of 37%, from the current 15%.
  • The government proposed that persons who enter into certain high-value transactions have to mandatorily file their tax returns even if their taxable limit is less than Rs 2.5 lakh.
  • The transactions include depositing an amount exceeding Rs 1 crore or more current accounts; has incurred an expenditure of more than Rs 2 lakh for himself or any other person for travel to a foreign country; or has incurred an expenditure of an amount or aggregate of the amounts exceeding Rs 1 lakh towards consumption of electricity.

Categories: Economy, Finance and Banking

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