In her Union Budget speech on July 5, Union Finance Minister Nirmala Sitharaman announced that the tax levied on the highest income earners in the country will be increased. Though she kept the tax slabs unchanged, several announcements concerning taxpayers were made in the budget for the fiscal year 2019-20.
TDS on cash withdrawal of more than a crore
Finance Minister Nirmala Sitharaman announced a TDS (tax deducted at source) of 2 per cent will be charged on cash withdrawal of more than Rs 1 crore from a bank account. The move was announced as a bid to curb the money transaction by companies.
Surcharge on earning between Rs 2 crore and Rs crore
While presenting her maiden Union Budget for the financial year 2019-20, Sitharaman did not announce any changes in the income tax slabs, but she increase the surcharge on those earning between Rs 2 crore and Rs 5 crore and above of 3 per cent and 7 per cent, respectively.
Tax subsidy on loans for electric vehicle
In a move considered to encourage electric mobility in the country, a tax subsidy of Rs 1.5 lakh was also announced for taxpayers taking loans to buy electric vehicles.
Deduction on affordable housing loans interest
The Modi-led government in its budget proposed an additional Rs 1.5 lakh deduction on interest paid for affordable housing loans of up to Rs 45 lakh. The proposed move is only for the loans availed before March 2020.
Reduction in rates of corporate tax
Finance Minister Nirmala Sitharaman in her budget speech also announced a phased reduction in the rates of corporate tax. Sitharaman announced to extend the benefit of lower corporate tax of 25 per cent to companies with annual turnover of up to Rs 400 crore.
No scrutiny for startups
Delivering her maiden Budget speech, Sitharaman announced that startup and their investors who file requisite declarations and provide information in their returns will not be subjected to any kind of income tax scrutiny over the valuations of their share premiums.