Recalling the Union Budget of 2019, various amendments and additions to the Income Tax Act have been proposed, some of major reforms which comes in effect from Sept 1 are as under;
1. PAN not linked to Aadhaar card will become invalid
As per CBDT) notification dated March 31, 2019, the deadline to link PAN with Aadhaar has been extended to September 30, 2019. Also, from April 1, 2019 it is mandatory to quote and link Aadhaar number while filing income tax return (ITR) unless specifically exempted.
2. Levy of 2% TDS on cash withdrawal of more than Rs 1 crore
A new section 194N has been inserted in the Income Tax Act which defines that TDS will be levied at the rate of two 2 % on cash withdrawals made from bank account.
3. Section 194DA TDS in respect of life insurance policy
Amount received by the life insurance policyholder from an insurer is subject to TDS of 5% on taxable proceeds. Prior to this TDS was deducted at the rate of 1%.
4. Individuals must deduct TDS on payments to contractors & professionals
Newly inserted section 194M in the Income-tax Act, 1961 makes it mandatory for an individual or HUF to deduct TDS of 5% when paying any sum to a contractor or a professional or commission or brokerage i.e. exceeding Rs 50 lakh in a FY.
5. TDS on additional payments made when purchasing immovable property
The buyer of immovable property will have to deduct TDS of 1% on the total sale consideration. Sales consideration includes payment made for other services or amenities such as club membership fee, car parking fee, electricity and water facility fee and so on. While previously, TDS was deducted by the buyer on the amount paid for the purchase of property excluding any additional payment.
Source: ET Wealth | 7 changes in income tax laws that come into effect from Sept 1 | August 30, 2019
