With revised PF rates announced in Union Budget 2019, this year has been full of alterations and updates affecting the lives of millions of Indians. Stay with us, as there’s one more to your astonishment!
September 1, 2019 witnessed another change in the income tax rule affecting tons of Indians. Some of the major announcements made by the current FM, Mrs. Nirmala Sitharaman during her maiden Budget 2019 came into effect on the date. These changes are deemed to have a great impact on our daily lives.
Listed below are some:
- Section 194N-
The prime motive behind introducing section 194A is to promote cashless transactions. According the current law, if anyone withdraws cash worth more than Rs. 1 crore, then they will owe a TDS deduction of 2% of the amount withdrawn.
Anyhow, the total amount withdrawn doesn’t depend on the individual but a bank account i.e. if he/she withdraws Rs. 2 crores from two different banks (1 cr. from each), then there won’t be any TDS levied.
- New TDS on immovable property-
Section 194-IA explains that if anyone purchases an immovable property, which exceeds Rs. 50 Lakhs, then it will be levied with a TDS cut of 1% i.e. if the property costs Rs. 1 crore, total expense will be 1.1 Crore (1crore + 1 lakh of TDS).
However, the TDS cut will comprise of 1% charges on property along with other expenditures like electricity charges, parking fees, etc. Now the new expenditure becomes property cost + 1 percent of property + 1 percent of every other fees/ charges.
- Section 194M-
This newly included law says that an individual on a contract or any professional charge needs to pay a TDS of 5% for total sum amounting to more than Rs. 50 Lakhs. This TDS cut was 1% earlier. The new change applies to all transactions done on or after 1st September 2019. The new rule is bought into action to eliminate tax evasion.
- TDS on Life insurance-
Life insurance will now impose a TDS cut of 5%, which was earlier 1%. According to the current law, if the insurance maturity proceeds received are taxable, TDS will be 5% on the net income portion.
- PAN and Aadhaar interchangeability-
Mrs. Sitharaman also allowed the interchangeability of IDs like PAN and Aadhaar card. As stated during the Budget 2019, during ITR, one can provide Aadhaar details in place of PAN.
These are some of the major changes in the income tax rules. It would be interesting to see how the country and its people would react to it.
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Source: livemint, Business Today, & The Economic Times (Wealth)