Budget Highlights

Union Budget 2019

This document contains a brief overview of important direct

and indirect tax amendments proposed by Finance Minister in
his Union budget speech on 1st February.

Tax Team - V. A. Parikh & Associates LLP,

Chartered Accountants
V.A.Parikh & Associates LLP Budget Highlights 2019
Chartered Accountants

Direct Tax (Income Tax)

1. Rates of Tax
Particulars Existing Provisions Proposed changes Applicable
w.e.f
Basic Exemption Limits
(i) (Based on category of
Assessee) 1st April, 2019

For Individuals (Males Upto Rs. 2.5 lakh Nil

and Females), HUF, 2.5 lakh to Rs. 5 Lakh 5% NO CHANGE
AOP, BOI, Artificial 5 Lakh to 10 Lakh 20%
Juridical Person Above 10 Lakh 30%

For Senior Citizens Rs. 3,00,000/- Nil

(Individuals aged Rs. 3 Lakh to Rs. 5 Lakh 5%
between 60 years and Rs. 5 Lakh to Rs. 10 Lakh 20%
79 years) Above Rs. 10 Lakh 30%
NO CHANGE

Very Senior Citizens Rs. 5,00,000/- Nil

(Individuals having age Rs. 5 Lakh to Rs. 10 Lakh 20%
of 80 years and above) Above Rs. 10 Lakh 30%

Surcharge
For Individuals (Males Income above Rs. 50 lakhs - 10%
and Females), HUF, Income above Rs. 1 crore - 15 % NO CHANGE
AOP, BOI, Artificial
Juridical Person

Health and Education Education Cess - 2%

Cess Secondary & Higher Edu Cess - 1% Health and Education Cess 4%

Particulars Existing Provisions Proposed changes Applicable

w.e.f
(ii)Co-operative If Total Income exceeds Rs. 1 crore Upto Rs. 10,000 10% 1st April, 2019
Societies Surcharge @ 12% 10,000 to 20,000 20%
20,000 and above 30%

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V.A.Parikh & Associates LLP Budget Highlights 2019
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Surcharge Income above Rs. 1 crore – 12%

(iii)Partnership Firms, 1st April, 2019

LLP, Local Authority

Tax Rate 30%

Surcharge Income above Rs. 1 crore – 12% No Change

Health and Education Education Cess - 2% Health and Education Cess 4%

Cess Secondary & Higher Edu Cess - 1%

(iv)Domestic 1st April, 2019

Companies

(A)If Total Turnover or 25% of taxable income NO CHANGE

Gross Receipt in the F.Y.
2016-17 does not
exceed Rs. 250 crores.

(B)Other than that 30% of taxable income NO CHANGE

Surcharge for (A) and If Net Income exceeds Rs.1 crore but
(B) less than Rs. 10 crore Surcharge
@ 7%
NO CHANGE
If Net Income exceeds Rs.10 crore
Surcharge @ 12%

Education Cess - 2% Health and Education Cess 4%

Health and Education Secondary and Higher Education Cess
Cess - 1%

Particulars Existing Provisions Proposed changes Applicable

w.e.f
(vi) Other than 1st April, 2019
domestic companies

Tax Rate 40% In case of companies other than

domestic company on the
income received as:
(A) (a) royalties received from
Government or an
Indian concern

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V.A.Parikh & Associates LLP Budget Highlights 2019
Chartered Accountants

(b) fees for rendering

technical services received
from Government or an
Indian concern
and where such agreement has,
in either case, been made after
29th February, 1964 but before
01st April, 1976 and the same has
been approved by the Central
Government, then tax rates –
50%

(B) On the balance total income,

tax rate – 40%
Surcharge If Net Income exceeds Rs.1 crore
Surcharge @ 2%
NO CHANGE
If Net Income exceeds Rs.10 crore
Surcharge @ 5%

Health and Education

Education Cess - 2% Health and Education Cess 4%
Cess
Secondary and Higher Education Cess
- 1%

2. Full tax rebate for Individual taxpayers having taxable annual

income up to 5 lakhs

Particulars Existing Provisions Proposed changes Applicable

w.e.f
Rebate under section Rebate of Rs. 2,500/- for individual Rebate of Rs. 12,500/- for Individual 1st April,
87A resident assessee, whose Taxable Resident Assessee, whose Taxable 2019
income does not exceed Rs. income does not exceed Rs.
3,50,000/- 5,00,000/-

3. Standard Deduction for Salaried Person

Particulars Existing Provisions Proposed changes Applicable

w.e.f
Section 16 The standard deduction provided at The standard deduction provided at 1st April,
the time of computation of the the time of computation of the 2019
income from Salary is Rs. 40,000/-. income from Salary is Rs. 50,000/-.

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V.A.Parikh & Associates LLP Budget Highlights 2019
Chartered Accountants

4. Income from House Property

Particulars Existing Provisions Proposed Changes Applicabl

e w.e.f.
Section 23 (a) Where the number of Self- (a) Where the number of Self- 1st April,
occupies Properties (SOP) is more occupies Properties (SOP) is 2019
than one than the provisions of more than one than the
sub-section 2 shall apply only to provisions of sub-section 2 shall
one house i.e. the other properties apply to two house and the
shall be Deemed let out Properties other properties shall be
(DLOP). Deemed let out Properties
(DLOP).

(b) In case of real estate of real estate (b) In case of real estate of real
developers, where the building or
the land is held as stock-in-trade,
and if the property is not let-out
for one year after obtaining
completion certificate, then such
assesses are liable to tax on the
annual value of such property as
notional income.
estate developers, where the
building or the land is held as
stock-in-trade, and if the
property is not let-out for two
years after obtaining completion
certificate, then such assesses
are liable to tax on the annual
value of such property as
notional income.

5. Profit on sale of property used for residence

Particulars Existing Provisions Proposed Changes Applicabl

Section 54 In case of an Individual or HUF,
exemption is available on LTCG
arising from transfer of a residential
house if they utilize those funds to
acquire one residential house
provided they purchase the house
within one year before or two years
after such sale, or construct the
house within three years.
e w.e.f
As per the Finance Bill, 2019 if such 1st April,
LTCG does not exceed Rs. 2 crores 2019
then Individual or HUF has an option
to claim the exemption by utilizing
those funds to purchase two
residential houses within one year
before and two years after such sale,
or construct such houses within three
years.

The Assessee can exercise such an

option only once during his lifetime.

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V.A.Parikh & Associates LLP
Chartered Accountants
6. Deductions in respect of profits and gains from housing projects
Particulars Existing Provisions
Section 80-IBA Where the gross total income of an
assessee includes any profits and
gains derived from the business of
developing and building housing
projects, they shall be allowed a
deduction of an amount equal to
hundred per cent of the profits and
gains derived from such business
provided -
a) the project is approved by the
competent authority after the 1st
day of June, 2016, but on or
before the 31st day of March,
2019
7. Interest other than interest on securities
Particulars Existing Provisions.
Section 194A TDS on income from interest other
than interest from securities is not
liable to be deducted if the interest
income is paid by a banking
company, co-operative society or a
post office does not exceed Rs.
10,000 in a financial year.
8. TDS on Rental Income
Particulars Existing Provisions
Section 194-I TDS on rental income is not liable to
be deducted if the rental income is
does not exceed Rs. 1,80,000 in a
financial year.
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Budget Highlights 2019
Proposed Changes Applicable
w.e.f
Where the gross total income of an 1st April,
assessee includes any profits and 2019
gains derived from the business of
developing and building housing
projects, they shall be allowed a
deduction of an amount equal to
hundred per cent of the profits and
gains derived from such business
provided -
a) the project is approved by the
competent authority after the 1st
day of June, 2016, but on or
before the 31st day of March,
2020
Proposed Changes Applicabl
e w.e.f
TDS on income from interest other 1st April,
than interest from securities is not 2019
liable to be deducted if the interest
income is paid by a banking
company, co-operative society or a
post office does not exceed Rs.
40,000 in a financial year.
Proposed Changes Applicable
w.e.f.
TDS on rental income is not liable to 1st April,
be deducted if the rental income is 2019
does not exceed Rs. 2,40,000 in a
financial year.