Finance Minister Nirmala Sitharaman presented her record 7th consecutive Union Budget 2024-25 on July 23, 2024 of Modi 3.0 Government and highlights of the same were published on our website.
The same has been listed for passing in Lok sabha and subsequently be placed before Rajya Sabha. While moving the Bill for approval the FM introduced amendments to Finance Bill (No. 2) proposed on 23rd July 2024. The amendments are generally intended to address certain ambiguities/uncertainties arising from the proposals as contained in the Bill. Finance Act receives President’s assent on Aug. 16, notified in Official Gazette.
Accordingly, we have updated our key Highlights of Finance Bill (No. 2) 2024 in relation to income-tax Act, 1961 as follows :
- 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% |
- From July 23, 2024, Long term capital gain STT paid equity shares (held for more than 12 months) will 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%).The Finance Bill 2024 to discontinue the indexation benefit for long-term capital gains (LTCG) earned on or after July 23, 2024. However, while calculating tax liability, resident individuals and Hindu Undivided Families (HUFs) to choose between paying 20% tax on capital gains with indexation or 12.5% without indexation (whichever is beneficial), provided:
– The Property was acquired before July 23, 2024,
– and transferred on or after that date.
The above relief is only for the purposes of calculating LTCG tax liability. For all other purposes like aggregation, set-off, carry forward and roll over exemption, the LTCG needs to be computed without indexation benefit.Furthermore, similar relief is not available to non-resident individuals or HUFs as also to resident or non-resident firm, limited liability partnership (LLP), companies, etc.
- 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.
- Equalisation 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.
For our more detailed budget analysis report, please click.
