As of 1st October 2020, major tax changes will come into effect. These changes are going to affect the taxpayers in India.
Government is going to introduce technology in tax administration in India. These changes will help them to gather data about transactions.
It will also help them to learn the spending patterns and show them how much money flow outside the country. Here are the changes.
It is for funds that you send abroad. Now, you have to pay 5% TCS when you make a funds transfer to a foreign country. It will be inclusive of foreign tour packages. The amount cap is Rs. 7 lakh. The tax will be applicable only if you transfer more than Rs.7 lakh. If you are paying from an income post TDS, there is no need to pay additional TCS. The bankers will take the TCS and give it to the government. You will get the TCS as credit. When you file for tax returns, you will get it. It will help the government to check if the funds an individual transfer to foreign country matches their income recorded in the tax returns. It is also applicable for the international credit card. If you use foreign currency, it will be applicable.
It is only applicable to business. Those who have sales more than Rs.500 crore have to submit the e-invoice to the government. They have to submit all the sales invoice. You can do it via the GSTN portal. It will help in the easy procession of the text returns. As everything is digital, there will be no chances of fraud. This will reduce a lot of data entry work and human errors. It will also help the companies to gain the trust of the tax officials. There will be lesser audits and surveys. It is only for B2B transactions.
Import Duty on TV Parts:
Television sets are made from cell panels. It is one of the most important components of a TV. If you import open cell panels, you will have to pay a 5% import duty. The government will not extend the date. There is no more relief. It was given for only a year. There will be no extension and exemption on the government’s part.
TCS on Sale of Goods:
Sellers have to pay TCS on sale of goods if the amount is more than Rs. 50 lakh. There are other conditions, as well. They need to have Rs. 10 crore revenue. It should be of the previous year. If they show this, they can get income tax at source. The rate of the interest is 0.1% of the sales. The sale should be more than Rs.50 lakh.
TSD on E-Commerce:
E-Commerce platforms operating in India have to deduct TDS. The rate is 1%. As we know, there are many sellers on Amazon. The platform has to pay sales to proceed to the sellers. The interest will be ducted from that amount. This change will make the participants in E-Commerce in the tax bracket.