8,549.15465.35
Stock Analysis, IPO, Mutual Funds, Bonds & More

Taxpayer, investor, consumer: Who won and who lost in Budget 2020?

Dividends will now be taxed in hands of recipient taxpayer. Rich shareholders will pay tax at 30% plus surcharge and cess, as opposed to 10% on dividend income exceeding Rs 10 lakh. Here's what happened to other categories of income earners.

TNN|
Last Updated: Feb 02, 2020, 02.01 PM IST
0Comments
Getty Images
coplanreteq
Tax holiday benefit for eligible developers of affordable housing projects extended 1 year.
For taxpayers
Winner: ‘Simplified’ income tax regime at concessional rates introduced. But each taxpayer will have to do the math to figure out if she gains or loses.

  • Employees offered ESOPs will not have to pay tax on allotment (exercise). Tax incidence will arise on completion of 5 years from allotment of shares, or termination of employment, or sale of such shares, whichever is earlier. Capital gains will still be payable on sale
  • A donor can get deduction ranging from 50% to 100% of donation made to a charitable institution, but only if the latter has furnished the details of donations received to the income tax authorities
  • New scheme of e-appeals and e-penalty to be introduced on lines of e-assessments for greater efficiency and transparency
  • Taxpayers’ charter to be introduced to save taxpayers from harassment. PAN to be allotted instantly via Aadhaar

Loser: Indian citizen not liable to pay tax in any other country to be deemed tax resident in India and pay tax on global income

For investors
Winner: Deduction of Rs 1.5 lakh for interest on loan to purchase affordable residential house now extended to loans sanctioned from Apr 1, 2020-Mar 31, 2021 (against earlier end date of March 31, 2020)

  • No adjustment to sale consideration on transfer of immovable property where variation between stamp duty value and sale consideration is not more than 10% of latter (against the earlier 5%)
Loser: Dividends will now be taxed in hands of recipient taxpayer. Rich shareholders will pay tax at 30% plus surcharge and cess, as opposed to 10% on dividend income exceeding Rs 10 lakh.

  • Employer’s contribution to PF, NPS and Superannuation Fund exceeding Rs 7.5L/yr to be taxable as salary in employee’s hands.

For businessmen

Winner: No DDT to be paid by companies on distribution of profits to the shareholders.

  • Tax holiday benefit for eligible developers of affordable housing projects extended 1 year.
  • Beneficial tax rate of 5% on interest on external commercial borrowings/rupeedenominated bonds extended 3 years.
  • New dispute resolution scheme to be introduced allowing settlement by waiving interest and penalty upon payment of only disputed tax till March 31, 2020.
  • Simplified GST returns from April 1, 2020; e-invoicing to be introduced in phased manner starting Feb 2020 on optional basis

Loser: ITAT may grant stay of demand only upon deposit of not less than 20% of the disputed demand. Further, the period of stay can in no case exceed 365 days.

  • 5% health cess to be imposed on import of specified medical devices in a bid to encourage their production locally.

For consumers
Winner: System to be introduced to provide a cash reward to those consumers who obtain invoices from their suppliers. Modalities to be spelled out later.

Loser: Increase in customs duties on electric motor vehicles from April 2020. Increase in duties on import of footwear, furniture, dairy products, kitchenware, household products and certain electronics effective from today.
Click here for all the information and analysis you need for tax-saving this financial year

Also Read

Pharma attractive again for investors

Airbnb discussed convertible note with investors

Mutual funds for a new investor

Investors will have to submit MF requests early

What should be the action point for equity investors at this time?

Comments
Add Your Comments
Commenting feature is disabled in your country/region.

Other useful Links


Copyright © 2020 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service