5 changes in Income Tax provisions that will come into effect from September 1

mangaloretoday/ yahoo

New Delhi, Aug 31: 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 tax payers. The government 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.

The changes will come into effect from September 1. So here are the main changes in tax laws:

1. In a move towards simplification of income tax return filing, the government proposed interchangeability of PAN and Aadhaar. This would enable a person who does not have PAN but has Aadhaar to use Aadhaar in place of PAN under the Income Tax Act. The government, however, added that the income tax department would not allot PAN to such person based on Aadhaar after obtaining demographic data from the Unique Identification Authority of India (UIDAI). It is also proposed to provide that a person who has already linked his Aadhaar with his PAN may, at his option, use Aadhaar in place of PAN, the Budget document said.

2. TDS on additional payments made when purchasing immovable property. From September 1, 2019, while buying a property, you will have to include the payment made for other services or amenities such as club membership fee, car parking fee, electricity and water facility fee and so on when computing the amount paid for the property for the purpose of deducting TDS.

3. Even TDS on cash withdrawals exceeding Rs 1 crore on aggregate basis during the year from an account held with a bank, cooperative bank or post office will invite levy of TDS from September 1.

4. From September 1, individuals and HUFs making a payment to contractors and professionals exceeding Rs 50 lakh in aggregate per annum will also be required to deduct TDS at the rate of 5 per cent.

5. TDS will be deducted on non-exempt portion of life insurance. Finance Minister Nirmala Sitharaman in the budget 2019 has proposed to deduct 5% tax on net income portion of taxable life insurance proceeds instead of the current TDS of 1% of the gross maturity payout under the policy. If life insurance maturity proceeds received by you are taxable in your hands, then TDS will be deducted at the rate of five per cent on the net income portion.