BUDGET 2020 - OTHER DIRECT TAX PROVSION

·         In case of transfer of Land or Building held as stock in trade, Full Value of Consideration will be the sale value if the sale value plus 10% of the sale value (Previously 5%) is equal to the stamp duty value. Otherwise the stamp duty value shall be considered as Full Value of consideration. [Section 43CA]

·         Fair market value of immovable property under section 55 as on 1.4.2001 for computing cost of acquisition not to exceed circle rate value.

·         A specific preamble text along with adoption of MLI has been incorporated in Section 90 of the Act. 

·         Tax Audit thresholds increased from Rs 1 crore to Rs 5 crore with a rider that total receipts and total payments in cash should not exceed 5% of such total receipts and total payments made during the year. 

·         A new section 115BAD has been proposed to be inserted to provide an option to the co-operative societies to pay tax at the rate of 22% plus 10% surcharge and 4% cess. The income of such societies shall be computed without claiming specified exemption, deduction or incentive available under the Act. Provisions of Alternate Minimum Tax (AMT) shall not apply to such co-operative societies.

·         CO-operative societies now to do TDS in case their turnover exceeds  50% on interest payment exceeding 40K.

·         The scope of the provision which allows carrying forward of losses or depreciation in certain amalgamations of banks and the insurance company has been proposed to be extended in order to facilitate recent government bank and insurance companies mergers /amalgamations.

·         The Finance Bill 2020 has proposed that Business Trusts will not be required to get listed on a recognised stock exchange for availing the benefit of pass-through allowed under section 115UA.

·         It has been proposed that assesses can seek advance pricing agreement (APA) or SHR in respect of the determination of attribution of profits to PE.

·         To do away with the existing distinction between a working and a nonworking partner of a firm with respect to the due dates by amending dozens of relevant  provisions prospectively with effect from 1st April, 2020 to apply from the assessment year 2020-21 onwards.    

·         Allowing deduction for amount disallowed under section 43B, to insurance companies on payment basis.

·         Widening the scope of Commodity Transaction Tax

·         Rationalisation of the provisions of section 49 and clause (42A) of section 2 of the Act in respect of segregated portfolios.