Key Changes to watch for the New Financial Year 2019-2020

Being an election year, 2019-20 is going to be a big year for taxpayers. Many tax sops have been announced by the government both under Income tax and GST – which greatly helps in reducing your tax outgo if planned effectively.

WhatsApp Image 2019-06-10 at 5.22.40 PM

So we bring you all the key changes you need to be aware of so you could meticulously plan for your taxes this year. 

For Individuals

1. Income tax rebate has been increased to Rs. 12,500/- from Rs. 2500/-. Which means effectively there is no tax upto a taxable income of Rs. 5 lacs p.a.

2. Last year the government announced a standard deduction of Rs. 40,000 for all salaried employees. From this year, it will increase to Rs. 50,000. Which means a flat Rs. 50,000 can be claimed as a deduction, without providing any additional proof for the same.

3. If you own two houses, there is no deemed income on the second house from this year on. Earlier, when two houses are owned, the second house was deemed as a let out property, and notional rent was charged to tax. However, from this year on, you can effectively claim 2 houses as Self-occupied properties.

4. Banks and other financial institutions need not deduct TDS while paying interest to upto Rs. 40000/- per annum. (Earlier they used to deduct when interest crosses Rs. 10,000 per annum)

5. The dream of owning a house may come true for many this year. The government has reduced the GST rates on affordable houses to 1% and other houses to 5%. (Earlier it was 18% on all houses)

For Businesses

1. A big relief from Angel tax

Earlier premium collected by companies on the issue of shares was taxable unless the fair value of those shares were estimated by a Merchant banker. As a big relief for start-ups, the government has exempted Start-ups Registered under Start-up India exempt from this, if a specific application is made.

Further, the government has widened the scope of the definition of start-up to include companies operating for 10 years (earlier 7 years), and with an annual turnover not exceeding Rs.100 crore (earlier 25 crores)

2. Big relief to MSME companies

As a big relief to MSME companies, mandatory registration for GST is applicable only when turnover exceeds Rs. 40 lacs, in case, if an entity is dealing with goods. (Earlier it was Rs. 20 lacs in many states, and Rs. 10 Lacs in northeastern states).

However, entities providing services should continue to get registered if turnover exceeds Rs. 20 lacs.

3. Composition scheme 

Composition scheme is now open for small service providers too. Earlier composition scheme was available only for manufacturers and traders, where they can charge 1% GST without taking an input tax credit. 

Now, for the benefit of small service providers, the government has opened this composition scheme for the service providers, where they can charge only 6% GST without taking an input tax credit. However, annual turnover from services in the previous year should be less than 50 lacs to opt for this scheme. 

 

(The author of this article is Mr Hrishikesh Datar, CEO, Vakilsearch) 

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Maharashtra Government signs MoU with IIFL Home Finance Ltd.

IIFL Home Finance Ltd. (IIFL HFL), India’s leading housing finance company on Wednesday signed a Memorandum of Understanding (MoU) with the State Government of Maharashtra. This MoUfocuses on extending the benefits of Credit Linked Subsidy Schemes (CLSS) under PMAY across state of Maharashtra to home buyers belonging to affordable housing segment.

Pic-IIFL Signs MoU with Maha Govt

The MoU was signed in the presence of Sanjay Kumar (Addn. Chief Secretary, Housing Deptt, Govt. of Maharashtra), Hemkumar Gopalakrishnan (Regional Manager, NHB), Monu Ratra(CEO,IIFL HFL), Ajay Jaiswal (IIFL HFL) and Sundeep Bhatia (IIFL HFL).Through this MoU, Housing Department of Government of Maharashtra will make provisions and facilitate permissions for IIFL HFL to educate customers and enlighten them about the benefits of PMAY. Under the agreed terms and conditions, IIFL HFL will be able to conduct on the spot counseling for home buyers visiting its branches, give presentations to defined audiences and proactively call potential customers tofacilitate home loans helping them avail CLSS subsidy benefits.

Monu Ratra, CEO, IIFL Home Finance Ltd. said “We are committed to support Hon’ble Prime Minister’s vision of ‘Housing for All by 2022’. We thank the Government of Maharashtra for giving us this opportunity to educate and enable customers in availing CLSS subsidy under PMAY. Witha network of over 10 HFC and over 150 NBFC branches located across the state, this MoU with the Government would allow us to facilitate benefits of Pradhan Mantri Awas Yojana among the affordable housing segment of home buyers”

IIFL HFL has been one of the leaders in CLSS scheme working towards financial inclusion with customized product such as ‘Swaraj Home Loan’. For its continued support in helping beneficiary families avail benefits of CLSS Subsidy under PMAY, IIFL HFL has twice received the award for ‘Best Performing PLI under Credit Linked Subsidy Scheme for EWS/LIG under Pradhan Mantri Awas Yojana’ from Ministry of Housing and Urban Affairs.

The company was recently in news for touching 23,500+ beneficiary family mark in CLSS subsidy distribution under PMAY. In the state of Maharashtra alone, IIFL HFL has approved home loans of Rs. 1000+ crore under PMAY (Urban) CLSS scheme. Till date the company has supported more than 6800 beneficiary families in the State to avail CLSS subsidy amounting more than Rs. 160 crores under PMAY.

Across India, till the month ended January 31, 2019, IIFL HFL has approved home loans of up to Rs. 3300+ crores under PMAY (Urban) CLSS scheme to beneficiary families belonging to EWS/LIG/MIG category. More than 23500+ beneficiaries have been benefited by the subsidy scheme providing Rs. 535+ crores as subsidy under PMAY. 

The average ticket size for loan amount disbursed to customers under this scheme is Rs. 14 lacs in case of EWS/LIG. IIFL HFL has made exceptional growth in terms of beneficiary numbers and CLSS subsidy disbursement under PMAY-Urban. Since the launch of the scheme in 2015, CLSS beneficiary numbers of IIFL HFL have grown from 65 in FY 2015-16 to 23,500+ till Jan ’31, 2019.