Corporate and Professional Updates on 2nd February 2019

Direct Tax Updates:

• People with annual income of around Rs. 10 lakh would be beneficiary by this move. This is because various tax saving instruments can be used to reduce taxable income for a given level of income.
• The finance minister, in his interim budget speech, proposed a complete rebate on tax for those earning up to Rs.5 lakh a year, with an eye on middle-class voters before the general elections this year. The beneficiaries of this move could include people with annual income of around Rs.10 lakh. This is because various tax saving instruments can be used to reduce taxable income for a given level of income.
• The income tax department gives occupation-wise break up of ITR filings with taxable incomes. Out of the total 49.8 million ITRs filed in AY 2017-18, 46.6 million were filed in the salary income category. The total number of salary income category ITRs filed for incomes up to Rs.5 lakh and Rs.10 lakh was 35.3 million and 39.5 million. This means that salary income ITR filers would account for 73% and 88% out of the ITRs filed in these two income categories. The short point is that the salaried class will be the biggest gainer from the income tax.

Indirect Tax Updates:

• After a Huge shortfall of Rs. 1 trillion in the expected central goods and services tax collection in 2018-19. The Central government is aiming to an ambitious 18 per cent growth in the overall GST mop-up in 2019-20. The Government is watching similar growth in income tax, corporation tax and customs revenue in FY20. Overall tax revenue growth is pegged at 14 per cent.
• The government was able to meet its Budget Estimates in the current year. Its Revised Estimates of gross tax collection fell 1 per cent short of the budgeted target, mainly due to the CGST shortfall. The Centre has lesser worries than the states in this bargain. States’ share in the center’s tax revenue, which was budgeted at Rs 7.88 trillion, fell 3.4 per cent to Rs 7.6 trillion in the Revised Estimates. As a result, the Centre’s net tax revenue remained at the near-budgeted level of Rs 14.8 trillion.
• The direct tax collection in FY19 is set to exceed the budget target by Rs 50,000 crore entirely due to enhanced corporation tax revenue. The Revised Estimates of personal income tax is kept at the budgeted level. Revenues from excise particularly levied on petrol and diesel have remained static in the Revised Estimates of FY19 as well as in the budget estimate of FY20, despite the fact that consumption of these fuels tends to rise every year. Despite the under-achievement in the goods and services tax.
• This is appreciable that this government has consistently gone to the GST Council and reduced the GST rates on hundreds of items. We are ensuring 14 per cent growth to states’ revenues from the GST kitty to the states. It is almost 50 per cent growth over three years, which has never happened before in indirect tax collection,” he said in a post-Budget media interaction.
• The expectation of Rs 6.04 trillion from the CGST, the Centre could garner only Rs 5.04 trillion. Now, the CGST is a component of the divisible pool of tax revenue, 42 per cent of which is shared with states. Thus, the burden of the CGST shortfall will be borne by both the Centre and states. This was partially compensated by corporation taxes, which have been revised upwards by Rs 50,000 crore, and by revenue from basic customs duties, which have been revised upwards by Rs 19,000 crore.

Other Updates:

• The Ministry of Housing & Urban Affairs, Government of India has approved the construction of 478,670 more houses under the Pradhan Mantri Awas Yojana (PMAY) (Urban), taking the cumulative number of houses sanctioned under the scheme to 7.27 million.
• Assam is the top ranking state in India for best practices followed in budget formulation, followed by Andhra Pradesh and Odisha, according to a survey by Transparency International.
• India sales of Hennes & Mauritz , a Swedish fashion retailer, increased 41 per cent year-on-year to around Rs 306 crore between September-November 2018.
• The Government of India has increased the fellowship for doctorate students and research personnel in all areas of science and technology, effective from January 01, 2019.
• India to account for 40 per cent of global rail travel by 2050.
• Indian Railways will account for 40 per cent of global rail activity by 2050, as per the International Energy Agency.
• India’s retail sector can provide employment opportunities to disabled people and mainstreaming of differently abled people can boost the country’s GDP by 5-7 per cent, as per a report by Trust for Retailers and Retail Associates of India and HSBC.
• The Indian Space Research Organisation (ISRO) will deploy its Lithium-ion cell technology to 10 Indian companies, to establish production facilities of lithium ion cells in India.
• India’s ranking on Corruption Perceptions Index (CPI) has gone up by three positions to 78 in 2018.
• The Government of India has reduced the customs duty on import of parts and components of electric vehicles to 10 percent to promote domestic assembling of such vehicles.
• The Government of Kerala is aiming to double the inflow of foreign tourists to more than two million by the end of 2020, according to Mr B S Biju, Tourist Information Officer, and Kerala Tourism.
• India’s reinsurance market is expected to witness increased competition driven by relaxation of norms for foreign reinsurers by the Insurance Regulatory and Development Authority of India.
• Lower logistics cost to help boost Exports by 5-8%.
• Escorts chalks out 400-cr CapEx for expansion.
• GDP Growth rate for 2017-18 revised upwards to 7.2%.
• China appeals to US to accept its technology progress.
• HERO MotoCorp quarterly Profit slips on higher expenses.

Key Due Dates:

• Due Date for Payment of TDS & TCS Deducted/Collected in the month of January is 7^th February 2019.
• Due Date for TDS Return for the month of January is 10^th January 2019.

Professional quotes:

“You have to perform at a consistently higher level than others. That’s the mark of a true professional. Professionalism has nothing to do with getting paid for your services.”