Major Changes in Income Tax act which one needs to keep in mind while accounting for F.Y. 2020-21:
1. Dividend received after 1st April 2020 won’t be tax free unless DDT on same has been paid under 115-O or same is taxable under 115BBDA.
2. TDS on income from mutual fund except capital gain income u/s 194K of the income tax act where TDS @10% where amount of income exceeds Rs. 5,000/-.
3. From this financial year assessee needs to select whether he/ she wants to opt for lower tax rate u/s 115BAC.
4. Also the employer needs to take declaration from it’s employee now in the start of the year whether they are going to opt for new tax rate or stay in old tax regime.
5. Changes in the definition of resident and ordinary resident as amended by Finance Act, 2020.
6. TDS u/s 194J needs to be deducted @2% on technical services and royalty where such royalty is in the nature of consideration for sale, distribution or exhibition of cinematographic films.
7. TDS @20% needs to be deducted on dividend paid to non-resident.
8. Equalisation levy @2% where the payment is made to an e-commerce operator who is a non resident is not having PE in India and with whom transaction of more than 2 crore has been done during a year.
Changes applicable from 01.07.2020:
1. Amendment has been made to Section 194N which has not made TDS applicable on person’s withdrawing more than 20 lakh in a year from their bank account instead of 1 crore and who have not filed return of income for previous 3 years.
Changes applicable from 01.10.2020:
1. TDS @1% by e-commerce operator on payment made to e-commerce participant. However, no TDS would be deducted in case of individual/ HUF participant if amount is less than 5 lakh in a year.
2. TCS u/s 206C (1G) and (1H) which includes payment by authorised dealer, overseas tour package dealer and seller of goods other than export sales.
This article is just for information purpose it is always advisable to hire a professional for practical execution. If you need assistance you can ask a question to our expert and get the answer within an hour or post a comment about your views on the post and also subscribe to our newsletter for latest weekly updates.
