New tax slabs and tax benefits as per budget 2020-21. Let's check what are the changes in new tax regime.

Direct Tax

Direct Tax Proposals-To stimulate growth, simplify tax structure, bring ease of compliance, and reduce litigations.

Personal Income Tax:

• Significant relief to middle class taxpayers.
• New and simplifiedpersonal income tax regime proposed:

• Around 70 of the existing exemptions and deductions (more than 100) to be removed in the new simplified regime.
• Remaining exemptions and deductions to be reviewed and rationalised in coming years.
• New tax regime to be optional -an individual may continue to pay tax as per the old regime and avail deductions and exemptions.
• Measures to pre-fill the income tax return initiated so that an individual who opts for the new regime gets pre-filled income tax returns and would need no assistance from an expert to pay income tax.
• New regime to entail estimated revenue forgone of Rs. 40,000 crore per year.

Corporate Tax:

• Tax rate of 15% extended to new electricity generation companies.
• Indian corporate tax rates now amongst the lowest in the world.

Dividend Distribution Tax (DDT):

• DDT removedmaking India a more attractive investment destination.
• Deduction to be allowed for dividend received by holding company from its subsidiary.
• Rs. 25,000 crore estimated annual revenue forgone.

Start-ups:

• Start-ups with turnover upto Rs. 100 crore to enjoy100% deduction for 3 consecutive assessment years out of 10 years.
• Tax payment on ESOPs deferred.

MSMEsto boost less-cash economy:

•  Turnover threshold for audit increased to Rs. 5 crore from Rs. 1 crore for businesses carrying out less than 5% business transactions in cash.
• Cooperatives:
• Parity brought between cooperatives and corporate sector.
• Option to cooperative societies to be taxed at 22% + 10% surcharge and 4% cess with no exemption/deductions.oCooperative societies exempted from Alternate Minimum Tax (AMT) just like Companies are exempted from the Minimum Alternate Tax (MAT).

Tax concession for foreign investments:

100% tax exemption to the interest, dividend and capital gains income on investment made in infrastructure and priority sectors before 31stMarch, 2024 with a minimum lock-in period of 3 years by the Sovereign Wealth Fund of foreign governments.

Affordable housing:

• Additional deduction up to Rs. 1.5 lakhs for interest paid on loans taken for an affordable house extended till 31st March, 2021.
• Date of approval of affordable housing projects for availing tax holiday on profits earned by developers extended till 31st March, 2021.

Tax Facilitation Measures

• ·Instant PAN to be allotted online through Aadhaar.
• ·‘Vivad Se Vishwas’ scheme,with a deadline of30thJune, 2020, to reduce litigations in direct taxes:

Waiver of interest and penalty-only disputed taxes to be paid for payments till 31stMarch, 2020.

• Additional amount to be paid if availed after 31stMarch, 2020.
• Benefits totaxpayers inwhose cases appeals are pending at any level.
• ·Faceless appeals to be enabled by amending the Income Tax Act.

For charity institutions:

• Pre-filling in return through information of donations furnished by the done.
• Process of registration to be made completely electronic.
• Unique registration number (URN) to be issued to all new and existing charity institutions.
• Provisional registration to be allowed for new charity institutions for three years.
• CBDT to adopt a Taxpayers’ Charter.

Losses of merged banks:

Amendments proposed to the Income-tax Act to ensure that entities benefit from unabsorbed losses and depreciation of the amalgamating entities.