Tax Changes Effective from this New Financial year

bgvc

The new financial year has started and going to complete its first month. Various tax changes have become effective. The Government of India is taking different steps to ease Income Tax Returns (ITR) formats. Moreover, the amendment in Goods and Service Tax (GST) returns deadlines is proposed.

The government has given three months extension for tax planning until 30 June 2020. Recently, the Ministry of Finance has clarified that the Financial year 2020-2021 will commence from 1 April 2020.

Below mentioned are the four significant tax changes effective from 1 April 2020.

  1. Optional Income Tax Regimes:

From this financial year, taxpayers have the option to select between two income tax regimes. Depending on investments and income, you have the opportunity to choose between the old and new income tax regime.

  • Dividend income taxable: From 1 April 2020, onwards, dividend income will become taxable as per the applicable income tax rates. Moreover, if dividend income exceeds INR 5,000, then it will attract TDS.
  • Non-Residents Indians (NRI) Tax: A Non-Resident will become ‘Resident but not ordinary resident’ individual if he satisfies following:
  • If his income in India exceeds more than 15 lakhs
  • He resides in India for more than 120 days or 365 days in the previous four years.
  • Tax Collected at Sources (TCS) on education remittances: The same comes under the Reserve Bank of India (RBI) liberalized remittance scheme. The rate of 5 percent applicable to education remittances for more than seven lakhs in a year.

Take note of these tax changes, as these are effective from the first day of this financial year.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.