Income Tax & GST Changes on Real Estate Industry by Budget 2022

Income Tax

1. Concept of Updated Return introduced in Section 139(8A) along with Payment of additional taxes of 25%/50% in non search, information etc routine cases u/s 132, 132A, 133A, PMLA etc
2. 158AB – Appeal delayed by Revenue on matters sub judice in HC/SC till final order is received.
3. Cess and Surcharges are non deductible expenses overruling Sesa Goa Ruling – This amendment will take effect retrospectively from 1st April, 2005 and will accordingly apply in relation to the assessment year 2005-06 and subsequent assessment years
4. 14A explanation added to mention that disallowance is permissible even if exempt income has not accrued.
5. More Clarity in Disallowance u/s 37 – by adding in explanation – Non Alowance of any expenditure which is an offence under, or which is prohibited by, any law for the time being in force, in India or outside India or provide any benefit or perquisite, in whatever form, to a person, whether or not carrying on a business or exercising a profession, and acceptance of such benefit or perquisite by such person is in violation of any law or rule or regulation or guidelines, as the case may be, for the time being in force, governing the conduct of such person or to compound an offence under any law for the time being in force, in India or outside India
6. Explanation in Section 43B to clarify that Under the provisions of this section conversion of the outstanding interest liability into debentures is not an actual payment and cannot be claimed as deduction
7. TDS / TCS Interest to be paid in accordance order issued by AO
8. Additional TDS Tax Category of non filers u/s 206AB and 206CCA – Individual / HUF exempted if income u/s 194-IA, 194-IB and 194M
9. in the provisions of section 194-IA and sections 43CA and 50C of the Act done away)

9. In order to remove inconsistency, it is proposed to amend section 194-IA of the Act to provide that in case of transfer of an immovable property (other than agricultural land), TDS is to be deducted at the rate of one per cent. of such sum paid or credited to the resident or the stamp duty value of such property, whichever is higher. In case the consideration paid for the transfer of immovable property and the stamp duty value of such property are both less than fifty lakh rupees, then no tax is to be deducted under section 194-IA
10. Earlier it was based on consideration.

1. TDS on benefit or perquisite of a business or profession @ 10% introduced u/s 194R

11. Provisions pertaining to bonus stripping and dividend stripping to be made applicable to units of Infrastructure Investment Trust (lnvlT) or Real Estate Investment Trust (REIT) or Alternative Investment Funds (AIFs)
12. In case of Cash Credit explanation u/s 68, even for Loan / Borrowing the source at lender’s end must be explained bringing it at par to Share Capital, Application Money etc.
13. Faceless Module of these sections 92CA(ALP), 144C(DRP), 253 and 255is proposed to extend the date for issuing directions for the purposes till 31^st March, 2024
14. Faceless Assessment Modus Rejig plus avoiding Debar of Assessment because of non compliance of procedures.
15. No Set off of Losses in Search Cases.
16. Penalty u/s 272A increased from 100/- per day to Rs 500/- Day for failure to answer questions, sign statements, furnish information, returns or statements, allow inspections etc
17. Tax Recoverable on Company from its Director’s
    1. Section 179 of the Act contains provisions which enables Income tax authorities to recover tax due from a private company from its directors, under certain circumstances where such tax cannot be recovered from the company itself. The section makes each director of the private company jointly and severally liable for the payment of such tax with certain conditions. However, the title of the section inadvertently refers to the liability of directors of private company in liquidation.
    2. The liability of directors of a private company under this section is not conditional upon the company being in liquidation and the section makes no reference to liquidation. Therefore, to make the title of the section uniform with its provisions, it is proposed to amend the title of the section to “Liability of directors of private company”
    3. Tax Due Shall be Replaced with word fees to include all tax, interest and penalties
18. Slump Sale Definition in 2(42C) – Word Sale Deleted and replaced with Word Transfer.

GST

19. Time Limit in 16(4) increased from Sep to Nov every year. Consequential Amendment in Section 34 for Cr Notes also
20. Two Way Communication Process as in Current GST done away with.
21. Sub-section (3) of section 50 of the CGST Act is being substituted retrospectively, with effect from the 1st July, 2017, so as to provide for levy of interest on input tax credit wrongly availed and utilized