Firstly, let’s discuss the difference between an Interim Budget and the Union Budget since confusion may arise because of the budgets held twice this year. Interim Budget is the one which is held once in 5 years and Final Budget is the one which is held every year. Interim Budget is only applicable in the year of elections whereas the Union Budget is presented every year. Union Budget is presented in the first week of February every year except in the year of elections. It is held in the month of July during the year of elections.
The Finance Act, 2019 presented by the Hon’ble Finance Minister Nirmala Sitharaman will be remembered for the bahi khata instead of the traditional suitcase.
TDS at the time of Purchase of Immovable Property:
Section 194IA of the Income Tax Act (hereafter referred to as “the Act”) deals with levy of TDS on the consideration paid or credited for transfer of property. The term “consideration for immovable property” is nowhere defined in the Act and thus it is proposed to amend that the said section shall include all charges of the nature of club membership fee, car parking fee, electricity and water facility fees, maintenance fee, advance fee or any other charges of similar nature, which are incidental to transfer of the immovable property. Henceforth, the TDS shall be deducted on the whole amount including club membership fees and other charges. The said amendment shall take effect from 01st September 2019.
The other way of looking at this amendment is that, till 31st August 2019, no TDS is leviable on such membership fees and other charges.
Widening the scope of Section 139:
Section 139 of the Act deals with furnishing return of income. Currently, a person other than a company or a firm is required to furnish the return of income only if his total income exceeds the maximum amount not chargeable to tax, subject to certain exceptions.
Therefore, a person entering into certain high-value transactions is not necessarily required to furnish his return of income. In order to ensure that persons who enter into certain high-value transactions do furnish their return of income, it is proposed to amend section 139 of the Act so as to provide that a person shall be mandatorily required to file his return of income if during the previous year, he:
(i) has deposited an amount or aggregate of the amounts exceeding one crore rupees in one or more current account maintained with a banking company or a co-operative bank; or
(ii) has incurred the expenditure of an amount or aggregate of the amounts exceeding two lakh rupees for himself or any other person for travel to a foreign country; or
(iii) has incurred the expenditure of an amount or aggregate of the amounts exceeding one lakh rupees towards consumption of electricity; or
(iv) fulfills such other prescribed conditions, as may be prescribed
This amendment will take effect from 1st April, 2020 and will, accordingly, apply in relation to the assessment year 2020-21 and subsequent assessment years. The second and third condition needs to be vouched for.