• By ADMIN
• Posted 02 Aug, 2024
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India Budget 2024: Key Highlights (23.07.2024)

The India Budget 2024 introduced significant changes in both income tax and GST regulations. These changes aim to simplify processes, reduce litigation, and address various economic needs.

1. CHANGES IN THE INCOME TAX PROVISIONS

1. Old Tax Regime:

  No change in tax rates.

2. New Tax Regime (Section 115BAC):

   5% tax for income between Rs. 3 lakh to Rs. 7 lakh.

   10% tax for income between Rs. 7 lakh to Rs. 10 lakh.

   15% tax for income between Rs. 10 lakh to Rs. 12 lakh.

   20% tax for income between Rs. 12 lakh to Rs. 15 lakh.

   30% tax for income above Rs. 15 lakh.

   Example: For an income of Rs. 8 lakh:

   - Rs. 3 lakh to Rs. 7 lakh: 5% = Rs. 20,000

   - Rs. 7 lakh to Rs. 8 lakh: 10% = Rs. 10,000

   - Total Tax: Rs. 30,000 (before applicable Education Cess)

3. Standard Deduction:

Increased from Rs. 50,000 to Rs. 75,000 for those who opt for new regime which is the default regime.

4. Capital Gains:

5. Short-term capital gains tax rate increased from 15% to 20%.

5. Long-term capital gains tax rate set at 12.5%.

5. Threshold for long-term capital gains tax under Section 112A increased to Rs. 1.25 lakh.

5. No indexation benefit for long-term capital gains. (Those who are holding for more than 10 years might be paying more tax than holding less than 10 years)

For understanding more

Example: For selling shares held for 18 months:

Sale amount: Rs. 2 lakh, Purchase amount: Rs. 1.5 lakh

Capital Gain: Rs. 50,000, Tax: 12.5% = Rs. 6,250

5. Unlisted Debentures and Bonds:

Taxed at applicable rates.

6. Mutual Funds:

Mutual funds investing over 65% in debt will be taxed under Section 50AA.

7. Gifts of Capital Assets:

Taxable if gifted after April 1, 2024, by non-individuals/HUFs.

8. Foreign Companies:

Tax rate reduced from 40% to 35%.

9. Angel Tax u/s 56(2):

Abolished from AY 2025-26.

10. TCS on Luxury Goods:

Applicable for purchases exceeding Rs. 10 lakh.

11. New TDS Provisions:

10% TDS on payments to partners (Section 194T).

TDS for e-commerce reduced from 1% to 0.1%.

12. Reporting Foreign Assets:

Threshold increased from Rs. 5 lakh to Rs. 20 lakh.

13. Family Pension Deduction:

Increased from Rs. 15,000 to Rs. 25,000.

14. Share Buy-back Tax:

Taxable as dividend income.

15. NPS Deduction:

Non-government employees can claim up to 14% of salary for employer's contributions.

16. Charitable Trusts:

Merged exemption schemes.

New Section 12AC for merger without exit tax.

17. Presumptive Taxation for Non-Residents:

New regime for cruise ship operators (Section 44BB).

18. Donations Deduction:

For National Sports Development Fund under Section 80G.

19. Block Assessment:

For search cases, covering the year of search and six preceding years.

20. Assessment Reopening:

For income escaping assessment if Rs. 50 lakh or more.

21. Immovable Property Transactions:

Threshold for TDS applies to total amount paid by all transferees.

22. Assessment Completion:

Within 12 months for returns filed under section 119(2)(b).

23. Prohibitive Expenditure:

Includes expenditure for settling legal contraventions.

24. Sum Deducted under Chapter XVII-B:

Deemed as income for computing assessee's income.

25. Returns under Section 119(2)(b):

Provisions of Section 139 applicable.

26. Aligning Capital Gains Tax Rates:

Amendments to Sections 115AD, 115AB, 115AC, 115ACA, and 115E.

27. Direct Tax Vivad Se Vishwas Scheme:

Settlement mechanism for disputed issues.

28. Equalisation Levy:

Not applicable to e-commerce services after 01-08-2024.

29. Benami Property Transactions:

Immunity for Benamidars providing evidence against beneficial owners. Read for more

30. No Prosecution for TDS Default:

If TDS deposited before due date for TDS statement filing.

31. Provisions applicable to Partnership Firms

The allowablity of salary, remuneration etc had been increased from existing limit to Rs.3,00,000. Read for more

32. Reduction of TDS Rates

Section	Nature of Payment	Existing Rate	Proposed Rate
194DA	Payment in respect of Life Insurance Policy	5%	2%
194F	Repurchase of Units by MF or UTI	20%	Omitted
194G	Commission and other payments on sale of lottery	5%	2%
194H	Commission and Brokerage	5%	2%
194IB	Payment of Rent by Certain Individuals or HUF	5%	2%
194M	Payment to contractor, Commission agent, broker or professional by certain individuals or HUF	5%	2%
194O	Payment by e-Commerce operator to e-commerce participant	1%	0.1%
194T	Payment in the nature of salary, remuneration, commission, bonus or interest to partners of the firm	-	10%

2. Changes in Goods & Services Law

1. Demand Determination:

Existing procedures for Sections 73 and 74 until FY 2023-24.

New procedure under Section 74A from FY 2024-25. For understanding Section 74A

2. Demand Notice Time Limit:

Up to 42 months, with demand orders within 12 months of notice.

3. Extra Neutral Alcohol:

Exempt from GST when used in alcoholic liquor for human consumption.

4. Section 11A:

  Government can regularise non-levy or short levy due to general trade practice.

5. Reverse Charge Supplies:

  Time of supply is the invoice date by the recipient.

6. ITC Availment:

Allowed till 30-11-2021 for FYs 2017-18 to 2020-21.

7. Monthly Return Filing:

Mandatory for TDS deductors.

8. No Refund for Zero-Rated Goods:

If goods are subject to export duty.

9. Authorised Representatives:

Can appear on behalf of summoned persons.

10. Pre-deposit Reduction:

For filing appeals before Appellate Authorities.

11. Section 128A:

Conditional waiver of interest and penalty for demand notices under Section 73 for FYs 2017-18 to 2019-20.

For Understanding Section 128A of CGST Act

12. Co-Insurance Premium:

Apportionment not treated as supply if lead insurer pays tax on the entire premium.

Conclusion

The India Budget 2024 introduces significant changes in both income tax and GST regulations. These changes aim to simplify processes, reduce litigation, and address various economic needs. Understanding these new provisions will help taxpayers and businesses comply effectively.