419
June 29 To July 5, 2019 u Taxmann’s Corporate Professionals Today u Vol. 45 u 7immovable property is an Individual or an
HUF. The law doesn’t provide any clarity on
taxability if JDAs have been entered into by
any other assessee. Thus, it is recommended
that the forthcoming Budget should bring
clarity with respect to taxability of capital
gains in case JDAs are entered into by any
assessees other than an Individual or an HUF.
- Outdated limits for salaried employees
need revision
There are several allowances which are exempt
from tax up to certain threshold limits. These
threshold limits are too meagre in today’s
scenario as they have not been revised with
the passage of time, inter alia, Children-
Education Allowance is exempt up to 100 per month, hostel expenditure is exempt up to300 per month, etc. It is the urgent need
of the hour that Govt. should increase the
threshold limits of various allowances.
- HRA -Add more cities under
metropolitan’s umbrella
An employee can claim exemptions for HRA if
he pays rent for his residential accommodation.
As of now, higher deductions are allowed
if employee is living in any of the four
big metropolitan cities, i.e., Mumbai, Delhi,
Kolkata and Chennai. Currently, the rental
charges for a house in cities like Bengaluru or
Hyderabad are equal to or higher than what
a tenant in Delhi or Kolkata has to pay for
an equivalent house. Many Indian cities have
developed employment opportunities in last
two decades and, accordingly, rental charges
have also increased manifold. Therefore,
there is an urgent need of inclusion of many
other cities in this category like Bengaluru,
Hyderabad, Pune, Ahmedabad, Jaipur, Noida,
Gurgaon, etc.
- Limit of deduction for discounts given
by the e-Commerce operator
The growth of e-commerce industry in India
could be attributed to increase in usage of
internet, smartphone penetration and heavy
discounts offered by e-commerce websites.
Flipkart’s Big billion sales, Amazon’s Great
Indian Festival, etc., are a few online seasonal
sales where these companies offer huge discounts
and cashbacks on various products. In a recent
case, the Assessing Officer disallowed the
discount offered by the Flipkart.com to its
customers on the grounds that the strategy
of selling goods at lower than cost price was
to establish customers goodwill and brand
value in the long run and reap benefits in
the later years.
In an appeal to the ITAT, the Bangalore ITAT
had allowed deduction of such discounts offered
by Flipkart to buyers. Though Income-tax dept.
lost the case yet it set a valid argument. There
should be a limit for allowing deduction of
discounts offered by e-Commerce industries.
Almost every e-commerce establishment is
running into huge losses and reason is only
one, i.e., immense discounts. The two big
tech e-commerce giants in India, i.e., Flipkart
and Amazon are facing losses in thousands
of crores which ultimately results in loss of
revenue for the Income-tax dept.
We expect that the Govt. might bring in some
new provisions under the Income-tax Act,
which may indirectly put some restrictions on
amount of discounts offered by e-commerce
platforms. - Special TDS/TCS provisions in case of
e-Commerce industries
In GST e-commerce companies are required to
collect 1 per cent TCS while making payment
to suppliers. On the line of GST, the Govt.
may introduce special TDS provisions under
Income-tax Act for the e-commerce industries
EXPECTATIONS FROM AND RECOMMENDATIONS FOR UNION BUDGET 2019