Finance Minister Nirmala Sitharaman presented her record 7th consecutive Union Budget 2024-25 today (on July 23, 2024) of Modi 3.0 Government. Key highlights of direct tax proposals are as under:
- Revised slab rate for person opting new tax regime as follows:
| Total Income |
Rate of Tax |
| Upto Rs. 3 Lakh |
Nil |
| More than Rs. 3 Lakh to Rs. 7 Lakh |
5% |
| More than Rs. 7 Lakh to Rs. 10 Lakh |
10% |
| More than Rs. 10 Lakh to Rs. 12 Lakh |
15% |
| More than Rs. 12 Lakh to Rs. 15 Lakh |
20% |
| Income more than Rs. 15 lakh |
30% |
- Long term capital gain STT paid equity shares (held for more than 12 months) will now be taxed 12.5% (earlier 10%) on amount exceeding Rs. 1,25,000 (earlier Rs. 1,00,000) and Long Term Capital Gains on other assets will also be taxed at revised rate of 12.5% (earlier 20%).
- Short term capital gain on STT paid equity shares will now be taxed 20% (earlier 15%).
- Standard deduction on pension is increased from Rs. 50,000 to Rs. 75,000 and if family member receives pension, deduction of Rs. 25,000 (earlier Rs. 15,000).
- There will be no addition to the income of an Unlisted Company who issued share capital above face value and the aggregate consideration received for such shares exceeding such fair market value.
- Higher interest rate of 1.5% on delay in depositing TCS.
- To reduce pendency of litigation and to reduce cost of litigation Direct Tax Vivad se Vishwas Scheme, 2024 will be introduced.
- Consideration received by shareholders on buyback of shares as a deemed dividend and shall be charged to tax.
- Rent Income of a residential house shall not be chargeable under the head “Profits and gains of business or profession” and shall be chargeable under the head “Income from house property”.
- TDS @10% by firm (Partnership as well as LLP) responsible for paying any sum in the nature of salary, remuneration, commission, bonus or interest to a partner of the firm, exceeding Rs. 20,000 p.a.
- In order to track the increasing expenditure by the high net worth persons, it is proposed to levy the TCS on sale of any other goods in the nature of luxury goods by the specified person.
- Where there are more than 1 buyer/seller, aggregate consideration shall be considered for applicability of limit of Rs.50 lacs and TDS @1% required to be deducted.
- Any expenditure incurred to settle proceedings initiated in relation to a contravention under any law for the time being in force, will not be allowed as deduction as Business Expenditure.
- Equalization levy at the rate of 2% shall not be applicable on the amount of consideration received/ receivable by an e-commerce operator from e-commerce supply or services.
- Penalty for failure to disclose foreign income and asset in the ITR, shall not apply in respect of an asset or assets (other than immovable property) where the aggregate value of such asset or assets does not exceed twenty lakh rupees.
- No correction statement can be filed after the expiry of 6 years from the end of the financial year in which TDS/TCS returns delivered.
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