BUDGET - King Stubb & Kasiva | Advocates & Attorneys | KSK...Investment in listed debt securities of...
Transcript of BUDGET - King Stubb & Kasiva | Advocates & Attorneys | KSK...Investment in listed debt securities of...
UNIONBUDGET
KING STUBB & KASIVA
ADVOCATES & ATTORNEYS
20 19 - 20
UNION BUDGET 2019PAGE 1
Corporate Tax
Reduced tax rate of 25% will be extended to companies with
turnover of INR 4bn in FY 2017–18.
Proposal to introduce Faceless Assessment in electronic mode
involving no human interface.
Investment-linked deduction for mega-manufacturing plants in
sunrise and advance technology areas: mentioned in budget
speech; detailed provisions to be announced.
Aggregate amount of unabsorbed depreciation and brought-
forward loss to be allowed as deduction for computing MAT liability
of distressed companies.
Tax incentives for units located in the IFSC.
Incentives to start-ups to carry forward and set-off losses on
continuity of either 51% of voting power or 100% original
shareholders.
Option to taxpayer to pay 18% additional tax plus 12% surcharge on
primary adjustment against perpetual tax on secondary adjustment
of imputed interest.
Buy-back tax also made applicable on buy-back of shares of listed
companies.
Deemed income imputation for money paid/ Indian property
transferred from residents to a NR Indian below prescribed value
Indirect Tax
10% penalty to be prescribed for the amount profiteered asrecommended by the examining authority.
New category of Residual Composition Dealers for servicesand deliverables has been inserted, with an annual turnoverof INR 5m and GST rate of 3%.
Dispute resolution-cum-amnesty scheme called “the SabkaVishwas Legacy Dispute Resolution Scheme, 2019” isproposed for resolution and settlement of legacy cases (pre-GST regime).
Constitution of National Appellate Authority for AdvanceRuling.
Tax reforms to be introduced to encourage the use ofenvironmental-friendly electric vehicles.
Duties proposed to be increased on petrol, diesel andtobacco products.
Capital Markets
Minimum Public Shareholding
The Securities and Exchange Board of India (‘SEBI’) to considerincreasing minimum public shareholding in the listed companiesfrom 25 per cent to 35 per cent
Social Stock Exchanges
Electronic fund-raising platform to be set-up under the ambit ofSEBI for listing of social enterprises and voluntary organisations.
Non-Banking Financial Companies –
- The Reserve Bank of India (‘RBI’) to further strengthen itsregulatory oversight over NBFCs
- NBFCs not required to create a debenture redemptionreserve for raising debt funds
- NBFCs (other than NBFCs-Factor) to directly participate inTrade Receivable Discounting System
Personal Tax
No change in tax slabs or rates for individual taxpayers.
Increase in applicable surcharge now - @ 25%, total income >INR 20m and @ 37%, total income > INR 50m.
Additional interest deduction for first-time home buyers andon electronic vehicles.
UNION BUDGET 2019PAGE 2
Foreign Direct Investment (‘FDI’)
100 per cent FDI permitted in Insurance Intermediaries
Single Brand Retail – relaxation in local sourcing norms proposed
Sectorial caps for FDI in certain sectors to be liberalised (e.g.aviation, media, insurance, etc.)
Foreign Portfolio Investment (‘FPI’)
Aggregate FPI limit in listed companies to be increased tosectoral cap / statutory ceiling
‒ Indian companies to have an option to limit the aggregate FPI
shareholding cap to a lower threshold
Investment in listed debt securities of InvITs / REITs nowpermissible
Investment in debt securities issued by Infrastructure Debt Fundpermitted to be transferred to domestic investors
Existing KYC norms to be rationalised and streamlined
Foreign reinsurers incentivized to set-up branches in IFSC byreduction in net owned fund requirement to INR 10 billion fromINR 50 billion
International Financial Services Centre
Youth/Women/Ease of Living
National Education Policy - proposes major change to schooland higher education.
Khelo India Scheme - For encouraging sports and to providenecessary financial aid.
Platform for promoting start ups and matchmaking with VCs
Women SHG interest subvention programmer to all districts.
Ujjwala Yojana - 8 cr. free LPG connections.
Rural
Pradhan Mantri Awas Yojana - Till 2022 aim of 1.95 crs. houses
Har Ghar Jal - Piped water supply to all rural households by 2024
Pradhan Mantri Gram Sadak Yojana - to upgrade 1.25 lakh kmsin next 5 years.
Infrastructure Development
Bharatmala Phase -II - National road corridors/ State highways
Sagarmala - For improvement of external trade
UDAN - Air connectivity to small cities
PPP in Railway Infra - for faster development
Industrial Growth
FAME Phase -II -Rs. 10k cr outlay for 3 years to encourage ElectricVehicles.
One Nation One Grid - Will develop gas/ power/ water grids, i-ways and regional airports.
2% interest subvention Scheme for MSME - Rs. 350 crs. allocation& online payment platform
Faceless E- assessment
Social Stock Exchange being implemented as Electronic fundraising platform for listing Social entities/ Voluntary Org
Start Ups
No income tax scrutiny of funds raised by start-ups if requisitedeclarations and returns filed properly.
Valuation of shares issued to AIF-II category fund is now coveredunder exemption from income-tax scrutiny as well
Proposal to introduce e-verification for establishing investoridentity and source of funds in minimizing the regulatory burden.
UNION BUDGET 2019PAGE 3
Other Announcements
One-time partial government guarantee of up to 10% to public sector banks for purchase of high-rated pooled
assets of financially sound NBFCs up to INR 1 trillion.
Recapitalisation of Public Sector Banks proposed to the extent of INR 700 billion
Measures to be taken to facilitate seamless transfer of treasury bills and government securities between RBI and
Depository ledgers (including through inter-operability of RBI depositories and SEBI depositories)
Credit Guarantee Enhancement Corporation to be set-up for deepening markets for long-term corporate bonds,
corporate bond repos, etc. to enhance sources of capital for infrastructure financing
Enhanced target of INR 1 trillion set for disinvestment in public sector undertakings (‘PSU’) for the financial year (‘FY’)
2019-2020
To facilitate divestments in non-financial PSUs, present policy of retaining 51 per cent Government stake to be
modified to include stake held through Government controlled institutions
The government lowered the fiscal deficit target for FY20 to 3.3% of the GDP from 3.4%, which was set in the Interim
Budget
Streamlining of multiple labour laws into a set of four labour codes
It is proposed to raise sovereign debt from overseas markets
An outlay of INR 10,000 crore is proposed for a programme to encourage faster adoption of electric vehicles
The FM has proposed to open FDI in aviation, media (animation, AVGC) and insurance sectors. Further, local
sourcing norms to be eased for FDI in the single brand retail sector.
KING STUBB & KASIVA
ADVOCATES & ATTORNEYS
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