Budget 2019: Full text of the memorandum of the Finance Bill tabled in LS

Here is the full text of the memorandum of the finance bill tabled in Lok Sabha

FINANCE (No.2) BILL, 2019

PROVISIONS RELATING TO DIRECT TAXES & RELATED LAWS

Introduction

(c ) in the case of a domestic company,—

(i) having total income exceeding one crore rupees but not exceeding ten crore rupees, the amount of income-tax computed shall be increased by a surcharge for the purposes of the Union calculated at the rate of seven per cent. of such income tax;

(ii) having total income exceeding ten crore rupees, the amount of income-tax computed shall be increased by a surcharge for the purposes of the Union calculated at the rate of twelve per cent. of such income-tax; and (iii) surcharge will also be levied at the appropriate rates in cases where the company is liable to tax under section 115JB of the Act.

(d) in the case of a company, other than a domestic company,—

(i) having total income exceeding one crore rupees but not exceeding ten crore rupees, the amount of income-tax computed shall be increased by a surcharge for the purposes of the Union calculated at the rate of two per cent. of such income tax;

(ii) having total income exceeding ten crore rupees, the amount of income-tax computed shall be increased by a surcharge for the purposes of the Union calculated at the rate of five per cent. of such income tax; and (iii) surcharge will also be levied at the appropriate rates in cases where the company is liable to tax under section 115JB of the Act.
 

(e) In other cases (including cases where provisions of sections 115-O, 115QA, 115R, 115TA or 115TD are applicable), the surcharge shall be levied at the rate of twelve per cent. Surcharge shall also be levied at the rate of twelve per cent. on additional Income-tax chargeable under newly inserted sub-section (2A) in existing section 92CE.

(2) Marginal Relief—

Marginal relief has also been provided in all cases where surcharge is proposed to be levied.

(3) Health and Education Cess—

For assessment year 2019-20, “Education Cess on income-tax” and “Secondary and Higher Education Cess on income-tax”

has been discontinued. However, a new cess, by the name of “Health and Education Cess” has been levied at the rate of four per cent. on the amount of income tax so computed, inclusive of surcharge, wherever applicable, in all cases. No marginal relief is available in respect of such cess.

II. Rates for deduction of income-tax at source during the financial year 2019-20 from certain incomes other than “Salaries”.

The rates for deduction of income-tax at source during the financial year 2019-20 on certain incomes other than “Salaries”

have been specified in Part II of the First Schedule to the Bill. The rates for all the categories of persons will remain the same as those specified in Part II of the First Schedule to the Finance Act, 2018, for the purposes of deduction of income-tax at source during the financial year 2018-19. For sections specifying the rate of deduction of tax at source, the tax shall continue to be deducted as per the provisions of these sections. Two new sections 194M and 194N, specifying the rate of deduction in cases covered therein, are proposed to be inserted and the rate of deduction is proposed to be modified for existing section 194DA.

(1) Surcharge—

The amount of tax so deducted, in the case of a non-resident person, shall be increased by a surcharge,—

(a) in case of an individual, Hindu undivided family, association of person, body of individual or artificial juridical person;

(i) at the rate of ten per cent. of such tax, where the income or the aggregate of such incomes paid or likely to be paid and subject to the deduction exceeds fifty lakh rupees but does not exceed one crore rupees;

(ii) at the rate of fifteen per cent. of such tax, where the income or theaggregate of such incomes paid or likely to be paid and subject to the deduction exceeds one crore rupees but does not exceeds two crore rupees;

(iii) at the rate of twenty five per cent. of such tax, where the income or the aggregate of such incomes paid or likely to be paid and subject to the deduction exceeds two crore rupees but does not exceeds five crore rupees; and 

(iv) the rate of thrity seven per cent. of such tax, where the income or the aggregate of such incomes paid or likely to be paid and subject to the deduction exceeds five crore rupees.

(b) in case of a firm or cooperative society, at the rate of twelve per cent. of such tax, where the income or the aggregate of such incomes paid or likely to be paid and subject to the deduction exceeds one crore rupees.

FULL TEXT OF MEMORANDUM