Budget 2020: Taxpayers will now have to evaluate what works better, says Archit Gupta, Founder, and CEO, ClearTax

Budget

BudgetThe complex tax regime for taxpayers with the slabs rejig. With the optional new regime, taxpayers will have to evaluate what works better. Those committed to long term saving and investing via 80C may be discouraged and this may likely demotivate taxpayers from tax-saving linked investing, writes Archit Gupta, Founder, and CEO, ClearTax, while commenting on the Union Budget announcements.

DDT removal is good as it increases dividends received in the hands of the taxpayer – however, such receipts to now are taxable in their hands. Those above 20 percent tax slab – will now face more tax on their dividend income, says Gupta.

“We welcome deferment of perquisite taxation – now taxation at the time of ‘exercise’ deferred to 5 years or till they leave the company or till they sell their shares – whichever is earlier. This will be a key plank for hiring quality resources,” adds Gupta.

“Raising the turnover threshold for audit for businesses to Rs 5 Crore is a welcome relief. Hopefully, tax filing for such businesses will also be simplified. However, such businesses will have to be careful with keeping cash transactions under 5 percent and will need a technology-based mechanism to track that,” he says.

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