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Relief to economy / foreign and domestic investors, government withdraws increase in tax surcharge; 70 thousand crores will be given to banks


new Delhi. The government made several announcements on Friday in view of the slowdown in the economy and the decline in the stock market. Finance Minister Nirmala Sitharaman said that the decision to increase surcharge on foreign and domestic investors has been withdrawn. This will be applicable from the current financial year. The government had increased the surcharge on super-rich in the budget. Those earning profits from investing in the stock market were also considered under its purview. The Finance Minister said during a one and a half hour press conference on Friday that the government would announce something more next week. 





In the budget, surcharge was increased from 15% to 25% on annual income (super rich) of 2 crore to 5 crore rupees. This was reduced to 37% for those with income above Rs 5 crore. With this, the effective tax rate was increased by 3% to 39% for income from 2 crore to 5 crore and 7% to 42.74% for income above Rs 5 crore. Investors in the stock market were also considered in this range. Due to this, the selling by foreign investors had intensified and there was a steady downward trend in the market.





Why did the government need these declarations?





  • GDP growth rate has come down to 6.8 in the last financial year (2018-19). This is the lowest in 5 years. 
  • The industrial production rate fell to 2% in June. This is the lowest in 3 months. 
  • Sensex down 8% since budget
  • Sales of passenger vehicles declined 19% in July. This is the biggest drop in 19 years.




what next ? 
The Finance Minister had recently held meetings with industry people to discuss the state of the economy. Taking decisions based on this, announcements were made for accelerating growth. The government now hopes that investors will stay in the stock market. With increasing cash in the market, loans will be easier. These steps will benefit the economy. The government will also announce for the housing sector next week.





Chief Minister of Finance declares 





Bank, NBFC, MSME





  • Government banks will ensure that their property documents are returned to the customers within 15 days after completion of the loan.
  • NBFCs will be allowed to use Aadhaar-linked KYC, which will make the loan process easier.
  • Necessary changes will be made in the Prevention of Money Laundering Act rules and Aadhaar-related rules.




auto sector





  • BS-IV vehicles purchased till 31 March 2020 will remain valid for the entire period of registration.





Violation of the rules of Corporate Corporate Social Responsibility (CSR) will not be considered a legal offense. It will be seen only as a social responsibility.





taxation





  • Income tax assessment will be faceless from Vijayadashami. 
  • Tax related notice will be issued from computerized system only.
  • Any communication without a computer generated unique document identification number will not be considered valid.
  • This will prevent incidents of harassing taxpayers.





Separate cell will be created to solve the problems of startup startup . Startup will be able to quickly deal with income tax related issues through this cell.





Signs of recession in many countries, India's situation better: Finance Minister
Finance Minister said that global trade has remained volatile due to trade war and sharp decline in Chinese currency. There are signs of recession in America and Germany too. Global GDP is expected to decrease further. India's position is better than other countries. The process of reforms started in 2014 which is still going on. Continuously moving towards reforms related to labor and taxation.


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