24.2 C
New Delhi
Tuesday 18 February 2020

Tax rules change to help govt track people’s income

There will be 5% tax deduction at source on the net income proportion of life insurance maturity proceeds as part of the new changes

New Delhi: The government will get more access to taxpayers’ income information from Sunday when a slew of Budget announcements such as a new levy on cash withdrawal and interchangeability of Aadhaar number and PAN comes into effect. Most of these changes, such as widening the scope of deduction at source, will help the government track income of assessees. An amnesty scheme to clear pending service tax and service duty, from before the introduction of the goods and services tax (GST), will also open for four months. The Budget presented on 1 July introduced a levy of 2% at source on cash withdrawals of Rs 1 crore and more. The new Section 194N has been introduced in the Income-Tax (I-T) Act.

Also, 180 million, or half of all PAN cards, may be rendered invalid, so their owners will need to link their PAN to Aadhaar, or cite their Aadhaar number for purposes where PAN was required earlier. The Budget has made PAN and Aadhaar interchangeable, but both have to be linked by 1 September. If one files I-T returns only with Aadhaar, without citing PAN, a new PAN will be generated.

As an anti-evasion measure, the Budget fine print revealed, the onus of PAN and Aadhaar authenticity was on the person receiving the documents for transactions.

Individuals or Hindu Undivided Families paying Rs 50,000 for renovation of homes or other services in a year will have to deduct 5% tax. But they will not need to obtain a tax deduction account number.

There will also be a 5% tax deducted at source on the net income proportion of life insurance maturity proceeds, as part of the new changes in the I-T Act. Net income is the total sum received after deducting the total premium paid.

Till now, this was exempted from tax if the annual premium did not exceed 10% of the sum assured.

The government has also expanded the scope of reporting requirement of financial transactions by removing the minimum threshold of Rs 50,000. From 1 September, banks and financial institutions could be asked to report even small transactions to the tax department to verify tax returns.

Stay on top - Get daily news in your email inbox

Sirf Views

Tapas Pal, A Death No One Would Genuinely Condole

In 1980, after Bengali film superstar Uttam Kumar died, Dadar Kirti of Tarun Majumdar was released after Durga Puja. The voice...

Must India Invest In Donald Trump?

As many of his cabinet picks know, to their eternal regret and shame, his commitment lasts only as long as you are gullible

Protesters Need Economic Education, Mr Bhagwat

There is no escape from misery unless teams of economic educators convince all sections of society socialism is the cause of their distress

BJP Could Not Have Won With This Approach To Delhi

From not paying attention to the corruption-ridden MCD to aloof leaders whose houses witnessed no activity during campaigns, BJP went all wrong in the Delhi assembly election

AAP Win In Delhi Was Foregone Conclusion: 5 Reasons

The five factors that contributed to the AAP victory have been arranged in the decreasing order of relevance; the first three will remain constant for a few more Delhi elections

Related Stories

Leave a Reply

For fearless journalism

%d bloggers like this: