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.

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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) 

IIFL Home Loan opens first ‘Sammaan LAP’ branch at Laxmi Nagar, Delhi

Leading housing finance company, IIFL Home Finance Ltd. is looking to set new benchmarks in the country with its latest branch in New Delhi.

The new branch located at Laxmi Nagar will promote ‘Sammaan- Loan Against Property’, a specialized product by the company that allows customers to fund their financial requirements. This branch will cater to customers who are looking for a loan to fund requirements of starting a new business, meet long team working capital needs or simply fund education or marriage of children.

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‘Sammaan LAP’ allows customers to convert their moveable and immovable property into cash as per their financial requirements. The branch will offer loans of up to Rs.10 crores with a maximum tenure of up to 15 years. Customers can avail loans at flexible repayment options with minimum documentation and up to 65%(55%) of the market value of residential (commercial) property.

Speaking at the occasion, Mr. Vikas Kapoor, Regional Sales Manager, IIFL Home Finance Ltd. said, “With our latest branch in Laxmi Nagar, IIFL Home Loans has spread its presence to more than 100 branches across India. We want to take this as an opportunity to support customers who want to start their own small-scale business or fund education of children or small self-help groups planning to spread their business.  This branch will also provide balance transfer of loan against property along with an additional top-up”

The branch was inaugurated by Mr. Monu Ratra, CEO, IIFL Home Finance Ltd. amid the presence of other dignitaries and a large number of public.  IIFL Home Finance Ltd. received ‘Best Performing PLI under EWS/LIG – Second’ from Ministry of Housing and Urban Affairs, Govt. Of India at Transforming Urban Landscape event held in July this year.