Finance Act 2019 Current Affairs - 2020
Through Finance Act 2019, amendments were brought to the Indian Stamp Act, 1899. The amendments made comes into effect from 1st July 2020 onwards. These amendments were made for building a pan-India securities market and to boost Ease of Doing Business.
About the Amendments
For building a pan-India securities market, a centralized system of stamp duty with a unified rate has been brought under the amendments. A uniform stamp duty across all the states will be imposed for all financial securities transactions. For stock exchange, duty on the transaction of securities will be deposited to the Central Government. As per the legal and institutional mechanism, the stamp duty is collected by the State Government, under the uniformity, the Central Government will deposit it to the State Government based on the place from where the trade took place.
For other financial securities transactions (non-stock exchange), depositories will collect stamp duties on behalf of the State Government.
For Transfer and reissue of debentures, the rate of duty proposed under the unified system is 0.0001 percent. The rate of duty would vary for financial securities transactions related to the stock exchange or derivate products such as Mutual Funds etc in between 0.0005 percent to 0.015 percent
Tags: Ease of doing business • Finance Act 2019 • Indian Stamp Act 1899
On December 2, 2019, Lok Sabha passed the Taxation Laws (Amendment) bill, 2019. The main objective of the bill is to provide an option for the domestic companies to pay taxes at the rate of 22%.
The bill replaced the ordinance promulgated by the President in September 2019. The ordinance reduced corporate taxes. The bill aims to amend both Income Tax Act, 1961 and Finance Act, 2019.
The bill provides the domestic companies to pay taxes at the rate of 22%. However, this can be availed only if the companies are not claiming deductions under the Income Tax act. Currently, the companies with annual turn over of Rs 400 crores are paying taxes at the rate of 25% and the companies with annual turn over more than Rs 400 crores are paying taxes at the rate of 30%.
Concessions are provided to those companies that were started after September 30, 2019 and begins manufacturing before April 1, 2023. They can pay taxes at the rate of 15% provided they do not claim deductions from other laws and rules
The companies opting for the new tax rates need not pay Minimum Alternate Taxes (MAT).
The main aim of the bill is to promote growth and investment in domestic manufacturing sector. In order to pull up the economy of the country the Union Government also reduced the corporate tax rates up to 10%. It was the biggest reduction in the last 28 years.