analysis of union budget, 2019 icai chapter, dubai · local sourcing norms will be eased for fdi in...
Post on 24-Sep-2020
0 Views
Preview:
TRANSCRIPT
ANALYSIS OF UNION BUDGET, 2019
ICAI CHAPTER, DUBAI
CA. T.N. Manoharan
Chairman,
Canara Bank
STATE OF THE ECONOMY in FY19
Fiscal deficit declined from 3.5% of GDP in FY 2017-18 to 3.4% in FY 2018-19. Target is 3.3%
01
02
03
04
05
06
Growth of GDP moderated to 6.8% in FY 2018-19 from 7.2% in FY 2017-18.
Inflation (CPI) contained at 3.4%.
Expected to cross 3 trillion GDP by end of this year
Global FDIs in India remained strong at $ 64.37 billion, a growth of 6%.
Current account deficit at 2.1% of GDP.
GDP & Fiscal Deficit
Fiscal Deficit (%)
-4.8
-5.91
-4.93-4.48
-4.1 -3.89-3.52
-3.53
-3.42 -3.3
-7
-6
-5
-4
-3
-2
-1
0
SOVEREIGN DEBT TO GDP & INFLATION
106%
50%
238%
60% 70%
97% 87%
130%
88%
17%
0%
50%
100%
150%
200%
250%
300%
2018 % of GDP
5.80%
4.90%4.50%
3.60%3.48%3.88%
0%
1%
2%
3%
4%
5%
6%
7%
2014 2015 2016 2017 2018 2019
Inflation %
Approval for 11
PBs and 10 SFBs in 2015
Data Analytics and SaaS
P2Plending Regulati
on
RupayDebit Card –28.4 Cr
92.05% tele-density
35.99 crore Jan Dhan accounts
opened
99% Population Coverage through Aadhaar
Jam Trinity
JAM
GDP CONTRIBUTION SECTOR-WISEAgriculture
Sector16% Mining &
quarrying3%
Manufacturing17%
Electricity, gas, water supply &
other utility services
3%
Construction7%
Trade, hotels, transport,
communication and services related to
broadcasting…
Financial, real estate & prof
servs21%
Public Administration, defence and other
services15%
BUDGET 2019 PROPOSALS
21p
Borrowings and Other Liabilities
3p
4p
Customs
8p
9p
Union Excise Duties
16pIncome
Tax
19p
Non-Tax Revenue
20p
Non-Debt Capital Receipts
RUPEE COMES FROM RUPEE GOES TO
GST & Other Taxes
Corporate Tax
23p
Defence
5p
Pensions
7p
Finance Commission
& Other Transfers
8p
8p
Subsidies
9p
Other Exp
9p
States’ Share of Taxes &
Duties
13p
Interest Payments
Centrally Sponsored Schemes
Central Sectoral Schemes
2019 BUDGET
Capital Gain exemption
claimed cases must file
returns if before allowing
such exemption income
exceeds limit .
Faceless e-assessment
with no human interface
to be launched.
DIRECT TAXRs 1.5 lakh on interest paid
on loans taken up to
31.03.2020 for purchase of
house up to Rs 45 lakhs.
Aadhaar and PAN
interchangeable for
filing Income Tax Returns
and other purposes.
Deduction of Rs. 1.5
lakh on interest paid on
electric vehicle loans.
Return filing mandatory if
high value transaction is
entered into even if there is
no taxable income
10
Surcharge increased by 3% for
individuals etc., having taxable
income between Rs 2 crore and
Rs 5 crore and by 7% where
income exceeds Rs. 5 crore.
A slew of tax benefits for
IFSC’s:
❖ Capital Gains benefit on
transfer of units is
extended to Category III
AIF
❖ Interest on loans received
by NR from units located
in IFSC to be exempt
❖ Dividends declared from
accumulated income also
to be exempt from DDT.
❖ DDT Exemption to be
extended to MF’s in IFSC in
addition to companies.
❖ Profit Linked deduction
can now be claimed for 10
consecutive years out of
the first 15 years.
DIRECT TAX
Domestic companies to be
taxed at 25% and not at 30% if
the turnover/gross receipt is
upto INR 4 bn ( INR 2.5 bn)
Tax rate of 20% to be
applied on buyback of
shares by listed companies
post 5 July 2019.
ENHANCED SURCHARGE RATES
Income Tax
Slab
Existing
Surcharge
Proposed
Surcharge
Maximum
Marginal
Tax Rate
50 Lakh – 1 crore 10% 10% 34.20%
1 crore – 2 crore 15% 15% 35.88%
2 crore – 5 crore 15% 25% 39.00%
More than 5 crore 15% 37% 42.74%
TDS of 2% on cash withdrawal exceeding Rs.1
Crore a year from ‘a’ bank account-
Sec.194N
TDS on any amount received under a life
insurance policy which is not exempt shall be at 5%
of the taxable amount (Net) and not at 1% on the gross –Sec.194DA
TDS at 5% by Individuals and HUF on Contract
payments & Professional fees if amount exceeds
Rs.50 lakhs in a year-194M
TDS on interest to a NR/Foreign Co., in respect of Rupee
denominated bond U/S.194LC at 5% from
1.4.2019
TDS at the time of purchase of Immovable Property at
the 1% shall be on a consideration that shall include value of other
benefits-194-IA
1
2
3
4
5
Tax Deduction at Source
NRI Proposals
Gifts received by NRs from Resident is taxable
Local Sourcing norms will be eased for FDI in single
brand retail sector
FPI permitted to subscribe to listed debt securities of ReiTs and InvITs
Black money and Impositionof Tax Act, 2015 now includesNRI with retrospective effect.
FDI in aviation, media,Insurance and animation sectors
Merger of the NRI portfolioinvestment scheme routewith FPI route.
NRI with Indian passports to get Adhaar card on arrival immediately (erstwhile after 180 days).
01
02
06 03
05 04
07
INVESTMENTS AND MARKETS
Investment by FIIs and FDIs in debt securities in
infrastructure debt funds to be allowed.
A social stock exchange is proposed, for social and voluntary organizations, to raise capital, equity and debt.
Further recapitalization of PSBs: USD 10 bn.
SEBI to consider raising the minimum Public Shareholding threshold of 25% to 35% in listing Companies
Statutory limit for FPI in a company to be increased from 24%
to sectoral foreign investment limit.
Reduction in net owned fund requirement from INR 50 bn to INR 10 bn for units of foreign reinsurance company in IFSC.
INDIRECT TAX
< 5 Crores Quarterly
returns
5% BCD on imported
books
BCD of 7.5% on oil and gas,
from 5%.
Electronic invoice system
instead of e-way
bill 01
05
02 03 04
0807
Withdrawal of Exemptions on
electronic items
06
Exemption on import of
Defense equipment
SAD & road &
infrastructure
cess by INR
2 per Liter on
petrol
& diesel
Custom Duty from 10% to
12.5% on Gold & other
precious metals
10% Penalty on Profiteered amount
Interest on net tax liability, payable in cash
Amnesty scheme “Sabka Vishwas(Legacy Dispute Resolution)
Scheme”
CG to act as a single disbursement authority to grant refund
Balance in electronic cash ledger from one head to another head
Creation of National Appellate Authority for GST Advance Ruling
INDIRECT TAX
GST COLLECTIONS
103,45994,016
113,865
100,289
0
20,000
40,000
60,000
80,000
100,000
120,000
April May
GST COLLECTION (IN CRS)
2018 2019
Govt projects 18% growth rate in total tax revenues in FY20.
Last yr FY19, gross tax revenue fell short by 8.4% of budget estimates.
Reason – Centre GST collections which was 22% lower than budgeted.
The April-June average for GST mop uphas been Rs. 1.05 trillion, below the Rs.1.12 trillion average estimated to berequired to meet this year’s target.
STARTUPS
19,773 Startups registered as on Date
Loans of up to INR 1 crore to be given to MSMEs for ease of access- 59 minute approval
No scrutiny in respect of share valuation of share premiums
A television channel proposed exclusively for and by start-ups
Capital gains exempt on sale of residential house for Investment in start-ups till FY 2021
25%holding/Voting(50%) and 3 Yrs lock in (5 Yrs)
184
137 126156
137
186158
3652
24
80
121 108
163137
22
0
50
100
150
200
Ease of doing Business Report
2014 2019 Change
WAY FORWARD - EODB
India ranks 77th as against 142nd during 2014.
Countries Rank
New Zealand 1
Singapore 2
Denmark 3
Hong Kong, China
4
Korea 5
USA 8
UAE 12
India 77
THANK
YOU
top related