One of the significant issues that caught everyone’s attention in the recent budget was the amendment to Section 115-O of IT Act[1] which deals with dividend distribution tax (for brevity ‘DDT’), wherein the effect of amendment is that the domestic companies need not pay such DDT for any amount declared, distributed or paid by way of dividends post 31^st March 20. In this article, we would detail the various issues which gets touched upon as a consequence to such amendment.

Read more: All About Dividends & Tax

In this edition, we bring you to quite a few interesting articles.

The article on ‘All About Dividends & Tax’ deals with the budget proposal on changes pertaining to DDT and consequential amendments and impact thereon.

The second part of article on “GST implications on development of plots” deals with liability of developer and landowner qua their sales to respective customers and impact of credit thereof definitely would be an interesting read.

I hope that you will have good time reading this edition and please do share your feedback. I will also urge clients to mail us topics or issues on which you want us to deliberate in our future editions, so that we can contribute to the same.

I am also glad to announce that we have launched our mobile app ‘SBS Connect’ on the eve of completion of 10 years. Now, Wiki and other resources can be accessed through ‘SBS Connect’. Please use ‘SBS Connect’ to stay connected with us.

Read more: SBS Wiki E Journal Jan 2020

Key Topics:

INCOME TAX

• SECTION 194N OF THE INCOME TAX ACT, 1961-TDS ON CASH WITHDRAWAL

INTERNAL AUDIT

• STANDARD ON INTERNAL AUDIT (SIA) 330 INTERNAL AUDIT DOCUMENTATION

By this time, I am sure that all of your mailboxes would have been flooded with colourful presentations detailing the budget proposals. Let me also add burden to your mailbox with our presentation. In this budget edition, we discuss clause by clause each significant proposal pertaining to income tax and goods and services tax laws. Hope this effort of ours is useful for understanding the proposals. Let me also allow to summarise the various proposal before going to deal clause by clause.

The significant of direct tax proposals is the relaxation of tax audits for business who are having less than turnover of INR 5 Crores subject to a condition that there cash transactions are less than 5%. This would be a great relief to the MSME sector, since, it reduces compliance cost.

Another significant of the proposal was to provide relief for companies from payment of DDT for the dividends declared. Currently, the dividends declared by the company are taxable at 15% + surcharges and cesses and exempted in hands of shareholders, except where the dividends exceed INR 10 lakhs. Now that with removal of DDT, the dividends will become taxable in the hands of shareholders and also encourage the companies to declare dividends and may lead to chance in increase in spending.

Read more: SBS Wiki Budget Special Edition 2020