New finance act 2020

The Finance Act, 2020 is a legislation passed by the Indian government to amend various tax laws and introduce new provisions to promote economic growth and revenue collection. Here are some key changes and provisions introduced by the Finance Act, 2020:

Income-tax

  1. Tax slab changes: The tax slab for individuals has been changed, with a new tax slab of 15% introduced for income between ₹50 lakh to ₹1 crore.
  2. Surcharge on super-rich: A surcharge of 37% has been introduced on individuals with income above ₹2 crore.
  3. Tax deduction at source (TDS): The TDS rate has been increased from 10% to 12% for non-salaried payments.

Corporate Tax

  1. Corporate tax rate: The corporate tax rate has been reduced from 25% to 22% for companies with turnover up to ₹400 crore.
  2. Surcharge on corporate tax: A surcharge of 10% has been introduced on companies with income above ₹1 crore.
  3. Minimum Alternate Tax (MAT): The MAT rate has been reduced from 18.5% to 15%.

Goods and Services Tax (GST)

  1. GST rate: The GST rate has been reduced from 28% to 18% for certain goods, such as textiles, leather, and footwear.
  2. GST exemption: Certain goods, such as sanitary napkins and insulin, have been exempted from GST.

Other provisions

  1. Faceless assessment: The Finance Act, 2020 has introduced a faceless assessment system for income-tax, where assessments will be conducted without human interface.
  2. E-assessment: The e-assessment system has been made mandatory for all income-tax assessments.
  3. Tax dispute resolution: The Finance Act, 2020 has introduced a new dispute resolution mechanism for tax disputes, known as the "Vivaad se Vishwas" scheme.
  4. Digital payment: The Finance Act, 2020 has introduced a new provision to promote digital payments, by providing a 0.5% discount on digital payments.
  5. Tax on virtual digital assets: The Finance Act, 2020 has introduced a new provision to tax virtual digital assets, such as cryptocurrencies.

Other changes

  1. Capital gains: The Finance Act, 2020 has introduced a new provision to tax long-term capital gains on sale of immovable property.
  2. Wealth-tax: The wealth-tax rate has been increased from 1% to 1.5% for individuals with net wealth above ₹2 crore.
  3. Gift-tax: The gift-tax rate has been increased from 30% to 31.2% for gifts above ₹50,000.

These are some of the key changes and provisions introduced by the Finance Act, 2020. The Act aims to promote economic growth, increase revenue collection, and simplify tax compliance.