With the commencement of the new financial year 2019-2020, various changes related to Income Tax and GST have come into effect that can affect your financial planning. CoKarya presents to you tax changes that you need to be aware of at the onset of the new Financial Year!
Here are some relevant changes made to Income Tax assessments:
Individual tax payers having an income up to Rs. 5 lakhs will get full tax rebate and will not be required to pay any income tax. This is not an increase in the basic exemption limit, but an increase in tax rebate from Rs. 2,500 to Rs. 12,500.
Standard deduction for salaried employees has been increased from Rs. 40,000 to Rs. 50,000.
Long term capital gains exemption benefit on sale of house property has been extended. Even when the sale proceeds of a house property are invested for the purchase of two residential houses, an individual will be allowed to claim the benefit.
The limit for deduction of TDS on interest earned from banks has been increased from Rs. 10,000 to Rs. 40,000.
Relevant changes made to the Goods and Services Tax are as follows:
Introduction of Composition scheme to service providers whose turnover during the previous financial year does not exceed Rs. 50 Lakhs. GST rate of 6% will be applicable on a person who is opting for composition scheme for service providers.
The threshold limit of aggregate turnover for availing composition scheme has been hiked to Rs. 1.5 crore from Rs. 1crore.
Supplier of goods whose aggregate turnover does not exceed Rs. 40 lakhs, is exempted from taking GST registration.
Relief on use of GST input tax credit for payment of tax with relaxations in ITC set-off mechanisms. Businesses can now utilize the remainder of IGST credit to pay-off either CGST or SGST liabilities at their discretion.
At CoKarya, we encourage our members to stay updated with various legal and taxation changes as they are a major portion of any business’ expense!