Press Information Bureau
Government of India
Ministry of Finance

Dated: 20 NOV 2019

Cabinet approves Taxation Laws (Amendment) Bill, 2019

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved the proposal for introducing the Taxation Laws (Amendment) Bill, 2019 in order to replace the Ordinance.

Economic developments after the enactment of the Finance (No. 2) Act, 2019 (Finance Act) along with reduction of rate of corporate income tax by many countries world over necessitated the provision of additional fiscal stimulus to attract investment, generate employment and boost the economy. As these could have been achieved through amendment to the Income-tax Act, 1961 (IT Act) or to the Finance Act and the Parliament was not in session, it was done through promulgation of The Taxation Laws (Amendment) Ordinance 2019 (the Ordinance) in September, 2019. Salient features of the amendments made by the Ordinance are provided in the following paras.

In order to promote growth and investment, a new provision was inserted in the IT Act to provide that with effect from the current financial year 2019-20, an existing domestic company may opt to pay tax at 22% plus surcharge at 10% and cess at 4%, if it does not claim any incentive/deduction. The effective tax rate for these companies comes to 25.17% for these companies. They would also not be subjected to Minimum Alternate Tax (MAT).

In order to attract fresh investment in manufacturing and provide boost to 'Make-in India' initiative of the Government, another provision was inserted to the IT Act, to provide that a domestic manufacturing company set up on or after 1st October, 2019 and which commences manufacturing by 31st March, 2023, may opt to pay tax at 15% plus surcharge at 10% and cess at 4% if it does not claim any incentive/deduction. The effective rate of tax comes to 17.16% for these companies. They would also not be subjected to MAT.

A company which does not opt for the concessional tax regime and avails the tax exemption/incentive shall continue to pay tax at the pre-amended rate. However, these companies can opt for the concessional tax regime after expiry of their tax holiday/exemption period. After the exercise of the option they shall be liable to pay tax at the rate of 22%. Further, in order to provide relief to companies which continue to avail exemptions/incentive, the rate of MAT was reduced from existing 18.5% to 15%.

In order to provide relief to listed companies, the buy-back tax on shares of listed companies introduced through the Finance Act will not apply to buy-backs in respect of which public announcement were made before 5th July, 2019.

In order to stabilise the flow of funds into the capital market, it was provided that the enhanced surcharge introduced through the Finance Act on capital gains arising on account of transfer of listed equity share or certain units which are liable to securities transaction tax will not apply. Further, it was also provided that the enhanced surcharge will not apply to capital gains income of FPIs arising out of transfer of any security including derivatives, having concessional tax regime.

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VRRK/SC/SH

 

Cabinet

Cabinet approves Taxation Laws (Amendment) Bill, 2019

Dated: 20 NOV 2019

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved the proposal for introducing the Taxation Laws (Amendment) Bill, 2019 in order to replace the Ordinance.

Economic developments after the enactment of the Finance (No. 2) Act, 2019 (Finance Act) along with reduction of rate of corporate income tax by many countries world over necessitated the provision of additional fiscal stimulus to attract investment, generate employment and boost the economy. As these could have been achieved through amendment to the Income-tax Act, 1961 (IT Act) or to the Finance Act and the Parliament was not in session, it was done through promulgation of The Taxation Laws (Amendment) Ordinance 2019 (the Ordinance) in September, 2019. Salient features of the amendments made by the Ordinance are provided in the following paras.

In order to promote growth and investment, a new provision was inserted in the IT Act to provide that with effect from the current financial year 2019-20, an existing domestic company may opt to pay tax at 22% plus surcharge at 10% and cess at 4%, if it does not claim any incentive/deduction. The effective tax rate for these companies comes to 25.17% for these companies. They would also not be subjected to Minimum Alternate Tax (MAT).

In order to attract fresh investment in manufacturing and provide boost to 'Make-in India' initiative of the Government, another provision was inserted to the IT Act, to provide that a domestic manufacturing company set up on or after 1st October, 2019 and which commences manufacturing by 31st March, 2023, may opt to pay tax at 15% plus surcharge at 10% and cess at 4% if it does not claim any incentive/deduction. The effective rate of tax comes to 17.16% for these companies. They would also not be subjected to MAT.

A company which does not opt for the concessional tax regime and avails the tax exemption/incentive shall continue to pay tax at the pre-amended rate. However, these companies can opt for the concessional tax regime after expiry of their tax holiday/exemption period. After the exercise of the option they shall be liable to pay tax at the rate of 22%. Further, in order to provide relief to companies which continue to avail exemptions/incentive, the rate of MAT was reduced from existing 18.5% to 15%.

In order to provide relief to listed companies, the buy-back tax on shares of listed companies introduced through the Finance Act will not apply to buy-backs in respect of which public announcement were made before 5th July, 2019.

In order to stabilise the flow of funds into the capital market, it was provided that the enhanced surcharge introduced through the Finance Act on capital gains arising on account of transfer of listed equity share or certain units which are liable to securities transaction tax will not apply. Further, it was also provided that the enhanced surcharge will not apply to capital gains income of FPIs arising out of transfer of any security including derivatives, having concessional tax regime.

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VRRK/SC/SH

(Release ID: 1592558)

 

Ministry of Finance

Norms of Aadhaar KYC are eased, not of the Change of Address in Aadhaar

Dated: 14 NOV 2019

Norms of Aadhaar KYC are eased for opening of bank account and not for the change of address in Aadhaar, said the Department of Revenue (DoR), Ministry of Finance today while clarifying on Aadhaar KYC use with reference to its notification dated 13.11.2019 on amendment to the Prevention of Money-laundering (Maintenance of Records) Rules, 2005. The DoR said in a categorical statement that its notification is with regard to easing of Aadhaar KYC use for opening of the bank account for the convenience of people who often migrate from place to place for jobs or any other reason and it is not regarding the change of address in Aadhaar card, as has been misreported in various media.

Revenue Secretary, Dr. Ajay Bhushan Pandey said, “The amended PMLR applies only to Aadhaar KYC purposes for opening of bank account and not for the change of Address in Aadhaar card. If a person has moved residence for purposes of work and needs to use Aadhaar KYC for opening a new bank account or change his bank branch, etc., he can give a self declaration of new address while retaining the original address on his Aadhaar card”.

Dr Pandey said that the PML Rules amendment makes opening bank account easier for individuals who are living in an address different from their address in Aadhaar. People who submitted Aadhaar card with a different address as KYC at banks can now submit local address by providing a self-declaration.

He said that with this amendment, giving a self-declaration about a local address or any address other than the one on Aadhaar card will be sufficient as address proof to open bank account with Aadhaar KYC. This amendment brings in convenience especially for the migrant people. For example, if a migrant worker comes from Jharkhand to Mumbai and his/her Aadhaar has Jharkhand’s address, then to open a bank account a self-declaration about his/her local address in Mumbai will be sufficient for Aadhaar KYC.”

DoR sources said that the change has been made through an amendment in the PML Rules and not by way of amending Aadhaar Act/Regulations. So, it does not apply to change of address in Aadhaar card. This amendment has been issued to allow people who have used Aadhaar KYC to open bank account and want to give an address different from the address in Aadhaar as current address on self declaration basis.

(Release ID: 1591590)

 

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

New Delhi, 14 th November, 2019

PRESS RELEASE

Income Tax Department conducts search on prominent business groups in Mumbai

The Income Tax Department conducted search action in Mumbai and Surat on 06.11.2019 on entry providers and beneficiaries who have been engaged in execution of civil contracts mainly in Brihanmumbai Municipal Corporation (BMC). A total of 37 premises were covered under search action and 7 premises were covered under survey. There were reports that certain contractors had taken entries in the form of loans, etc. from entry providers and also inflated expenses in the books of accounts to suppress income.

Incriminating evidences showing large scale tax evasion and money laundering have been found. It has also led to the detection of the use of bogus companies (floated by entry providers) for giving entries to businesses in the form of loans or bills for expenses, etc. In the case of the entry providers, systematic modus operandi of bank fraud and forgery has been detected whereby the promoters have made investments in immovable properties and shares of group companies by siphoning off the bank loans. In the case of the contractor groups, several instances about inflation of expenses by bogus purchases/sub-contracts and taking of loans from entry providers have been identified.

So far, detection on account of above mentioned issues is to the tune of Rs.735 crore and extent of accommodation entries is being quantified.

Investigations are in progress, including identification of the remaining beneficiaries.

(Surabhi Ahluwalia)

Commissioner of Income Tax

(Media & Technical Policy)

Official Spokesperson, CBDT.

 

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

New Delhi, 13 th November, 2019

PRESS RELEASE

Meeting between Secretaries of Switzerland and India to further assistance in tax matters

Fighting the menace of Black Money stashed in offshore accounts is a key priority area for the Government. Following the agreement between the Indian Prime Minister and the Swiss President for enhanced cooperation in the fight against tax evasion the two sides have worked closely for expeditious information exchange in tax matters. To further this cooperation, Revenue Secretary, Dr. Ajay Bhushan Pandey and Switzerland’s State Secretary for International Finance, Ms. Daniela Stoffel met today at New Delhi. The Secretaries expressed satisfaction over the progress made over the past few years in the area of administrative assistance in tax matters, particularly the efforts made by Switzerland in providing assistance in HSBC cases.

Welcoming the first transmission of financial account information on automatic basis between the two countries in September 2019, the Secretaries reiterated their countries’ commitment to global tax transparency for tackling offshore tax evasion. This automatic exchange of financial account information will usher in a new era of financial transparency as Indian tax administration will now know the details of all bank accounts held by Indians in Switzerland. The Secretaries encouraged the competent authorities of both the countries to further collaborate and share experiences with the aim of continuously enhancing the quality of the exchanged data.

The Revenue Secretary and Swiss State Secretary also exchanged views on addressing the challenges arising out of digitalization of the economy and agreed that coordinated international actions, as in the case of tax base erosion and profit shifting project, are central to achieving a consensus-based long-term solution that leads to desired tax certainty and sustainable development. 

The Secretaries reaffirmed the need for continuous dialogue at the level of competent authorities of the two countries to further enhance the cooperation under the India-Switzerland tax treaties and agreed to carry forward the dialogue in the spirit of mutual friendship and cooperation.

A Joint Statement was signed by the two Secretaries at the conclusion of the meeting. 

(Surabhi Ahluwalia)

Commissioner of Income Tax

(Media & Technical Policy)

Official Spokesperson, CBDT.