Budget 2020: Key Takeaways of Indirect Tax Proposals

In a Union Budget 2020 presented today, the Union Finance Minister Smt. Nirmala Sitharaman has proposed the various Indirect Tax Proposals.
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GST:

1. Cash reward system envisaged incentivizing customers to seek invoices.
2. Simplified return with features like SMS based filing for nil return and improved input tax credit (ITC) flow to be implemented from 1st April 2020 as a pilot run.
3. Dynamic QR-code capturing GST parameters proposed for consumer invoices.
4. Electronic invoices to capture critical information in a centralized system to be implemented in a phased manner.
5. Aadhaar based verification of taxpayers being introduced to weed out a dummy or non-existent units.
6. GST rate structure being deliberated to address inverted duty structure.

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Customs Duties:

1. Customs duty raised on footwear to 35% from 25% and on furniture goods to 25% from 20%.
2. Basic customs duty on imports of newsprint and light-weight coated paper reduced from 10% to 5%.
3. Customs duty rates revised on electric vehicles and parts of mobiles.
4. 5% health cess to be imposed on the imports of medical devices, except those exempt from BCD.
5. Lower customs duty on certain inputs and raw materials like a fuse, chemicals, and plastics.
6. Higher customs duty on certain goods like auto-parts, chemicals, etc. which are also being made domestically.
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Trade Policy Measures

1. Customs Act is amended to enable proper checks of imports under FTAs.
2. Rules of Origin requirements to be reviewed for certain sensitive items.
3. Provisions relating to safeguarding duties to be strengthened to enable regulating such a surge in imports in a systematic way of indirect tax proposals.
4. Provisions for checking to dump of goods and imports of subsidized goods being strengthened.
5. Suggestions for reviews of exemptions from customs duty to be crowd-sourced.
6. Excise duty proposed to be raised on Cigarettes and other tobacco products, no change made in the duty rates of bidis.
7. Anti-dumping duty on PTA abolished to benefit the textile sector.

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Unprecedented Milestones and Achievements of Indian Economy

1. India now the fifth largest economy in the world.
2. 4% average growth clocked during 2014-19 with inflation averaging around 4.5%.
3. 271 million people raised out of poverty during the 2006-16.
4. India‟s Foreign Direct Investment (FDI) elevated to US$ 284 billion during 2014-19 from US$ 190 billion during 2009-14.
5. Central Government debt reduced to 48.7% of GDP (March 2019) from 52.2% (March 2014).
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   Two cross-cutting developments: Proliferation of technologies (Analytics, Machine Learning, robotics, Bioinformatics, and Artificial Intelligence).

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DOWNLOAD 👇👇

1. 1. BUDGET SPEECH
   2. FINANCE BILL 2020
   3. MEMORANDUM
   4. PPT ON BUDGET
   5. HIGHLIGHTS-BUDGET 2020
   6. PPT ON BUDGET 2020

GST Invoices: Govt. proposes Dynamic QR-Code

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In a Union Budget 2020 presented today has proposed the Dynamic QR Code for Consumer GST Invoices.
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A simplified GST return will be implemented from the 1st April, 2020. While presenting the Union Budget 2020-21 in Parliament today, the Union Minister for Finance & Corporate Affairs, Smt Nirmala Sitharaman said that this is under pilot run.
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It will make return filing simple with features like SMS based filing for nil return, return pre-filling, improved input tax credit flow and overall simplification. The Finance Minister said that the refund process has been simplified and has been made fully automated with no human interface.
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Smt Sitharaman said that several measures have been taken for improving compliance and Aadhaar based verification of taxpayers is being introduced. This will help in weeding out a dummy or non-existent units, she added. The Union Budget has proposed Dynamic QR-code for consumer invoices. The GST parameters will be captured when payment for purchases is made through the QR-code in GST Invoices. A system of cash reward is envisaged to incentivise customers to seek invoice, the Finance Minister said. Invoice and input tax credit matching is being done wherein returns having a mismatch of more than 10% or above a threshold are identified and pursued.
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The electronic invoice is another innovation wherein critical information shall be captured electronically in a centralized system. It will be implemented in a phased manner starting from this month itself on an optional basis. It will facilitate compliance and return filing, the Finance Minister said.
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To Read the full text of the THE FINANCE BILL, 2020

CLICK HERE

Budget 2020 proposes MSMEs Turnover Threshold for Audit Increased to Rs 5 Crore from 1Cr

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In order to reduce the compliance burden on small retailers, traders, shop keepers who comprise the Medium, Small and Micro Enterprise (MSMEs) sector, the Union Budget proposed to raise by five times the turnover threshold for audit from the existing Rs. 1 crore to Rs. 5 crores. While presenting the Union Budget 2020-21 in Parliament today, the Union Minister for Finance & Corporate Affairs, Smt Nirmala Sitharaman said that in order to boost less cash economy, the increased limit shall apply only to those businesses which carry out less than 5% of their business transactions in cash. Currently, businesses having a turnover of more than Rs 1 crore are required to get their books of accounts audited by an accountant.
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In order to give a boost to the start-up ecosystem, the Union Budget has proposed to ease the burden of taxation on the employees by deferring the tax payment on ESOPs by five years or till they leave the company or when they sell their shares, whichever is earlier.
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The Finance Minister said that Start-ups, MSMEs have emerged as engines of growth for the Indian economy. Over the past year, the Government has taken several measures to handhold them and support their growth. During their formative years, Start-ups generally use Employee Stock Option Plan (ESOP) to attract and retain highly talented employees. ESOP is a significant component of compensation for these employees. Currently, ESOPs are taxable as perquisites at the time of exercise. This leads to a cash-flow problem for the employees who do not sell the shares immediately and continue to hold the same for the long-term.
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Further, an eligible Start-up having turnover up to Rs 25 crores is allowed the deduction of 100% of its profits for three consecutive assessment years out of seven years if the total turnover does not exceed Rs 25 crores. In order to extend this benefit to larger start-ups, the Budget 2020 has proposed to extend the turnover limit from the existing Rs 25 crores to Rs 100 crores. Moreover considering the fact that in the initial years, a start-up may not have adequate profit to avail of this deduction, the Budget 2020 proposes to extend the period of eligibility for the claim of deduction from the existing 7 years to 10 years.

Income Tax Slabs Changed, Rates Cut for earnings till Rs 15 Lakh in Optional Scheme

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In a Union Budget 2020 presented today, the Finance Minister Nirmala Sitharaman has announced the new changes in Income Tax Slabs.
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In order to provide significant relief to the individual taxpayers and to simplify the Income-Tax law, the Union Budget proposes to bring a new and simplified personal income tax regime wherein income tax rates will be significantly reduced for the individual taxpayers who forgo certain deductions and exemptions.
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While presenting the Union Budget 2020-21 in Parliament today, the Union Minister for Finance & Corporate Affairs, Smt Nirmala Sitharaman said, “The new tax regime shall be optional for the taxpayers.” She further said that an individual who is currently availing more deductions and exemptions under the Income Tax Act may choose to avail them and continue to pay tax in the old regime. The New personal Income tax regime proposes the following Income Tax Slabs:
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In the new tax regime, the substantial tax benefit will accrue to a taxpayer depending upon exemptions and deductions claimed by him. For example, a person earning Rs 15 lakh in a year and not availing any deductions etc. will pay only Rs, 1,95,000 as compared to Rs, 2,73,000 in the old regime. Thus his tax burden shall be reduced by 78,000 in the new regime. He would still be a gainer in the new regime even if he was taking a deduction of Rs 1.5 lakh under various sections of Chapter VI –A of the Income Tax Act under the old regime. The new tax regime will be optional for the taxpayers.
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As per the Memorandum explaining the provision in the Finance Bill, the option shall be exercised for every previous year where the individual or the HUF has no business income and in other cases, the option once exercised for a previous year shall be valid for that previous year and all subsequent years. The option shall become invalid for a previous year or previous years as the case may be if the individual or HUF fails to satisfy the conditions and other provisions of the Act shall apply.
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The new personal income tax rates will entail estimated revenue forgone of Rs 40,000 crore per year. Smt Sitharaman said, “We have also initiated measures to prefill the income tax return so that an individual who opts for the new regime would need no assistance from an expert to file his return and pay income tax.”
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The Finance Minister said that in order to simplify the income tax system, she has reviewed all the exemptions and deductions incorporated over the past several decades.” In the Budget, around 70 of the existing exemptions and deductions of different nature (more than 100) have been proposed to be removed. Remaining exemptions and deductions will be reviewed and rationalised in the coming years with a view to further simplifying the tax system and lowering the tax rate.

Key Highlights of Budget 2020

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In a two-hours  forty Minutes Budget 2020 speech highlights, the Union Finance Minister Nirmala Seetharaman has made some significant proposals for tax matters.
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Some of the Budget Highlights are below.

1. Income Tax Slab: 10 per cent for 5 to 7.5 lakh, 15 per cent for 7.5 lakh to 10 lakh, 20 per cent for 10 lakh to 12.5 lakh, 25 per cent for 12.5 lakh to 15 lakh and 30 per cent for above 15 Lakh.
2. Dividend Distribution Tax is removed and dividends are taxable.
3. 100% Tax Exemption for Foreign Sovereign wealth Fund Investments in India.
4. Tax on Cooperative societies proposed to be reduced to 22 per cent plus surcharge and cess, as against 30 per cent at present
5. 15% concessional rate of corporate tax extended to Power Sector
6. Exempts co-operative societies from Alternate Minimum tax
7. New proposed tax slabs that will be voluntarily for taxpayers but subject to not claiming any deductions.
8. Tax Audit threshold limit increased Rs. 5 cr from 1cr.
9. Section 50C and 45CA limit extended to 10% from 5%.
10. Income Tax Act to be amended to facilitate e-appeal
11. Section 80G -Donations allowed as a deduction will be pre-filled in ITR forms now onwards.
12. Additional Rs 1.5 lakh tax benefit on interest paid on affordable housing loans to March 2021.
13. ‘Vivad se Vishwas’ scheme for direct taxpayers whose appeals are pending at various forums.-
    • No Dispute but Trust Scheme
    • Direct Tax Dispute Resolution
    • payment of all taxes will lead to waiver of penalty and interest
    • applicable for all pending appeals at all levels
14. E-Invoice will be implemented in a phased manner
15. Income Tax Faceless Appeals to be introduced
16. Import duty hiked on inputs used by footwear and furniture MSMEs
17. 60 lakh more taxpayers joined the GST tax base in the last two years.
18. 40 Crores Income Tax Returns has been filed.
19. Proceeds on Taxes from Medical devices will be used in funding hospital development.
20. Tax Holiday to developers of affordable housing extended by 1 year.
21. Govt to set up investment clearance cell to entrepreneurs.
22. Scheme for reversion of duties & taxes on exported products to be launched this year
23. A Taxpayer’s charter will be institutionalized.
24. Changes in Companies Act – Criminal liabilities to be substituted by Civil liabilities.
25. Insurance cover for a depositor will be raised from 1 lakh to 5 lakh per depositor.
26. The robust mechanism in place to monitor the health of banks, depositors’ money is absolutely safe.
27. Turnover limit for exemption for Start Ups now 100 Cr.
28. Strengthen the role of PFRDAI; an amendment to be carried out in Pension Fund in PFRDAI.
29. Faceless Appeals on lines of Faceless Assessments

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1. BUDGET SPEECH
2. FINANCE BILL 2020
3. MEMORANDUM
4. PPT ON BUDGET

Union Budget proposes 25 % Corporate Tax extended to Companies with Annual Turnover up to Rs. 400 crore

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The Union Budget 2019-20 has proposed to extend the lower rate of 25 % Corporate Tax to all companies with annual turnover up to Rs. 400 crore.  Currently, this rate is only applicable to companies having annual turnover up to Rs. 250 crore. Presenting the General Budget 2019-20 in the Parliament today, the Union Minister of Finance and Corporate Affairs, Smt. Nirmala Sitharaman said, “This will cover 99.3 percent of the companies. Now only 0.7 percent of companies will remain outside this rate”.
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The Budget also proposes Simplification and Ease of Living. Noting that India’s Ease of Doing Business ranking under the category of ‘paying taxes’ showed a significant jump from 172 in 2017 to 121 in the 2019, the Finance Minister said above measures will leverage technology to make compliance easier for the taxpayers.
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The Budget also proposes to simplify the tax law to reduce genuine hardships to taxpayers which include enhancing threshold of tax for launching prosecution for non-filing of returns from Rs. 3,000 to Rs. 10,000, for proceeding against a person and exempting appropriate class of persons from the anti-abuse provisions of section 50CA and section 56 of the Income Tax Act.

Budget 2019: Important GST and Indirect Tax Amendments

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Further simplification of the GST processes, increasing Special Additional Excise duty and Road and Infrastructure Cess on petrol and diesel by one rupee each, hike in Customs Duty on Gold and precious metals to 12.5% and imposing nominal basic excise duty on tobacco products and crude are among the salient proposals pertaining to the Indirect Taxes in the Union Budget 2019-20. It also provides for exempting import of certain Defence Equipments from basic customs duty, reducing customs duty on certain raw materials and capital goods, and rationalization of export duty on raw and semi-finished leather.
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GST
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Presenting the Budget in Parliament today, the Union Minister of Finance and Corporate Affairs, Smt. Nirmala Sitharaman announced that GST processes are being further simplified.  The threshold exemption limit for a supplier of goods is proposed to be enhanced from Rs. 20 lakhs to an amount exceeding Rs. 40 lakhs.
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“Tax payers having annual turnover of less than Rs. 5 Crore shall file quarterly return. Free accounting software for Return preparation has been made available to small businesses. A fully automated GST refund module shall be implemented. Multiple tax ledgers for a tax payer shall be replaced by one”, she said.
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The Budget proposes to move to an electronic invoice system wherein invoice details will be captured in a central system at the time of issuance. “This will eventually be used to prefill the taxpayers’ returns. There will be no need for a separate e-way bill. To be rolled out from January 2020, the electronic invoice system will significantly reduce the compliance burden”, said Smt. Sitharaman.
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The Finance Minister said that the landscape of Indirect Tax has changed significantly with the implementation of GST. Terming it as a “monumental reform”, Smt. Sitharaman said the GST regime has brought together the Centre and the States with the result 17 taxes and 13 cesses became one and multitude of rates instantly became four. “Almost all commodities saw rate reduction. Tens of returns were replaced by one. Taxpayers’ interface with tax departments got reduced. Border checks got eliminated. Goods started moving freely across states, which saved time and energy. The dream of ‘One Nation, One Tax, One Market’ was realized,” she said.
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Complimenting the GST Council, the Finance Minister said the Council, Centre and States proactively worked to resolve the teething problems witnessed during the initial phase of GST. Smt. Sitharaman said that GST rates have been reduced significantly where relief of about Rs. 92,000 crores per year has been given.
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Sabka Vishwas Legacy Dispute Resolution Scheme
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On the issue of huge pending litigations from pre-GST regime, the Minister said that there is a need to unload the baggage and allow business to move on, as more than Rs. 3.75 Lakh Crore is blocked in litigations in Service Tax and Excise. The budget proposes a dispute resolution-cum-amnesty scheme, called “the Sabka Vishwas Legacy Dispute Resolution Scheme, 2019” that will allow quick closure of these litigations. The relief under the scheme varies from 40 percent to 70 percent of the tax dues for cases other than voluntary disclosure cases, depending on the amount of tax dues involved. The scheme also provides relief from payment of interest and penalty. The person discharged under the scheme shall also not be liable for prosecution.
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Customs duty
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On the Customs duty, the Finance Minister said the proposals are driven with the objectives of securing the country’s borders, achieving higher domestic value addition through Make in India, reducing import dependence, protection to MSME sector, promoting clean energy, curbing non-essential imports, and correcting inversions. Describing Defence Modernization and Upgradation as a national priority and of immediate requirement, the budget proposes exemption from the basic Customs duty on import of such defence equipment that are not being manufactured in India.
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Make in India
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Describing Make in India as a cherished goal, the Finance Minister proposed increase in basic Custom duty on certain items so as to provide domestic industry a level playing field. These items include PVC, cashew kernels, Vinyl flooring, tiles, metal fittings, mountings for furniture, auto parts, certain kinds of synthetic rubbers, marble slabs, optical fibre cable, CCTV camera, IP camera, digital and network video recorders. She also proposed to withdraw exemption from custom duty on certain electronic items which are now being manufactured in India. To encourage domestic publishing and printing industry, 5% custom duty will be imposed on imported books.
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To further promote domestic manufacturing, the budget proposes customs duty reductions on certain raw materials and capital goods. These include certain inputs of CRGO sheets, amorphous alloy ribbon, ethylene di-chloride, propylene oxide, cobalt matte, naphtha, wool fibres, inputs for manufacture of artificial kidney and disposable sterilised dialyser, and fuels for nuclear power plants. The Finance Minister announced exemption on certain parts of electric vehicles to further incentivize e-mobility.
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Duty & Cess on Petrol & Diesel
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The Budget proposes to increase Special Additional Excise duty and Road and Infrastructure cess each by one rupee a litre on petrol and diesel.  “Crude prices have softened from their highs. This gives me a room to review excise duty and cess on petrol,” the Finance Minister said.
Smt. Sitharaman also announced increase in custom duty on gold and other precious metals from 10% to 12.5%.
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The Budget also proposes rationalization of export duty on raw and semi-finished leather to provide relief to the sector.
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Duty on Tobacco products & Crude
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Smt. Sitharaman said that tobacco products and crude attract National Calamity and Contingent duty which in certain cases is being contested on the ground that there is no basic excise duty on these items. To address this issue, the Budget proposes to impose a nominal basic excise duty on tobacco products and crude.
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The Finance Minister proposed a few amendments to the Customs Act. She said, “Recent trends reveal that certain bogus entities are resorting to unfair practices to avail undue concessions and export incentives.”  She announced that misuse of duty free scrips and drawback facility involving more than 50 Lakh rupees will be a cognizable and non-bailable offence.

Union Budget 2019- Live Blog

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Direct tax collection increased by 78%; Tax collection rose from 6.38 lakh crore rupees in 2013-14 to 11.37 lakh crore rupees in 2018 #BudgetScan #Budget2019
12:56 PM - Jul 5, 2019
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#Budget2019 #BudgetScan: Total Deduction of 3.5 lakhs on Loan for Affordable Houses

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12:51 PM - 5 Jul 2019

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#Budget2019 #BudgetScan: deduction for Purchase of Affordable Houses

12:48 PM - 5 Jul 2019

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#BudgetScan #Budget2019: Government has already moved GST council to lower the GST rate on electric vehicles(EV) from 12% to 5%.

12:47 PM - 5 Jul 2019

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#BudgetScan #Budget2019; Proposes ease of Angel Tax for Startups

 12:47 PM - 5 Jul 2019

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#Budget2019 #BudgetScan: 2.5 Lakhs Deduction from Income Tax for Interest on Loans taken for purachse of EVs

12:44 PM - 5 Jul 2019

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#Budget2019 #BudgetScan: Additional income Tax deduction on Interest taken for purchase of Electronic Vehicles

12:43 PM - 5 Jul 2019

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#Budget2019 #BudgetScan: Lower Rate of 25% to all companies having Turnover of 400 Crores

12:41 PM - 5 Jul 2019

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#Budget2019 #BudgetScan: 78% increase in Direct Tax Revenue.

12:39 PM - 5 Jul 2019

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#Budget2019 #BudgetScan: FM Thanks Taxpayers

12:36 PM - 5 Jul 2019

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#Budget2019 #BudgetScan: RBI to Regulate Housing Finance Companies

12:28 PM - 5 Jul 2019

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#BudgetScan #Budget2019: 4 lakh Crore recovered through IBC

12:22 PM - 5 Jul 2019

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#Budget2019 #BudgetScan: Govt. proposes to start a TV channel exclusively for startups. Funding and Tax planning, venture capital etc would be the focus of the channel.

12:19 PM - 5 Jul 2019

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#budgetScan #Budget2019: Aadhaar Cards to be issued for NRIs

12:17 PM - 5 Jul 2019

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#Budget2019 #BudgetScan: To provide Non-resident Indians (NRIs) seamless access to Indian equities, NRI portfolio investment route to be merged with foreign portfolio investment route

12:01 PM - 5 Jul 2019

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#BudgetScan #Budget2019: Government is working with the states in removing the barriers on the way of Uday scheme.

11:59 AM - 5 Jul 2019

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#Budget2019 #BudgetScan: Propose waste management plan for every village: FM

11:57 AM - 5 Jul 2019

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#Budget2019 #BudgetScan: FM emphasis on Zero budget farming model to double farmers income

 11:51 AM - 5 Jul 2019

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#Budget2019 #BudgetScan: Annual Global Investors' Meet to be organized in India, using National Investment and Infrastructure Fund(NIIF) as the anchor to get key sets of global players to come and invest in India

 11:47 AM - 5 Jul 2019

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#BudgetScan #Budget2019: Ease of Doing Business to be extended to Farmers also

11:45 AM - 5 Jul 2019

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#Budget2019 #BudgetScan: It's right time to consider increasing minimum public shareholding in the listed companies, I have asked SEBI to consider raising the current threshold of 25% to 35%: FM

11:42 AM - 5 Jul 2019

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#BudgetScan #Budget2019: User friendliness of trading platforms for corporate bonds will be reviewed, including issues arising out of capping of International Securities Identification Number

11:39 AM - 5 Jul 2019

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#Budget2019 #BudgetScan: Finance Minister Sitharaman proposes raising minimum public holding to 35%.

11:34 AM - 5 Jul 2019

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#BudgetScan #Budget2019: Pension Benefits for Retail Traders

11:31 AM - 5 Jul 2019

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#BudgetScan #Budget2019: to invite FDI in Aviation and Media

11:31 AM - 5 Jul 2019

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#BudgetScan #Budget2019: 100% Foreign Investment in Insurance Intermediaries

11:30 AM - 5 Jul 2019

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#BudgetScan #Budget2019: Existing KYC forms for FPIs to be rationalized

 11:29 AM - 5 Jul 2019

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#BudgetScan #Budget2019: Govt to extend Pension benefits for Traders

 11:28 AM - Jul 5, 2019

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#BudgetScan #Budget2019: Social Stock exchange to be introduced under SEBI

11:27 AM - Jul 5, 2019

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#BudgetScan #Budget2019: Threshold of Public Investment in Private Listed Companies to be raised to 35% from current 25%.

 11:27 AM - Jul 5, 2019

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#BudgetScan #Budget2019: Model Tenancy Laws to be shared with States

 11:25 AM - Jul 5, 2019

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#BudgetScan #Budget2019: 300 crore Loan granted to GST registered MSMEs in 2019

11:24 AM - Jul 5, 2019

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#BudgetScan #Budget2019: GST registered MSMEs got Loans in 59 Minutes through Portal

11:23 AM - Jul 5, 2019

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#BudgetScan #Budget2019: 50 Lakh Crore Investment in railways till 2030

11:22 AM - Jul 5, 2019

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#Budget2019 #BudgetScan: The Indian economy will grow to become a $3 trillion economy in the current year itself. It is now the sixth largest in the world. 5 years ago it was at the 11th position. 

11:18 AM - Jul 5, 2019

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#BudgetScan #Budget2019: Electronic Vehicles to be incentivised, says FM

11:17 AM - Jul 5, 2019

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#BudgetScan #Budget2019: More focus on Air and Water Travels

11:13 AM - Jul 5, 2019

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#BudgetScan #Budget2019: Mudra Loans changed the Lives of Common Man, says FM

11:10 AM - Jul 5, 2019

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#BudgetScan #Budget2019: More investment needed in Infrastructure, Digital economy etc: FM

11:09 AM - Jul 5, 2019

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#BudgetScan #Budget2019: Reforms to be made in Indirect taxation, Bankruptcy Law: FM

11:08 AM - Jul 5, 2019

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#BudgetScan #Budget2019: Indian Economy is 6th Largest in World

11:08 AM - Jul 5, 2019

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#BudgetScan #Budget2019: To encourage MSMEs, Startups, says FM

11:07 AM - Jul 5, 2019

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#BudgetScan #Budget2019: To encourage MSMEs, Startups, says FM

11:07 AM - Jul 5, 2019

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#BudgetScan #Budget2019: Govet's Goal is to cut Red Tapes, Ease Business, says FM

11:06 AM - Jul 5, 2019 

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#Budget2019 #BudgetScan: FM #NirmalaSitharaman presents her first maiden #budget.

11:02 AM - Jul 5, 2019 

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Union cabinet approves #Budget2019 . #BudgetScan

10:58 AM - Jul 5, 2019

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#BudgetScan : Finance Minister Nirmala Sitharaman and MoS Finance Anurag Thakur arrive at the Parliament. #Budget2019 @nsitharaman @ianuragthakur

10:28 AM - Jul 5, 2019

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Copies of #Budget2019 have been brought to the Parliament. Finance Minister Nirmala Sitharaman will present the Budget in Lok Sabha at 11 AM today.#BudgetScan

10:30 AM - Jul 5, 2019 

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Union Cabinet meeting begins in Parliament. #Budget2019 #BudgetScan

10:49 AM - Jul 5, 2019

COMMON MAN’S EXPECTATIONS FROM THE FINANCE MINISTER

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The budget will be presented on 5th July by the first full time woman finance minister. Below are some of the expectation of common tax payers from her.

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Changes in the tax rates 

The finance minister should retain the initial income tax slab of 5% for income between 2.50 lakhs to 5 lakhs. However as the next tax slab for income between Rs. 5 lakhs to 10 lakhs which is very steep 20% after the initial slab of 5%, I request the finance minister to reduce this  present tax slab of 20% to 10% to make it progressive and smooth.  The finance minister should shift the tax slab of 20% to the tax payers with income between 10 lakhs to 25 lakhs. Since for 99% of the companies, the tax rate is 25%, the government should reduce the maximum marginal rate from present 30% to 25% and tax the income beyond 25 lakhs @ 25%.

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As per the Laffer’s  Curve  higher the rate of tax a government levies, lower is the aggregate tax collection. The slab rates suggested above will in help the government generate more revenue the long run as people are willing to pay tax levied at such nominal rates as long as it does not affect their standard of living.

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Marginal relief for individual tax payer with slightly higher income over 5 lakhs

Individual tax payers who are resident of India are entitled to claim a rebate of upto Rs. 12,500/- provided their total taxable income does not exceed the threshold limit of Rs. 5 lakhs. However once the income crosses the magic number of 5 lakhs, their tax liability suddenly increases by 12,500/- even if their incremental income over Rs. 5 lakhs is less than 12,500/- Such people are worse off just because their income is slightly higher than 5 lakhs.

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Presently all the tax payers who have to pay a surcharge if their income exceeds Rs. 50 lakhs have the benefit of marginal relief as provided in the respective Finance Act though the same is not part of the Income Tax Act. As per the marginal relief provisions as contained in Finance Acts, the incremental tax liability, due to levy of surcharge, in no circumstances shall exceed the incremental income over the threshold limit of surcharge of Rs. 50 lakhs.

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Presently, there is no such provision for providing marginal relief to the tax payers whose income exceeds Rs. 5 lakhs by just few hundreds. This provision of marginal relief if introduce in the Section 87A will check the tendency of taxpayers to manipulate their income level in case it just happens to be marginally higher than the threshold limit of 5 lakhs to avoid payment of such higher tax than the incremental income.

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Relief to the home buyers

As per the tax laws any person who has taken a home loan for acquiring a house for self occupation is allowed to claim interest only upto Rs. 2 lakhs irrespective of the amount of interest paid. Any excess interest paid is not eligible for any tax benefits. Presently a person is allowed to have two self owned properties as self occupied but the interest claimis restricted to Rs. 2 lakhs for both the properties taken together which is not correct. A person should be allowed to claim proportionately higher interest in case he has more than one self occupied house property. However if the property is let out, you can claim full interest subject, however, to restrictions on your eligibility to claim set off of loss under this head which is restricted to Rs. 2 lakhs against other incomes. In my opinion the provisions should be the other way round. The person who buys the house for his own occupation should be allowed to claim full deduction of interest and the person who tries to play tax arbitrage by taking a home loan should be allowed limit amount of interest to discourage such abuse of the tax laws.

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Presently a tax payer is allowed to set off only upto Rs. 2 lakhs any loss computed under the head “Income from House Property” arising due to claim of interest on home loan or money borrowed for the purpose of purchase/construction/repair/renovation of  a house. In my opinion this limit of just insufficient looking at the amount of interest to be paid on home loan taken to buy properties specially in urban area. This limit should at least be raised to Rs. 5 lakhs.

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Since. only loss upto 2 lakhs is allowed to be set off against income of the current year, any loss beyond Rs. 2 lakhs under the house property head for the year is required to be carried forward for set off against income under the same head for eight subsequent years. Since home  loan is a long term product and the probability of a home buyer with home loan having a positive income under the head is negligible for these eight subsequent year unless he prepays the home loan,  I would suggest that the Finance Minister should rationalise this carry forward provision and make it eligible for carry forward for unlimited period so as to grant the intended benefit.

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Hope some of the suggestions are accepted by the finance minister.

UNION BUDGET 2019: HIGHLIGHTS

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HIGHLIGHTS OF BUDGET 2019
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Tax
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1. Within 2 years, Tax assessment will be done electronically
2. IT returns processing in just 24 hours
3. Minimum 14% revenue of GST to states by Central Govt.
4. Custom duty has abolished from 36 Capital Goods
5. Recommendations to GST council for reducing GST rates for home buyers
6. *Full Tax rebate upto 5 lakh annual income after all deductions.*
7. Standard deduction has increase from 40000 to 50000
8. Exempt on tax on second self-occupied house
9. Ceiling Limit of TDS u/s 194A has increased from 10000 to 40000
10. Ceiling Limit of TDS u/s 194I has increased from 180000 to 240000
11. Capital tax Benefit u/s 54 has increased from investment in one residential house to two residential houses.
12. Benefit u/s 80IB has increased to one more year i.e. 2020
13. Benefit has given to unsold inventory has increased to one year to two years.
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Other Areas
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14. State share has increased to 42%
15. PCA restriction has abolished from 3 major banks
16. 2 lakhs seats will increase for the reservation of 10%
17. 60000 crores for manrega
18. 1.7 Lakh crore to ensure food for all
19. 22nd AIIMS has to be opened in Haryana
20. Approval has to be given to PM Kisan Yojana
21. Rs. 6000 per annum has to be given to every farmer having upto 2 hectare land. Applicable from Sept 2018. Amount will be transferred in 3 installments
22. National kamdhenu ayog for cows. Rs. 750 crores for National Gokul Mission
23. 2% interest subvention for farmers pursuing animal husbandry and also create separate department for fisheries.
24. 2% interest subvention for farmers affected by natural calamities and additional 3% interest subvention for timely payment.
25. Tax free Gratuity limit increase to 20 Lakhs from 10 Lakhs
26. Bonus will be applicable for workers earning 21000 monthly
27. The scheme, called Pradhan Mantri Shram Yogi Mandhan, will provide assured monthly pension of Rs. 3,000 with contribution of Rs. 100 per month for workers in unorganized sector after 60 years of age.
28. Our government delivered 6 crores free LPG connections under Ujjawala scheme
29. 2% interest relief for MSME GST registered person
30. 26 weeks of Maternity Leaves to empower the women
31. More than 3 Lakhs crores for defence
32. One lakh digital villages in next 5 years
33. Single window for approval of India film makers

REGARDS
ACA SOURAV BAGARIA

Key Interpretation on: "No Income Tax upto 5 Lakh"

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📣 *Wrong perception about NO Income Tax upto Rs 5 lakh to all tax payer, Income Tax is still payable @5% on Income upto Rs 5 lakh*
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📣 *Finance Minister while presenting the Budget speech has clearly stated that there will not be any Income Tax to the on Income up to Rs 5 lakh, but when Finance Bills came on the records it clear the myth spread on the news media and other websites.*
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📣 *As per the Clause 8 of the Bill seeks to amend section 87A of the Income-tax Act to provide relief to the individual taxpayers by increasing the maximum amount of tax rebate to twelve thousand five hundred rupees from existing two thousand five hundred rupees. The tax rebate shall now be admissible to taxpayers having total income up to five hundred thousand rupees, instead of existing three hundred fifty thousand rupees.*
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📣 *No tax upto total taxable Income of 5Lakh is in the form of rebate under section 87A which means It will be available to only those Individuals whose Total Taxable Income is less than or equal to 5Lakh (after availing all available deductions).*
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📣 *There is no change in Tax slabs and there is no exemption to those Individuals whose total Taxable Income (after all deductions) is more than 5Lakh*
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REGARDS
ACA SOURAV BAGARIA

Budget 2019: Major Tax Proposals

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The Union Finance Minister Piyush Goyal has announced the Interim Budget for the year 2019-20 today. The key proposals in the budget regarding taxation are the following;
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• Income Tax Exemption to People having Income of 5 Lakhs
• Additional deductions such as interest on a home loan up to Rs. 2 lakh, interest on education loans, National Pension Scheme contributions, medical insurance and medical expenditure on senior citizens etc, are also provided for in the Interim Budget 2019-20. Thus tax benefit of Rs. 18,500 crore is proposed to be provided to an estimated 3 crore middle class and small taxpayers comprising self-employed, small business, small traders, salary earners, pensioners, and senior citizens.
• 50000 Standard Deduction for Salaried Class from current Rs. 40,000
• Relief for Self-Occupied House – No Notional Income for second self-occupied House
• TDS on Bank Deposits – No TDS on Rs. 40,000
• No TDS on Rent for Annual rent of Rs. 2.4 Lakhs rupees
• Capital gain Exemption under Section 54 of the Income-tax Act available to two Residential Houses
• Capital gain Exemption under section 54 increased to Two Cores
• 80(1)(b)(a) benefit for Affordable Houses extended till 31st March 2020.
• Tax Relief for Notional Rent on Unsold Houses extended to Two years
• The Finance Minister says that the Government wants the GST burden on home buyers to be reduced and accordingly the GST Council was moved to appoint a Group of Ministers to examine and make recommendations in this regard at the earliest.

Budget 2019: No Income Tax for Income up to 6.5 Lakhs

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The Union Budget announced by the Union Finance Minister Piyush Goyal for the year 2019-20 has increased the threshold limit for the levy of income tax up to Rs. 5 Lakhs. An additional amount of 1.5 lakhs is already available as a deduction. Consequently, there would be no tax liability on income up to Rs. 6.5 Lakhs.
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For the salaried class, the budget increased the amount of Standard Deduction to Rs. 50000 from the current Rs. 40,000.
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Additional deductions such as interest on home loan up to Rs. 2 lakh, interest on education loans, National Pension Scheme contributions, medical insurance and medical expenditure on senior citizens etc, are also provided for in the Interim Budget 2019-20. Thus tax benefit of Rs. 18,500 crore is proposed to be provided to an estimated 3 crore middle class and small taxpayers comprising self-employed, small business, small traders, salary earners, pensioners and senior citizens.
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in the year 2017-18, the tax returns filed reached 6.86 crores, an increase of 25% over the previous year. This year, as on 31-10-2018, already 5.99 crore returns have been filed which is an increase of 54.33% compared to the previous year till this date. The new filers added this year are 86.35 lakh.

Budget 2019 – Live Blog

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Capital gain Exemption under section 54 increased to Two Cores #LiveBudget #Budget2019

 

12:43 PM - Feb 1, 2019

 

 

•Rs. 50000 Standard Deduction for Salaried Class #LiveBudget #Budget2019

 

12:37 PM - Feb 1, 2019

 

 

TDS threshold for rent increased from Rs 1.8 lakh to 2.4 lakh : @PiyushGoyal #LiveBudget #BudgetSession #Budget2019

 

12:40 PM - Feb 1, 2019

Individuals with gross income up to 6.5 lakh rupees will not need to pay any tax if they make investments in provident funds and prescribed equities #BudgetLive #Budget2019 #BudgetSession

 

12:35 PM - Feb 1, 2019

 

 

 

Income Tax Exemption Threshold increased to 5 Lakhs #LiveBudget #Budget2019

 

12:31 PM - Feb 1, 2019

 

8% increase in direct tax collections in 2017-18, 1.06 crore people included in the tax base. Also, more than 1 crore people filed IT returns for the first time, after #demonetisation #LiveBudget #Budget2019 #BudgetSession

 

12:23 PM - Feb 1, 2019

 

 

 

 

Committed to eliminating the scourge of black money; anti-black money measures taken have brought an undisclosed income of about 1.30 lakh crore rupees to the fore; 3.38 lakh shell companies were deregistered #LiveBudget#BudgetSession #Budget2019

 

12:21 PM - Feb 1, 2019

 

GST collections in January 2019 has crossed Rs 1 lakh crore #Budget2019 #BudgetSession #LiveBudget

 

12:21 PM - Feb 1, 2019

 

 

The Group of Ministers is examining how prospective house buyers can benefit under Goods & Services Tax (GST) #BudgetSession #LiveBudget #Budget2019

 

12:20 PM - Feb 1, 2019

GST is probably the biggest taxation reform implemented since Independence; with tax consolidation, India became one common market; inter-state movements became faster through e-way bills, improving Ease of Doing Business #LiveBudget #Budget2019 #BudgetSession

 

12:18 PM - Feb 1, 2019

 

 

Govt abolished Customs Duty on Several Capital Goods #LiveBudget #Budget2019

12:12 PM - Feb 1, 2019

 

 

Direct tax collections increased from Rs 6.38 lakh crore in 2013-14 to almost Rs 12 lakh crore; The tax base is up from Rs 3.79 crore to 6.85 crore #LiveBudget #Budget2019 #BudgetSession

 

12:08 PM - Feb 1, 2019

 

Within nearly two years, almost all assessment and verification of IT returns will be done electronically by an anonymized tax system without any intervention by officials: @PiyushGoyal #LiveBudget #Budget2019

 

12:07 PM - Feb 1, 2019

 

GST, Biggest Tax Reform in India #LiveBudget #Budget2019

 

12:04 PM - Feb 1, 2019

 

Govt focused on Reducing tax burden of Middle Class #LiveBudget #Budget2019

 

12:03 PM - Feb 1, 2019

 

IT Return Scrutiny without Human Interventions #LiveBudget #Budget2019

 

12:01 PM - Feb 1, 2019

 

In Two Years, IT Return Process and Refund in 24 Hrs #LiveBudget #Budget2019

 

12:00 PM - Feb 1, 2019

 

 

 

IT dept Now Function Online #Budget2019 #LiveBudget

11:59 AM - Feb 1, 2019

 

Direct tax Collections, Number of IT Returns Filed Increased#Budget2019 #LiveBudget

 

11:59 AM - Feb 1, 2019

 

 

We have already disbursed Rs 35,000 crore for our soldiers under 'One Rank One Pension', substantial hike in military service pay has been announced #LiveBudget #Budget2019

 

11:55 AM - Feb 1, 2019

 

 

75% of woman beneficiaries under Pradhan Mantri Mudra Yojana, 26 weeks of maternity leave and the Pradhan Mantri Matritva Yojana, are all empowering women in the country #LiveBudget #Budget2019

 

11:49 AM - Feb 1, 2019

 

 

To ensure cleaner fuel and health assurance, we embarked upon Pradhan Mantri Ujjwala Yojana, a programme to give 8 crore free LPG connections to rural households, 6 crore connections have been given already #Budget2019 #LiveBudget

 

11:49 AM - Feb 1, 2019

 

2% Interest-Cut for GST Registered Small Traders #LiveBudget #Budget2019

 

11:48 AM - Feb 1, 2019

 

 

Instead of rescheduling of crop loans, the farmers severely affected by natural calamities will get 2% interest subvention and additional 3% interest subvention upon timely repayment #LiveBudget #Budget2019

 

11:46 AM - Feb 1, 2019

 

India second largest hub for StartUps: FM #LiveBudget #Budget2019

 

11:44 AM - Feb 1, 2019

 

 

 

 

 Rs. 500 Cr for Mega Pension Scheme #Budget2019 #LiveBudget

 

11:41 AM - Feb 1, 2019

 

Monthly Pension of Rs. 3000 for Employees of Unorganized Sector #LiveBudget #Budget2019

 

11:41 AM - Feb 1, 2019

 

 

A pension scheme is being launched called Pradhan Mantri Shram Yogi Mandhan, to provide assured monthly pension of 3000 rupees per month, with the contribution of 100 rupees per month, for workers in unorganized sector after 60 years of age #LiveBudget#Budget2019#BudgetSession

 

11:41 AM - Feb 1, 2019

 

Instead of rescheduling of crop loans, the farmers severely affected by natural calamities will get 2% interest subvention and additional 3% interest subvention upon timely repayment #BudgetSession #LiveBudget #Budget2019

 

11:36 AM - Feb 1, 2019

 

 

Under the Pradhan Mantri Kisan Samman Nidhi, 6000 rupees per year for each farmer, in three instalments, to be transferred directly to farmers' bank accounts, for farmers with less than 2 hectares landholding: Piyush Goyal #LiveBudget #Budget2019 #BudgetSession

 

11:35 AM - Feb 1, 2019

 

To provide assured income support for small and marginal farmers, Pradhan Mantri Kisan Samman Nidhi scheme has been approved: @PiyushGoyal #LiveBudget  #BudgetSession #Budget2019

 

11:34 AM - Feb 1, 2019

 

 

 

 

Almost 3 lakh crore has already been recovered in favour of banks and creditors, big defaulters have also not been spared by our government #LiveBudget #Budget2019 #BudgetSession

Finance Minister Piyush Goyal in budget speech: Inflation in December 2018 was 2.1%. Fiscal deficit has been brought down to 3.4% in the revised estimate of 2018-19. #LiveBudget #Budget2019 #BudgetSession

11:16 AM - Feb 1, 2019

 

Inflation is a hidden and unfair tax; from 10.1% during 2009-14, we have broken the back of back-breaking inflation: @PiyushGoyal #LiveBudget #Budget2019 #BudgetSession

 

11:11 AM - Feb 1, 2019

Finance Minister Piyush Goyal begins budget speech in the Parliament #BudgetSession #LiveBudget #Budget2019

 

11:09 AM - Feb 1, 2019

 

 

 

Union Cabinet has approved the interim Budget 2019-20. #Budget2019 #LiveBudget

 

11:06 AM - Feb 1, 2019