Proposed Amendment in income tax finance bill 2019

1. THE FINANCE BILL,2019
Compiled By;
ASIJA AND ASSOCIATES LLP
Chartered Accountants
34/5, Gokhle Marg, Lucknow.
KEY HIGHLIGHTS OF
PROPOSED AMENDMENTS
IN INCOME TAX ACT, 1961

2. CONTENT
Amendment in Section 16- Salaries
Amendment in Section 23 & 24-House Property
Amendment in Section 54- Captial gain -Deductions
Amendment in Section 194-I &194-IB
Amendment in Section 80-IBA
Amendment in Section 87A

3. Existing Provision-
The income under salary shall be calculated after making the deduction of lower
of the following:-
♦ ₹40,000 or
♦ Amount of Salary
Amendment-
The limit of standard deduction shall be enhanced from existing ₹40,000 to
₹50,000.
Amendment in Section 16 -
Deduction from Salary

4. Existing Provision-
• While computing the income of self occupied house,
♦ where the assessee is in the possession of more than one house property
♦ the annual value of one house property,at the option of the assessee ,
♦ shall be taken as Nil.
• The annual value of the other property shall be calculated as if such house or houses
had been let out.
Amendment-
• Notional Income of two self occupied property will now be taken to be Nil.
Amendment in Section 23(4) –
Determination of Annual value

5. Existing Provision-
• Where the property is held as stock-in-trade
♦ and the property or any part of the property
♦ is not let during the whole or any part of the previous year.
• The annual value of such property
♦ for the period up to 1 year
♦ from the end of the financial year
♦ in which the certificate of completion of construction of the property is obtained
♦ shall be taken to be nil.
Amendment-
• The annual value of the unsold stock in trade
♦ consisting of building or land appurtenant thereto
♦ and which is not let out for the period up to 2 year
♦ from the end of the F.Y
♦ in which certificate of completion of construction of the property
♦ is obtained shall be taken as nil.
Amendment in Section 23(5)

6. Existing Provision-
• In calculating the income chargeable under house property
♦ Interest on capital borrowed for acquisition / construction of 1 self occupied
House property is admissible as deduction.
♦ Subject to the overall ceiling of ₹2,00,000 p.a.
Amendment-
• Deduction for interest on borrowed capital shall now be admissible for 2 Self
occupied House.
Amendment in 2nd Proviso to Section 24(b)-
Deduction from income from House Property

7. Existing Provision-
An assessee is entitled to claim deduction as regards Long term capital gains
♦ arising from transfer of a residential house property
♦ provided such capital gains are invested in ‘One residential House property’
Amendment-
Now, assessee will be able to claim the deduction provided such capital gains are invested in
“Two residential House”, subject to following conditions;
♦ The overall long term capital gains do not exceed ₹2 Crores &
♦ This deduction shall not be available to the assessee subsequently for the same or any other
assessment year [i.e., this option shall be once in a life time deduction].
Amendment in Section 54-
Capital gain Deductions

8. Existing Provision-
• TDS @ 10% shall be deducted if the interest from banks and post office deposit
exceed ₹10,000.
Amendment-
• The threshold for deducting the TDS shall be enhance from ₹10,000 to ₹40,000.
Amendment in Section 194-A
Interest other than “Interest on securities”

9. Existing Provision-
• TDS @ 2% shall be deducted if the rental income from machinery or plant
exceed ₹180,000.
• TDS @ 10% shall be deducted if the rental income from land or building exceed
₹180,000.
Amendment-
• The threshold limit for deducting TDS shall be enhanced from ₹180,000 to
₹2,40,000.
Amendment in Section
194-I Rent

10. Existing Provision-
• Deduction of 100% of the profit derived from specified housing project is
available till 31st March, 2019.
Amendment-
• The date for claiming deduction has been extended till 31st March,2020.
Amendment in Section 80-IBA
Deduction in respect of profit and gains
from Housing project

11. Existing Provision-
• Rebate of ₹2,500 is available to the individual whose gross total income after
deduction of Chapter VI-A is ₹3,50,000.
Amendment-
• Rebate of ₹ 12,500 is to be allowed provided the gross total income after
deduction under chapter VI‐A does not exceed ₹5,00,000/‐.
Amendment in Section 87A
Rebate
Taxable Income Tax liability (Pre Budget) Tax liability (Post Budget)
3,50,000 2,500 -
5,00,000 12,500 -
6,00,000 32,500 32,500
10,00,000 1,12,500 1,12,500
There is NO change in the Basic Exemption limit.

12. Disclaimer
• This presentation has been prepared by us to provide some key highlights of the amendments
proposed in Finance Bill 2019, presented in parliament.
• For detailed insight and for better understanding of the various amendments proposed in
Income Tax Act 1961, the said presentation should be read along with Finance Bill 2019 and
related provision of Income Tax Act, 1961.
• The analysis and views contained in this presentation are personal in nature, are meant only
for information and do not constitute a professional advise to act. Neither our firm nor any
partner or employee or article of our firm shall responsible for any decision taken on the basis
of the said presentation and without obtaining our professional guidance or consultation on
the matter for which reliance was made on this presentation.
• The said document has been compiled and disseminated by us for general parlance. The same
is not being circulated with remotest intent of advertising or soliciting work in the public
domain.

13. For any Further Queries & Clarification
Contact
CA. Ashish Kapoor CA. Vasudha Jain
Partner Associate Director
Direct Tax Vertical Direct Tax Vertical
ashish.kapoor@asija.in vasudha.jain@asija.in
Thank you…..
Asija &Associates LLP
Direct Tax Vertical
E-Mail-incometax@asija.in