It is 2020 and disappointment aplenty as the Union Budget was presented yesterday. Some talking points are the zero tax resident angle and what I term as the Dubai collapse! India was taxing citizens of India only on the basis of residency by applying the test of number of days stayed outside India, but with the new budget proposals, any citizen of India living and working in any other zero tax country, say for example in the United Arab Emirates (UAE) and not liable to pay tax there, would be taxed in India like a resident. The honeymoon seems well and truly over.

The removal of Dividend Distribution tax is a decoy as this is a mere perception of removal. Initially, it would evince applause, until tax payers realise that you now have to pay taxes on the dividends earned from companies and on mutual funds, too. There is more reason to read the fine print. I call it the tax audit trap, and it should get the rap. For small and medium businesses, the threshold of R1 crore which was the limit considered for applicability of tax audit has been revised to R5 crore. This though is only if such business has not incurred cash payments and expenses in excess of five percent of sales.