By Sandeep Shah
Finance Minister Nirmala Sitharaman has treated both water and tax as scarce resources and consequently focused on plugging loopholes in tax compliance through various measures apart from increasing the tax rate on super rich.
One of the measure is introduction of tax to be deducted at source at 5 per cent from payments made to contractors and professionals in excess of Rs 50 lakh even though such payments are not related to business expenses.
Similarly the filing of return of Income even though the income is below the threshold level is made mandatory if the yearly payment towards house electricity is above Rs 1 lakh or foreign travel expenses for self or others is above Rs 2 lakh or deposit in one or more current account is above Rs 100 lakh.
Gift to Nonresidents will also be treated as taxable unless the gift is to relative.
(The writer is a partner in N.A. Shah Associates LLP. The views expressed are personal)
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