FINANCE (No.2) BILL, 2019
PROVISIONS RELATING TO DIRECT TAXES & RELATED LAWS
The provisions of Finance (No. 2) Bill, 2019 relating to direct taxes seek to amend the Income-tax Act, 1961 (hereafter referred to as the Act), to continue to provide momentum to the buoyancy in direct taxes through deepening and widening of the tax base, promoting less cash economy, reducing the corporate tax rate for small enterprises, strengthening anti-abuse measures providing tax incentives, removing difficulties of taxpayers and enhancing the effectiveness of the tax administration.
With a view to achieving the above, the various proposals for amendments are organised under the following heads:
(A) Rates of income-tax
(B) Widening and deepening of tax base
(C) Measures for promoting less cash economy
(D) Tax incentives
(E) Facilitating resolution of distressed companies
(F) Improving effectiveness of tax administration
(G) Strengthening anti-abuse measures
(H) Removing difficulties faced by taxpayers
(I) Rationalisation of provisions
A. RATES OF INCOME-TAX
I. Rates of income-tax in respect of income liable to tax for the assessment year 2019-20.
In respect of income of all categories of assessees liable to tax for the assessment year 2019-20, the rates of income-tax have
been specified in Part I of the First Schedule to the Bill. These are the same as those laid down in Part III of the First Schedule
to the Finance Act, 2018 for the purposes of computation of “advance tax”, deduction of tax at source from “Salaries” and charging
of tax payable in certain cases.
(1) Surcharge on income-tax
The amount of income-tax shall be increased by a surcharge for the purposes of the Union,—
(a) in the case of every individual or Hindu undivided family or every association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Act, -
(i) at the rate of ten per cent. of such tax, where the income or the aggregate of income paid or likely to be paid and subject to deduction exceeds fifty lakh rupees but does not exceed one crore rupees, and
(ii) at the rate of fifteen per cent. of such tax, where the income or the aggregate of income paid or likely to be paid and subject to deduction exceeds one crore rupees;
(iii) surcharge will also be levied at the appropriate rates in cases where these persons are liable to tax under section115JC of the Act.
(b) in the case of cooperative societies, firms or local authorities having total income exceeding one crore rupees, surcharge will be levied at the rate of twelve percent. of income-tax payable on total income. In the case where such persons are having total income chargeable to tax under section 115JC of the Act, and such income exceeds one crore rupees, surcharge at the rate of twelve percent. shall be levied.
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