1. New Tax Regime applicable to Individuals, HUFs:
A new concessional/ alternate tax regime under Section 115BAC of the Income Tax Act,1961 has been laid out wherein SIX different slab rates have been prescribed subject to some conditions. Some availments, benefits, deductions have to be forgone and only then this tax regime can be opted for.
2. Change in the residential status as per Section 6:
An Indian citizen or PIO with total income exceeding Rs.15 lacs, other than foreign income, shall be Resident But Not Ordinarily Resident (RNOR), if his stay in India is more than 120 days and less than 182 days.
3. Deemed Or Domicile Based Residency Status:
The residential status of Citizen of India shall be Resident if his total income (excluding foreign income) exceeds Rs.15 lacs during the financial year and when he is not liable to be taxed in any other country due to his reason of his Domicile or residency.
4. Audit Limit u/s 44AB enhanced
Audit limit increased from Rs.1 crores to Rs.5 crores with a condition that any cash payments shall not exceed 5% of the aggregate payments and cash receipt shall not exceed 5% of the gross receipts or turnover.
5. Taxability of Dividends:
Dividends are now taxable in the hands of the shareholders as per their individual slab rates. Companies will no longer pay dividend distribution tax.
6. Income from Mutual Funds:
Income from mutual funds is taxable in the hands of the unit holder. Tds @ 10% (7.50% wef 14th May 2020) shall be deducted for resident recipient if the income exceeds Rs.5000.
Tds @ 20% (15% wef 14th May 2020) shall be deducted in case of a non-resident unit holder.
7. Section 43B payments:
Allowing Deduction for amount disallowed u/s 43B, to insurance companies, shall be allowed on paid basis under section 43B.
8. Domestic Company u/s 115BAA and 115BAB:
Only deductions under Section 80JJAA and 80M allowed to the domestic company opting for concessional tax regime under Section 115BAA or 115BAB. Other Chapter VI-A deductions shall not be allowed.
Benefit of Section 115BAB shall also be available to a domestic company engaged in the business of generation of electricity.
9. Housing Loan deduction:
Additional housing loan deduction u/s 80EEA for rs.1,50,000.00 shall be allowed on house loan under affordable housing loan for loans sanctioned up to 31st March 2021.
10. Tds on fees for technical services u/s 194J:
Tds has been reduced to 2% u/s 194J on fees for technical services and 1.50% from 14th May 2020 till 31st march 2021.
11. Tds on payment of Cash u/s 194N:
5% on the amount withdrawn if it exceeds Rs.1 crores during the year and 3.75% wef 14th May 2020.
2% on the amount withdrawn if it exceeds Rs.20 lacs during the year and 1.50% wef 14th May 2020, in case of those persons who have not filed their Itr in last 3 preceding years.
12. TCS on sale of goods:
From 01st October 2020, tcs @ 0.1% (0.075% wef 14th May 2020) shall be collected by seller on payments to the supplier, in case supply exceeds Rs.50 lacs. This shall be applicable when the sellers turnover exceeds Rs.10 crores in the previous year. 1% tcs (0.75% wef 14th may 2020) in case of no Pan or Aadhaar.
13. Cash donation limit:
Cash donation limit of Rs.10,000 is prescribed U/s 80GGA for organizations involved in scientific research or rural development.
14. Inclusion of PM CARES fund in Section 80G:
Under Section 80G, PM Cares fund has been included with 100% deduction exemption being eligible for the amount donated or contributed.