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June 29 To July 5, 2019 u Taxmann’s Corporate Professionals Today u Vol. 45 u 8in order to put a check and to keep an eye
on all the vendors who are selling goods or
services through online platforms.- Clarification on Availability of
Extended period for MAT credit
The Finance Act, 2018 has extended the
period for which MAT credit can be carried
forward from 10 years to 15 years. However,
it has not been clarified whether the extended
period would be applicable even in those
cases where original period of 10 years has
already expired before the date on which
such provision came into force. Thus, it is
recommended that the forthcoming Budget
2019 should bring clarity on this issue. - Insert reference for deposit/recovery
of TCS on motor Vehicle
Section 206C of the Income-tax Act, 1961
provides for collection of tax at source by
seller in case of sale of some specified goods
or providing of specific services. The section
also provides for the manner of deposit, mode
of recovery of tax, etc. The Finance Act, 2016
had amended section 206C to cover more
transactions. Sub-section (1F) was inserted
w.e.f., June 1, 2016 for collection of tax at
source by the sellers of motor vehicles where
the value of transaction exceeds `10 lakh.
Though the new sub-section was inserted yet
the CBDT inadvertently missed the consequential
amendments to the remaining sub-sections
which provide for mode of recovery, deposit
of TCS, etc. Thus, it is recommended that
government should fill up this gap in the
Union Budget, 2019. - Increase in the threshold limit for
payment of advance tax
The liability to pay advance tax arises only
when the estimated tax liability of a taxpayer
for the financial year is ` 10,000 or more.
The threshold limit of `10,000 was revised
10 year ago vide the Finance (No. 2) Act,
2009 wherein it was increased from `5,000 to
`10,000. The Govt. should consider revising
the threshold limit of estimated tax liability
from `10,000 to minimum ` 25,000.- Uniformity in reduction of tax rates
For the Assessment Year 2020-21, the tax rate
is 25% for small and medium sized companies
having turnover of less than ` 250 crores
during previous year 2017-18. The tax rate
has not been reduced for another business
entities, i.e., partnership firm, LLPs, etc.
It is recommended that Govt. should extend
the benefit of reduced tax rate to other
business entities. Further, to claim reduced
rate of tax, the threshold limit of turnover
in the financial year should be changed to
immediately preceding previous year for
which audited financials are available. - LTA for foreign travel
An employee is entitled to claim exemption
for the leave travel allowance granted to him
by his employer for the purpose of going
on a vacation anywhere within India. This
exemption is still allowed only for vacations
within India. This provision may help to
promote Indian Tourism but it is not in pari-
materia with current scenario as travelling to
some overseas destinations is cheaper than
visiting tourist destinations in India. Therefore,
it is recommended that the exemption should
be allowed for both Indian destinations as
well as for foreign destinations. - Validity of Income Computation and
Disclosure Standards (ICDS)
The Finance Act, 2018, had brought various
amendments to the Income-tax Act in order
to enable the applicability of ICDS. For
instance, Section 43AA was inserted in
EXPECTATIONS FROM AND RECOMMENDATIONS FOR UNION BUDGET 2019