Section wise Highlights of Budget I & II 2019:

• Under section 10(12A), the limit for tax free withdrawal for National Pension scheme has been increased from 40% to 60% .
• Under section 10(34A), in case of buy back of listed/ unlisted shares no income shall be taxable in the hands of share holder.
• Under section 16, Standard deduction has been increased from Rs. 40,000 to Rs. 50,000.
• Under section 23, now a assessee can hold 2 houses as self occupied.
• Under section 23, if someone holds building or land as stock in trade then he may not show deemed rent on same upto 2 years from the date of receiving certificate of completion of construction.
• Under section 24, aggregate deduction for self occupied property will be Rs. 2,00,000 (i.e. including loan for purchase of house and renovation of house).
• Under section 54, if the amount of capital gain is below 2 crore then the assessee will have an option to invest the capital gain amount in purchasing/ constructing 2 houses. However if the capital gain amount is above Rs. 2 crore he needs to invest in single house. Once this option has been exercised by assessee he cannot have the option to invest in two house in future.
• Under section 79, a new amendment has been made with regard to start up that a start-up registered under section 80-IAC can carry forward any loss incurred during the first seven year of incorporation even if the shareholders doesn’t hold 51% of the shares on the last day of relevant previous year who held 51% of shares at the end of previous year in which the loss was incurred, but the only condition is that they must be the shareholder of the company. Thus for a start up company to carry forward loss having the same shareholders to hold majority shares is not necessary.
• Under section 80CCD(2), employer’s contribution limit for pension plan has been increased to 14% from 10% in case of government employees.
• Under section 80EEA, additional deduction of Rs. 1.5 lakh will be allowed in case of interest payable to financial institution for purchase/ construction of house if loan sanctioned between 01.04.2019 to 31.03.2020, stamp value of such house doesn’t exceed 45 lakh and assessee doesn’t own any house at the time of sanction of loan.
• Under section 80EEB, deduction of Rs. 1.5 lakh will be allowed in case of interest payable to financial institution for purchase of electric vehicle where loan is sanction between 01.04.2019 to 31.03.2023.
• Under section 87A, rebate shall be allowed of Rs. 12,500/- on income upto Rs. 5 lakh.
• Under section 115QA, now the word other than listed securities has been removed so now listed companies also need to pay tax on buyback of shares.
• Under section 139, now a person needs to calculate his total income to check the liability to file income tax return before giving the effect of exemption u/s 54, 54B, 54D, 54EC, 54F, 54G, 54GA and 54GB of the income tax act.
• Under section 139, the following proviso shall be inserted that if a person deposit more than 1 crore in aggregate in one or more bank account or has incurred Rs. 2 lakh or more for foreign travel for himself or other or has incurred expenditure exceeding Rs. 1 lakh for electricity consumption needs to compulsorily file return of income within due date.
• Under section 139A, now a person is allowed to quote his Aadhar number wherever it’s necessary to quote PAN number and he doesn’t possesses PAN number.
• Under section 140A, while calculating self assessment tax liability relief under section 89 will also be considered.
• Under section 194A, the limit has been increased from Rs. 10,000 to Rs. 40,000 in case of interest is paid by bank, co-operative society and post office.
• Under section 194DA, TDS rate has been increased from 1% to 5%.
• Under section 194-I, the limit for rent has been increased from Rs. 1.8 lakh per year to Rs. 2.4 lakh per year.
• Under section 194-IA, consideration shall now include any amount paid in name of membership fee, car parking fee, maintenance fee or advance which is incidental to transfer of property.
• New section 194M has been inserted which says, if an individual/ HUF pays to a resident any sum in nature of contract of professional service but such payment is not covered u/s 194C and 194J i.e. payment for personal expense then such individual/ HUF shall deduct TDS @5% if the total amount paid to such resident during an year exceeds Rs. 50 lakh.
• New section 194N has been inserted which says, if any person withdraws in a year Rs. 1 crore from a bank, co-operative society or post office then that bank, co-operative society or post office will have to deduct TDS @2% on amount exceeding 1 crore.
• New Section 269SU has been introduced for accepting payment via electronic mode for business with turnover above Rs. 50 crore and penalty on same will be levied under section 271DA.

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