The second mini budget was finally unveiled by Finance Minister on January 23, 2019. The Govt. has proposed has offered various incentives to capital markets and industries including agriculture, small and medium enterprises (SMEs), banks and automobile industry, in particular as part of the proposal. Some of the key incentives that should boost business and investors’ confidence are as follows:
· Removal of tax on undistributed reserves by listed companies
· Reduction in filing requirement of monthly advance tax return by withholding agents to bi-annual
· No super tax on banking sector
· Reduction of tax on inter-company dividends for group companies
· Reduction in tax rates on banks’ interest income from advances given to Micro, SME, Low Cost Housing Finance and Farm Credit.
The government has also proposed some additional incentives to filers and / or additional taxes for non-filers as outlined below:
· 50% increase in rates of Advance Tax on registration of motor vehicles for NON-FILERS:
Tax for Non-Filers
850 cc or below
851 cc – 1000 cc
1001 cc – 1300 cc
1301 cc – 1600 cc
1601 cc – 1800 cc
1801 cc – 2000 cc
2001 cc – 2500 cc
2501 cc – 3000 cc
· No Advance Tax on Cash Withdrawals and Banking Transactions for FILERS.
· Option to carry forward capital losses on sale of securities for up to three years from tax year 2019 onwards.
It is only a matter of time, and one expects that the government will continue to offer more incentives to filers and tighten the noose for non-filers.
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