Taxation Laws (Amendment) Bill – Free PDF Download

• The Lok Sabha passed the Taxation Laws (Amendment)  Bill, 2019, on 2^nd December 2019.

This will amend:-

• The Income Tax Act 1961 and  The Finance (No 2) Act 2019.

FINANCE BILL

• The proposals of the government for- levy of new taxes,  modification of the existing tax structure or continuance of the existing tax structure beyond the period approved by Parliament are submitted to Parliament  through this bill.
• The Taxation Laws (Amendment)  Ordinance, 2019 was promulgated  on September 20.

• Currently, domestic companies with annual turnover of up to Rs 400 crore  pay income tax at the rate of 25%.
• For other domestic companies, the tax rate is 30%.
• Surcharge at 7%
• Surcharge at 12%

WHAT ARE THE CHANGES?

• The Bill provides domestic companies with an option to pay  tax at the rate of 22%, provided they do not claim certain  deductions under the Income Tax Act.
• Deductions provided are like:-  newly established units in SEZs,
• Investment in new plant or machinery in notified backward  areas etc.
• The Bill provides new domestic manufacturing companies  with an option to pay income tax at the rate of 15%, provided  they do not claim certain deductions.
• These new domestic manufacturing companies must be set up  and registered after September 30, 2019, and start  manufacturing before April 1, 2023.

NEW SURCHARGE?

• Companies opting for the new rates  have to pay a 10% surcharge.

• A company can choose to opt for the new tax rates in the  financial year 2019-20 (i.e. assessment year 2020-21) or in  any other financial year in the future.
• MAT will not apply to companies opting for the new tax rates.
• The bill also amend the MAT rate from 18.5% to 15%.

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