The finance minister does not always read everything that is written in the Finance Bill tabled in the Parliament for approval. There is a lot more information in the fine print. There are sub-sections added or deleted, new clauses or sections are added or deleted to certain tax rules that could affect an individual or the business. Here are some of these points in detail
Also read: Union Budget
The new plant and machinery to be installed to get an additional 15% investment allowance. It is a deduction from the taxable income for the business. However, businesses will not be eligible if the plant or machinery was used either within India or outside by some other person. If this plant and machinery is installed in any office premises or any residential accommodation, then this would again not qualify for the benefit. Hence, there is a clear manner as regards to the place where this has to be installed.
While there has been an announcement that there will be a tax credit of Rs 2000 for those earning less than Rs 5 lakh in a year, there is a slight twist for those who are actually earning just above the Rs 2 lakh figure. For all those earning between Rs 2 lakh and Rs 2.2 lakh, the tax credit will be only upto the tax to be paid which will be less than Rs 2,000. So for someone earning Rs 2.1 lakh, the tax liability is Rs 1,000 and hence the tax credit is also restricted to Rs 1,000.
Getting the tax benefit for the first time home owner could end up being a bit tricky. This is because they have to be careful in ensuring that the loan is taken only from a financial institution and not any other entity. The term financial institution has not been defined yet and this is important otherwise the benefit would not be allowed.
Also read: Highlights of Union Budget 2019
Currently, if there is a gift received in kind in the form of an immovable property without any money changing hands, then the value of the property in excess of Rs 50,000 is taxed in the hands of the receiver. Now, even a situation where there is some amount paid for such transfer of immovable property and this amount is less than the stamp duty value by Rs 50,000 or more then there would be a tax element that would arise for the receiver.
A key man insurance policy is taken on the life of the key person in the organisation. The company should not suffer financially due to the loss of life of the key man. The budget makes some changes here. Currently, if it is assigned to the key man before its maturity, it becomes a normal life insurance policy. However, the budget makes a change in the rule. Now a change has been made to ensure that even if such a policy is assigned before maturity, it would remain a key man policy. However, the amount received as a payout would not get the benefit of tax free status.
Also read: Union Budget 2019 vs. 2018
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