The Finance Act, 2020 has been enacted on 27th March, 2020, which provides provisions for drastic restructuring of the tax regime.
The following alterations to the tax regime shall come into force on 1st day of April, 2020:
- A citizen of India, having total income, other than the income from foreign sources, exceeding fifteen lakh rupees during the previous year shall be deemed to be resident in India in that previous year, if he is not liable to tax in any other country or territory by reason of his domicile or residence. A criteria for checking the residential status of an individual in India is that his period of stay in India should be more than 60 days. However, in case of an Indian Citizen or a person of Indian origin, the Income-tax Act provides relaxation of up to 182 days for residency check. To curb the misuse of the said relaxation, the exception is proposed to be decreased to 120 days from existing 182 days.
- An optional scheme for individuals and Hindu undivided families to pay income tax at lowered rates without claiming any deduction under Chapter VI-A (except Sections 80CCD or 80JJAA) or Section 24 or exemptions.
- Insolvency Professionals can appear before any Income-tax Authority or the Appellate Tribunal on behalf of an assessee as its “authorized representative”.
Besides these, many alterations have been made to the Indirect-Tax regime, which shall come into force from such date as the Central Government may, by notification in the Official Gazette, appoint.
Click here to read the Finance Act, 2020.
