Union Budget 2019 – Impact of Direct tax – Panel discussion on Whatsapp


CA Saurabh Gupta, Gurgaon: Good evening everyone
CA Saurabh Gupta, Gurgaon: We welcome you all on discussion and analysis of Union Budget
CA Manoj Gupta, Jodhpur: Welcome all
CA Saurabh Gupta, Gurgaon: We welcome our senior panelist Arun Khowala ji from Patna, Welcome Manoj Gupta Ji from Jodhpur, CA C P Chugh ji will join us shortly. May I please request Manoj ji to pls share Budget highlights on Direct taxes part.

CA Manoj Gupta, Jodhpur: No change in basic exemption limit
CA Manoj Gupta, Jodhpur: Rebate under section 87A if income does not exceed Rs 500000 till Rs 12500
CA Manoj Gupta, Jodhpur: Surcharge for high income bracket increased
For income from 1 crore to 2 crore 15pc
For 2 to 5 crore 25pc
For 5 crore and above 37pc
CA Saurabh Gupta, Gurgaon: May all the audience earn high income and all pay highest surcharge

CA Saurabh Gupta, Gurgaon: Sir, it was presumed that high agriculture income will be brought to tax. Pls share your views with group in this regard. Is there any change related to agricultural income
CA Manoj Gupta, Jodhpur: No whisper in budget

CA Arun Khowala, Patna: Even tds be deducted by non audit assesses
CA Manoj Gupta, Jodhpur: Any gift of money or property where value exceeds sum specified in section 56(2)(x) shall be deemed to accrue or arise in India that too from today itself
CA Manoj Gupta, Jodhpur: This was still taxable but was out of tax net due to operation of section 5 read with 9. Now this loophole plugged
CA Saurabh Gupta, Gurgaon: Yes Sir, like on rent

CA Manoj Gupta, Jodhpur: Any withdrawal upto sixty percent from New Pension Scheme on closure of scheme or on opting out shall be exempt. Earlier this limit was restricted to 40PC.
CA Manoj Gupta, Jodhpur: Now PCIT or CIT can look into compliance with other law while granting registration.
Also can cancel registration on this ground.
This is effective from 1.09.2019
Advocate R K Soni, Delhi, Delhi: ??? Sir pl elaborate ?

CA Manoj Gupta, Jodhpur: Provisions of section 40(a) (i) made at par with those of 40(a)(ia).
CA Manoj Gupta, Jodhpur: I am taking important amendments one by one let us move further thereafter. My suggestion
Advocate R K Soni, Delhi: 👍🏽
CA Arun Khowala, Patna: Was referring to 194M
CA Manoj Gupta, Jodhpur: So no disallowance if payee files the return and pays the tax
Advocate R K Soni, Delhi: Contd…..Manoj ji

CA Manoj Gupta, Jodhpur: Interest payable to deposit taking NBFC or systemically important non deposit taking NBFC to be allowed only on payment basis. Effective AY 2020 21
CA Manoj Gupta, Jodhpur: Interest on NPAs of above NBFC taxable on receipt basis Effective AY 2020 21
CA Manoj Gupta, Jodhpur: From hereon I will mention date of amendment only if it is not effective from AY 2020 21
Advocate R K Soni, Delhi: Other panelist are requested to pl share the imp updates with Manoj ji.
CA Manoj Gupta, Jodhpur: If start up does not fulfill conditions mentioned in DIPP notification dated 19.02.2019 then money received in excess of face value will be taxed in the year of failure.
This is harsh as under section 56(2)(viib) only the consideration in excess of Fair value is taxed
CA Manoj Gupta, Jodhpur: Money received by start ups from specified funds will not be taxed under section 56(2)(viib)
CA Manoj Gupta, Jodhpur: Money or property received from notified class of persons will not be subject to 56(2)(x)
CA Saurabh Gupta, Gurgaon: Manoj ji, is this is a welcome step to stop tax terrorism in the name of angel tax

CA Manoj Gupta, Jodhpur: section 80C deduction can be claimed by central govt employee in tier-II pension funds
CA Saurabh Gupta, Gurgaon: Govt wants to promote NPS like anything ..
CA Saurabh Gupta, Gurgaon: Is it not giving desired result
CA Saurabh Gupta, Gurgaon: Non taxable limited also raised?
CA Manoj Gupta, Jodhpur: Central govt contribution to NPS enhanced to 14PC in case of CG employees under section 80CCD from 1.4.2019
CA Manoj Gupta, Jodhpur: 14pc of salary
CA Saurabh Gupta, Gurgaon: Why CG employees only

CA Manoj Gupta, Jodhpur: Only Sitharaman knows

CA Saurabh Gupta, Gurgaon: I think no other takers of NPS

CA Manoj Gupta, Jodhpur: New section 80EEA
1. Deduction for interest on borrowed capital on acquisition of residential property upto Rs 150000
2. Loan should be sanctioned on or after 1.4.2019 to 31.3.2020
3. Loan to be from financial institutions
4. Stamp value of house not to exceed 45Lakhs
5. Assessee shall not own any residential house on date of sanction of loan
6. Deduction allowable to all individuals resident or not
Grey area
One may acquire another house after loan sanction
Why restrict deduction for acquisition means no deduction if house constructed

CA Manoj Gupta, Jodhpur: 60pc
CA Manoj Gupta, Jodhpur: Because no agent

CA Manoj Gupta, Jodhpur: Now there are due to 80CCD(1B)
CA Saurabh Gupta, Gurgaon: Sir, we are not able to understand just by mentioning Section
CA Manoj Gupta, Jodhpur: New section 80EEB
1. Deduction for interest payable upto 150000 for loan taken for purchase of electric vehicle
2. Loan to be sanctioned during 1.4. 2019 to 31.3.2023
3. Loan to be from financial institution
CA Manoj Gupta, Jodhpur: You can get Rs 50000 deduction over and above 150000 in 80C if you invest in NPS Tier I account
CA Saurabh Gupta, Gurgaon: I think it’s a complicated investment product for a common man.
CA Manoj Gupta, Jodhpur: No it’s simple and good one
CA Saurabh Gupta, Gurgaon: Hope costly electric vehicles gets some takers with this benefit
CA Manoj Gupta, Jodhpur: Tata launched EV in range of 10L only but top speed is 80 and in single charge goes 150km only
CA Saurabh Gupta, Gurgaon: I think a good move in direction of fighting the pollution problem.
CA Saurabh Gupta, Gurgaon: As of now, good infrastructure require
CA Saurabh Gupta, Gurgaon: When Maruti came, our country didn’t even had the roads
CA Saurabh Gupta, Gurgaon: Let’s be hopeful of good future of electric vehicles
CA Manoj Gupta, Jodhpur: They are planning to open small charging points

CA Saurabh Gupta, Gurgaon: We welcome CA C P Chugh Sir, from Delhi for his kind presence.
CA C P Chugh, Delhi, Delhi: Sorry i was held up in another discussions. Back to home
Wlll join shortly
CA Saurabh Gupta, Gurgaon: No issues Sir, we wait your pragmatic interpretations.
CA Manoj Gupta, Jodhpur: Compulsory return filing
1. If one claim deduction under sections 54 to 54GB return to be filed compulsorily if total income before such deduction exceeds basic exemption limit
2. Any person who deposits 1 crore rupees in one or more bank accounts
3 Any person who incurs expenditure of 2Lakh on foreign travel for himself or any other person
CA Saurabh Gupta, Gurgaon: Non invasive step to get complete report of property sale purchase transactions
CA Manoj Gupta, Jodhpur: Any person who incurs expenditure of more than 1 lakh on consumption of electricity to file return compulsorily
CA Saurabh Gupta, Gurgaon: Giving details of property buyer already made mandatory in AY 2019-20 ITR forms
CA Saurabh Gupta, Gurgaon: Heard that people use good cash amounts to pay electricity bills. Does that mean Govt is also analysing discoms data
CA Manoj Gupta, Jodhpur: Relief under section 89 to be taken into account while computing SA tax and interest under section 234A to 234C. This is effective from 1.4.2007
CA Manoj Gupta, Jodhpur: Big relief to nany
CA Saurabh Gupta, Gurgaon: 2007 sir? We have paid intereat under 234ABC, will it be refunded
CA Manoj Gupta, Jodhpur: Yes file rectification
CA Saurabh Gupta, Gurgaon: That’s a very good practical news. Good that our Govt is understanding logical issues
CA C P Chugh, Delhi, Delhi: Yes rectification can b filed. A genuine hardship removed.
CA Saurabh Gupta, Gurgaon: Welcome again Sir
CA C P Chugh, Delhi, Delhi: TDS on property now to include all other charges. Another grey area created for builders
CA Manoj Gupta, Jodhpur: Rate of TDs under section 194DA increased to 5 PC from 1pc effective from 1.09.2019
CA Saurabh Gupta, Gurgaon: First time, govt has taken any step which does not go in favor of insurance agents/insurance companies
CA Saurabh Gupta, Gurgaon: But, this is a hardship, agents are not earning that much
CA C P Chugh, Delhi, Delhi: Another amendment to benefit revenue.

Non-linking of pan/aadhar will now render pan inactive than invalid
CA Manoj Gupta, Jodhpur: TDS under section 194IA to be deducted on consideration including club membership fee, car parking fee, water facility fee, maintenance fee, advance fee or similar charges
CA Saurabh Gupta, Gurgaon: Sir, does it also rests the current interpretation issues
CA Manoj Gupta, Jodhpur: No this tds on payments to policy holder
CA Saurabh Gupta, Gurgaon: Means Govt doesn’t want to go slow on Aadhar even after Hon’able Supreme Court orders. Good step
CA C P Chugh, Delhi, Delhi: But now TDS on net growth than on entire sum paid. Will reduce litigation and benefit assessee who have breached 10(10d)
CA Manoj Gupta, Jodhpur: Till now consideration included only property price now it includes all other charges
CA Manoj Gupta, Jodhpur: Yes
CA Saurabh Gupta, Gurgaon: Thank you sir for explaining it so well
CA Saurabh Gupta, Gurgaon: And clearing the doubt

CA Manoj Gupta, Jodhpur: Rate of TDs under section 194DA increased to 5 PC from 1pc effective from 1.09.2019 but tds only on income component not on entire sum received under insurance policy
CA Saurabh Gupta, Gurgaon: Great Manoj ji
CA C P Chugh, Delhi, Delhi: Whether such other charges incidental to transfer would also include stamp duty? And if so will this amount to grossing up of stamp duty, a big question
CA Saurabh Gupta, Gurgaon: I also invite viewers to ask questions which panel experts can take up.
CA Divyesh Sodha: No stamp duty is a payment to govt. Not a consideration for purchase
CA C P Chugh, Delhi, Delhi: But of course incidental to transfer, the wording used in amendment.
CA Manoj Gupta, Jodhpur: Individual or HUF not liable to audit to deduct tax on contractual payments or fees for professional services if payment exceeds 50 Lakhs. TDS at 5pc.
This provision will apply to all individual or HUF whether carrying any business or profession or not.
New section194M from 1.9.2019
CA C P Chugh, Delhi, Delhi: I do not fall in the category of professional being paid 50 lakh 😃😃
CA Saurabh Gupta, Gurgaon: Another attack on sham transactions
CA Manoj Gupta, Jodhpur: New section 194N
Tax to be deducted at 2pc where cash withdrawals from an account maintained with bank or post office or co operative society engaged in banking business.
Again grey area
What if withdrawals are made from multiple accounts each account withdrawal limited to 1 crore or less.
CA C P Chugh, Delhi, Delhi: Another amendment to sec 9 of deemed gift is likely to create litigation
CA Manoj Gupta, Jodhpur: Why so

Querist: Agree

CA C P Chugh, Delhi, Delhi: I think this can b taken care of. Each account is pan linked.

Big question who will deduct in case from all accounts withdrawls is less than 1cr
CA Saurabh Gupta, Gurgaon: Sir(s), as per members request, let’s move on to indirect taxes
CA Manoj Gupta, Jodhpur: Now application to AO for lower deduction under section 195(2) to be onljne
CA Manoj Gupta, Jodhpur: Just few minutes
CA Manoj Gupta, Jodhpur: Effective 01.11.2019
CA Saurabh Gupta, Gurgaon: This is again a good move towards corruption free India
CA C P Chugh, Delhi, Delhi: Only amendment effective from today itself. And how will the quantum of gift to b evaluated. Also section 56 exemption not withdrawn
CA Manoj Gupta, Jodhpur: No exemption under section 56
Value as per 56
CA Saurabh Gupta, Gurgaon: Pls explain more on it
Querist: It is applicable to bank if withdrawal exceeds rs 1 CR from that Bank
CA Saurabh Gupta, Gurgaon: I also invite viewers to ask queries which panel experts can take up.
CA C P Chugh, Delhi, Delhi: One more tax payer friendly amendment is to section 200
Advocate R K Soni, Delhi: MAT also unchanged
Querist: Each charge takes minimum two hours. They may come out with replacement of empty batteries with charged batteries at such stations.
CA Manoj Gupta, Jodhpur: Currently gifts above 50000 in aggregate are taxable under section 56(2)(x)
This provision apply to NR also
But they were escaping its clutches due to section 5 which provides only income earned in India or deemed to be so under section 9 can be taxed in case of NR
CA Manoj Gupta, Jodhpur: It is also planned
CA Saurabh Gupta, Gurgaon: Well said Manoj ji
CA Manoj Gupta, Jodhpur: Business having turnover above 50 crores to accept payments via electronic mode else facd penalty of 5000 per day
CA Saurabh Gupta, Gurgaon: Manoj ji, does it mean that they can’t accept cash
CA Manoj Gupta, Jodhpur: No
CA Arun Khowala, Patna: I think they are required to provide facility for electronic payments
CA C P Chugh, Delhi, Delhi: Yes they cannt refuse to epayments.
CA Saurabh Gupta, Gurgaon: I think everyone provide this facility as on date today, why such enforcement bu Govt
CA Saurabh Gupta, Gurgaon: By
CA Manoj Gupta, Jodhpur: Prosecution for failure to furnish return by due date where tax payable on total income determined on regular assessment exceeds Rs 10000 after reducing advance tax and self assessment tax
Querist: There may be a customer who insists on cash payment then

CA C P Chugh, Delhi, Delhi: In budget speach Honble FM was speaking som incentives to digital payment. Did not find any amendment in It Act. What was that
CA Manoj Gupta, Jodhpur: No problem . It is only requiring facility to be provided.
CA Saurabh Gupta, Gurgaon: Cash mode is not restricted
CA Saurabh Gupta, Gurgaon: Banks to not to charges NEFT/ RTGS etc?

CA C P Chugh, Delhi, Delhi: Another relief to tax payer. Limit of 3000 was fixed in ancient times and misused to prosecute Late Smt Jaya Lalita
CA Manoj Gupta, Jodhpur: Scope of section 285BA to be extended to any person not necessarily be financial institution
CA C P Chugh, Delhi, Delhi: Is that amendment to RBI act
CA Saurabh Gupta, Gurgaon: But still 10,000 is a very low number for govt to talk of prosecution.
CA Saurabh Gupta, Gurgaon: Pls elaborate sir
CA Divyesh Sodha: Business should provide such facility to accept payment in electronic mode like card payment. But if customer wants to pay in cash they can accept
CA Manoj Gupta, Jodhpur: Not a relief. It is a bomb. Now if u file ITR after due date then prosecution may be issued
CA Arun Khowala, Patna: Provides for facility for accepting payment thru prescribed electronic mode in addition to other electronic mode of payment
CA C P Chugh, Delhi, Delhi: Yes. But then a person with tax liability of greater than is reqd to pay advance tax
CA Manoj Gupta, Jodhpur: Yes
Advocate R K Soni, Delhi: FLC applicable for scrutiny only?
CA C P Chugh, Delhi, Delhi: If no more question on direct taxes, penal invite queries on indirect taxes
CA Saurabh Gupta, Gurgaon: Though they simplified on many things but I think have made it loud that defaulters should get ready for prosecution
CA C P Chugh, Delhi, Delhi: There should not b any soft corner for willful defaulters
CA C P Chugh, Delhi, Delhi: How faceless scrutiny will b. Time to answer
CA Manoj Gupta, Jodhpur: Good news for declarants under 2016 scheme now they can pay tax
CA Saurabh Gupta, Gurgaon: Sir, the word used is without human intervention.. This is more surprising.
CA C P Chugh, Delhi, Delhi: 201
CA Manoj Gupta, Jodhpur: That is all on direct taxes

CA Manoj Gupta, Jodhpur: Now we invite queries if any
CA Manoj Gupta, Jodhpur: Faceless assessment to come
Querist: This session on direct was fantastic.
CA Saurabh Gupta, Gurgaon: Thank you Arvind Ji, your words are most precious.
CA C P Chugh, Delhi, Delhi: Amendment proposed is in respect of indivdual/HUF. Imo it should be 30% and applicable cess
Querist: Surcharge will be 12 percent only instead of 37 percent
Querist: Thanks
CA C P Chugh, Delhi, Delhi: Moderators to announce next session
CA C P Chugh, Delhi, Delhi: Discussions are now closed. Good Night to every one
CA C P Chugh, Delhi, Delhi: Thanks