Interim Budget-2024: An overview of the Direct tax proposals
The Interim Budget 2024 has brought some key highlights related to Direct Tax. Here’s what you need to know:
1. No Changes in Income Tax Slabs i.e., No tax liability for taxpayers with income up to Rs. 7 lakhs under the new tax regime.
2. No Change in Tax rates for Company, LLP or any other person i.e., 22% of existing domestic companies and 15% for certain new manufacturing companies
3. Certain tax benefits to Start-ups and investments made by sovereign wealth funds/pension funds, tax exemption of some IFSC units earlier expiring on 31.03.2024 extended up to 31.03.2025
4. Taxpayers service: Disputed Income Tax Demands up to Rs 25000 up to FY 2009-10 and of upto Rs 10,000 for FYs from 2010-11 to 2014-15, to be waived off/withdrawn by Government, to benefit around 1 crore taxpayers. In short, the write off the demand shall be as under:
a) Up to INR 25,000 pertaining up to FY 2010
b) Up to INR 10,000 for FY 2010-11 up to FY 2014-15
5. Timelines for certain events expiring on 31 March 2024, extended to 31 March 2025. This includes start-up and IFSC tax holiday eligible period.
6. 20% TCS applicable on LRS (except for medical and education purpose) applicable from 1 October 2023. Earlier provided by way of a notification, now codified. There is No reduction from 20% to 5%.
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The time limit for incorporation of Faceless Scheme for Income tax Appellate Tribunals has been extended for one more year till 31.3.2025.
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Further, the threshold time limit for the benefit of reduced corporate tax rate u/s 115BAB of 15% plus surcharge, in case of newly setup manufacturing Companies upto 31.3.2024, has not been extended. So new manufacturing Companies incorporated on or after 1.4.2024 will be taxed at 22% and not 15%, if they opt for the new regime.
The copy of the Finance Bill 2024 is enclosed herewith.
