Key Direct Tax Proposals from FM’s Budget Speech
- Comprehensive Review of Income Tax Act, 1961 – proposed to be completed in 6 months
- 2 tax exemption regimes for charities are proposed to merged into one
- TDS rate on e-commerce operators to be reduced from 1% to 0.1%
- Credit of TCS to be given in the TDS to be deducted on salaries
- Proposes to simplify reopening and re-assessment – reducing the time period
- SOP for TDS defaults, simplify and rationalise compounding guidelines
- FM: Simplification and Rationalisation of Capital Gains
- Re-assessment in search cases reduced to 6 years from 10 years before date of search
- STCG on certain financial assets to attract 20% tax
- LTCG all financial and non-financial gains – 12.5%
- Listed financial assets held for more than 1 year classified as long term
- Limit of exemption on LTCG on certain assets increased to 1.25 lakhs
- Announces Vivaad se Vishwas Scheme 2024
- To dispose of backlogs of first appeal, plan to deploy more officers
- Expand the scope of “safe harbor” rules
- Proposes to increase monetary limits for filing appeals
- To bolster Indian startup ecosystem : Abolish Angel tax for all classes of tax
- To streamline TP assessment procedure
- Simpler tax regime for foreign shipping cos. operating domestic cruises in the country
- Propose to reduce corporate tax on foreign cos. from 40% to 35%
- STT on F&O is increased 0.2% & 0.1%
- Proposes to tax income from buyback
- Non-reporting of movable assets of upto Rs. 20 Lacs proposed to be de-penalised under IBC
- Withdrawal of Equalisation Levy
- Personal IT rates – under the new tax regime – Standard deduction for salaried employees to increase from Rs. 50K to 75K
- Revises tax structure under New Regime
Key GST Proposals :
- Due to non-constitution of GSTAT and to avoid the appeals from getting time barred, modifies time limit for filing appeals before the Appellate Tribunal w.e.f. August 01, 2024
- Proposes amendment in section 109 to notify cases which shall be heard ‘only’ by principal bench of GSTAT
- Restricts blockage of ITC for tax paid under section 74 to demands upto FY 2023-24
- Restricts applicability of penal provisions to E-commerce operators
- Proposes conditions, restrictions for revocation of cancellation of GST registration
- Prohibits refund in zero-rated supply of goods where such goods are subjected to export duty
- Reduces maximum amount of pre-deposit for filing appeals with Appellate Authority (Rs. 20 crores from Rs. 25 crores) , Appellate Tribunal (from 20% with a maximum amount of Rs. 50 crores of central tax to 10 % with a maximum of Rs. 20 crores of central tax)
- Common time limit for issuance of demand notices and orders, inserts new section 74A in CGST Act
- Retrospectively relaxes the time limits to avail input tax credit, inserts new sub-sections (5) and (6) in section 16
- Regularizes non-levy and short-levy of central tax and cess, inserts new section 8A in GST (Compensation to States) Act
- Provides conditional waiver of interest or penalty or both for demands under Sec. 73
- Amends anti-profiteering clause (Section 171) for notifying GSTAT to handle anti-profiteering cases and to provide for a sunset clause for accepting anti-profiteering case
- Amends section 13 of the CGST Act dealing with time of supply of services in reverse charge supplies
- Mandates filing of monthly returns by TDS deductors
- Retrospectively amends transitional credit provision for ISD
- Keeps Extra Neutral Alcohol outside the purview of central tax
These changes will be brought into effect from a date to be notified in coordination with States, as per recommendations of the GST council
