BUDGET 2020 - CORPORATE TAX

Corporate Tax

·         Dividend Distribution Tax being abolished wef 1.4.2020.

·         Benefit of section 80M will be available to a company in respect of dividend income received by it during the previous year and distributed by it, one month before the due date of filing return.

·         No deduction of expenditure against dividend income will be allowed under section 57 except interest which will not exceed 20% of dividend income.  

·         Dividend Income is now Taxable, Once Dividend is taxable, disallowance under section 14A become infructuous.   

·         Since Dividend is taxable now, require to reconsider again  for corporate which is more beneficial , 30% or 20%. Further ,   there will be TDS on dividend Income .  

·         Section 35AD deduction now made optional.   

·         Power Generation included as eligible for lower corporate tax rate of 15% under section 115BAB.

·         Time limit for approval of affordable housing project for availing deduction under section 80-IBA. The period of approval of the project by the competent authority is proposed to be extended to 31-03-2021. Earlier, the project was required to be approved by the competent authority during the period from 01-06-2016 to 31-03-2020.

·         Companies opting for new tax regime under new section 115BAA and 115BAB can claim only deduction under section 80JJA and 80M from chapter VIA.