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June 29 To July 5, 2019 u Taxmann’s Corporate Professionals Today u Vol. 45 u 6more than the threshold limit. In similar
situations, when income exceeds marginally
from the level of ` 50 lakhs or ` 1 crore,
the Income-tax Act allows marginal relief to
nullify the impact. Thus, it is recommended
that Govt. should consider introducing the
marginal relief for the individual taxpayers
who are earning slightly more than `5 lakhs.
Further, the basic exemption limit should
be increased at least to ` 3 lakhs for an
individual taxpayer and ` 3.5 lakhs for
resident senior citizens and ` 6 lakhs for
super senior citizens.- Increase in threshold limit of section
80C to boost investments
Section 80C allows deduction not only in
respect of investments but also in respect
of expenses which we generally incur in our
day to day lives such as tuition fees, housing
loan principal repayment, etc.
The existing limit for deduction, i.e.,150, leaves very little scope for the taxpayers to make further investments. Thus, various investment schemes have been losing their sheen. With an increase in inflation rate, there is need of an increase in limit of section 80C too. It is recommended that the deduction under Section 80C should be increased to minimum of2,00,000. - Higher deduction for housing loan
Considering the socio-economic needs of
middle-class families to maintain houses at two
locations on account of their jobs, children’s
education, care of parents, etc., the interim
Budget has granted major relief to individual
taxpayers by allowing them to declare two
house properties as self-occupied properties
for the purpose of calculating income from
house property.
However, the deduction with respect to
interest on borrowed capital with respect to
both the houses remains unchanged, i.e., at
`200,000. It is recommended that the Govt.
should promote housing sector by giving
higher deduction for interest on housing
loan. Govt. should consider increasing the
limit to `2,50,000 for one self-occupied house
property and `3,00,000 for two self-occupied
house properties.- Revision of time limit for issue of
scrutiny notice
As per current provisions, the limitation period
for issue of notice under Section 143(2) for
scrutiny assessment is 6 months (from the
end of the financial year in which return is
furnished) and for issue of intimation it is 1
year (from the end of the financial year in
which return is furnished). This asymmetry
between the two time limits should be
addressed suitably in the forthcoming budget.
If tax details reported by an assessee in
Income-tax return do not reconcile with
the details of Form 26AS, the case shall be
selected for limited scrutiny. If return is
processed by CPC, Bengaluru after 6 months
from the end of the financial year in which
return is furnished and the case is selected
for limited scrutiny, the Assessing Officer
would not be able to issue the notice for
scrutiny assessment as it has become time
barred. Thus, it is expected that the time
limits for issue of Section 143 notice may be
revised to bring it in sync with the limitation
period for issue of notice. - Taxability of capital gains in case of
JDA entered into by assessees other than
an Individual or an HUF
The Finance Act, 2017 had inserted sub-
section (5A) in Section 45 to provide that
capital gains arising in case of JDAs shall
be chargeable to tax in the year in which
certificate of completion of project is issued
by the competent authority. This provision
is applicable only in cases where owner of
EXPECTATIONS FROM AND RECOMMENDATIONS FOR UNION BUDGET 2019