The government proposed many changes in income tax provisions for this year. Finance minister Nirmala Sitharaman in her maiden budget kept the income tax slab rates unchanged but announced a slew of new income tax proposals that could impact many taxpayers. The government today announced that Aadhaar and PAN would be made interchangeable for tax-filing purpose. This means that if you don’t have a PAN, you can file returns using Aadhaar. She maintained a status quo on income tax slabs and rates in the Budget 2019 and announced major changes on filing Income Tax Return.
The Finance Minister announced the government’s decision to make it mandatory for individuals depositing more than Rs. 1 crore in a current account in a year to file income tax returns. Also, the income tax deduction of Rs 1.5 lakh on home loans for affordable houses costing below Rs 45 lakh. This benefit will be available for home loans taken until March 2020. Cumulatively, the interest paid on home loan deduction will go up to Rs 3.5 lakh, from the current Rs 2 lakh for self-occupied house property.
Changes announced on filing Income Tax Return:
- The government proposed to make the filing of return compulsory in the following cases:
- People who deposit more than Rs. 1 crore in a current account in a year
- People who spend more than Rs. 2 lakh on foreign travel in a year
- People who spend more than Rs. 1 lakh on electricity in a year
- People who claim capital a capital gain exemption (under Section 54/54F) that brings them within the exemption limit.
- The government also announced Rs. 1.5 lakh income tax deduction on interest paid on loans for the purchase of electric vehicles.
- The government announced “interchangeability of PAN and Aadhaar”. Those who do not have PAN will be able to file income tax returns by using their Aaddhar number. It will also be accepted instead of PAN under the Income Tax Act.
- The government has proposed to make the PAN allotted to a person who fails to intimate the Aadhaar number within a notified date inoperative. Currently, the Income Tax Act provides for making PAN invalid if it is not linked with Aadhaar within a notified date.
- The government increased income tax surcharge for HNIs (high net worth individuals) earning more than Rs 2 crore in a year.
- Those earning between Rs 2-5 Crore will have shell out 3% more, with surcharge rate being increased from 15% to 25%.
- Those earning above Rs 5 crore will have to shell out a surcharge of 37%, from the current 15%.
- The government proposed that persons who enter into certain high value transactions have to mandatorily file their tax returns even if their taxable limit is less than Rs 2.5 lakh.
- The transactions include depositing an amount exceeding Rs 1 crore or more current accounts; has incurred an expenditure of more than Rs 2 lakh for himself or any other person for travel to a foreign country; or has incurred an expenditure of an amount or aggregate of the amounts exceeding Rs 1 lakh towards consumption of electricity.