BUDGET FOR F.Y. 2024-25

In this budget main focus on employment, skilling, MSMEs, and the middle class.

This budget focuses on 9 key priorities to create ample opportunities for everyone.

1) Productivity and resilience in Agriculture

2) Employment & Skilling

3) Inclusive Human Resource Development and Social Justice

4) Manufacturing & Services,

5) Urban Development,

6) Energy Security,

7) Infrastructure,

8) Innovation, Research & Development and

9) Next Generation Reforms.

Budget Estimates 2024-25

Particulars	2023-24               Amount in lakh crores (Revised Estimates)	2024-25 Amount in lakh crores (Budgeted Estimates)
Total Revenue Receipts	27.00	31.30
Total Capital Receipts	17.9	16.9
Total Revenue Expenditure	35.4	37.10
Total Capital Expenditure	12.70	15.00
Fiscal Deficit (% on GDP)	5.90	4.9%

                                                                                                                                                                                   

Indirect Taxes:

In Budget 2022-23, there were reduced the number of customs duty rates. Now govt make comprehensive review of the rate structure for ease of trade, removal of duty inversion and reduction of disputes.

 

Customs Duties reductions and exemptions for critical goods

Particulars	From	To
Mobile phone, mobile PCBA and chargers	20%	Basic customs duty reduced to 15%
Gold and silver	15%	Customs duty reduced to 6%
Platinum	15.4%	Customs duty reduced to 6.4%
Broodstock, polychaete worms, shrimp and fish feed	10%, 30%, and 15% respectively	Basic customs duty reduced to 5%
Alkali or alkaline earth metals, 25 rare earth minerals (like lithium)	5%	Exempted from customs duty
Capital goods for manufacturing of solar panels	7.5%	Exempted from customs duty
Cancer drugs (Trastuzumab Deruxtecan, Osimertinib and Durvalumab)	10%	Exempted from customs duty
Ferro nickel and blister copper removed	2.5%	Nil BCD
Ammonium nitrate	7.5%	10%
PVC flex banners	10%	25%
PCBA of specific telecom equipments	10%	15%

 

 

Direct Taxes:

 

(A) Providing tax relief

• New slabs and tax rates under new tax regime:-

Total income	Rate of tax
Up to 3,00,000	Nil
From 3,00,001 to 7,00,000	5 per cent
From 7,00,001 to 10,00,000	10 per cent
From 10,00,001 to 12,00,000	15 per cent
From 12,00,001 to 15,00,000	20 per cent
Above 15,00,000	30 per cent

• Standard deduction: Standard deduction to salaried individuals and pensioners is increase from 50,000 to 75,000 under the new tax regime.
• Family pension deduction: Deduction from family pension of 15,000 is increase to 25,000 under the new tax regime.
• Non-government employer contribution to New Pension scheme: It is increase the amount of deduction allowed to an employer in respect of his contribution to a pension scheme referred to in section 80CCD, from 10% to 14% of the salary of the employee. Further, a nongovernment employee in the new tax regime shall be allowed deduction of an amount up to 14% of the employee’s salary in place of 10%.

 

(B) Measures to promote investment and employment

• Incentives to IFSC: Retail schemes and Exchange Traded Funds in IFSC, shall allowed tax exemptions as similar lines as available to specified funds. Further exempt certain income of Core Settlement Guarantee Fund which will set up in IFSC. Section 94B shall not applicable to certain finance companies located in IFSC. Where a venture capital fund (VCF) located in IFSC extends a loan / other amount to an assessee, it shall no longer be called upon to explain the source of funds. Further, surcharge shall not apply to specified funds on income from securities.
• Reduction of Tax rate of foreign companies: Corporate tax rate on foreign companies reduced from 40% to 35%.
• Tax on share premium: Section 56(2)(viib) which is related to tax on share premium of private companies shall not apply from the financial year 2024-25.
• Scheme of presumptive taxation for cruise ship operations by non-residents: Put in place a presumptive taxation regime for cruise ship operations of non-residents. Further, it is proposed to provide exemption for any income of a foreign company from lease rentals of cruise ships, received from a related company which operates such ship or ships in India.

 

(C) Simplification and Rationalisation

• Introduction of block assessment scheme for search and seizure cases: Introduce a new scheme of block assessment for search cases. The block period is proposed to be six previous years and the period up to the date of conclusion of search. Total income of the block period is to be taxed at the rate of 60 %.
• Reducing the time-limit for reassessment: Time limit for reassessment is reduced from ten years to five years and rationalise the procedure for reassessment. It is also withhold refund up to 60 days of assessment under section 245 and to rationalise time limit to file appeal to ITAT under section 253.

 

• Taxation of Capital Gains:

All listed Assets

	Earlier STCG	Now STCG	Earlier LTCG	Now LTCG	Period of holding
Stocks	15%	20%	10%	12.50%	12 months
Equity Mutual Funds (>=65% Indian Equity)	15%	20%	10%	12.50%	12 months
Debt oriented MFs (>= 65% SEBI Regulated Debt Market)	Slab rate	Slab rate	Slab rate	Slab rate	24 months
Bonds/ Debentures / ZCBs (Listed)	Slab rate	20%	10%	12.50%	12 months
REITs/lnVITs	15%	20%	10%	12.50%	12 months
Overseas FoFs	Slab rate	Slab rate	Slab rate	12.50%	24 months
Gold Funds	Slab rate	Slab rate	Slab rate	12.50%	24 months

Annual LTCG exemption limit  increase from 1 lakh to 1.25 lakh for stocks and  equity MFs.

 

All Unlisted Assets            

	Earlier STCG	Now STCG	Earlier LTCG	Now LTCG	Period of holding
Real Estate	Slab rate	Slab rate	20% (with indexation )	12.50%	24 months
Bonds/Debentures/ZCBs (Unlisted)	Slab rate	Slab rate	Slab rate	Slab rate	No period of holding
Gold/ Art/Silver	Slab rate	Slab rate	20%(with indexation )	12.50%	24 months
Stocks(Unlisted)	Slab rate	Slab rate	20%(with indexation )	12.50%	24 months
Foreign equities/debt	Slab rate	Slab rate	20%(with indexation )	12.50%	24 months

           This all above changes effective for assets sold after 23rd July 2024

• TDS & TCS Rates :

Section	Present TDS Rate	Proposed TDS Rate	With effect from
Section 194D – Payment of insurance commission (in case of person other than company)	5%	2%	01.04.2025
Section 194DA – Payment in respect of life insurance policy	5%	2%	01.10.2024
Section 194G – Commission etc on sale of lottery tickets	5%	2%	01.10.2024
Section 194H – Payment of commission or brokerage	5%	2%	01.10.2024
Section 194-IB – Payment of rent by individual or HUF	5%	2%	01.10.2024
Section 194M – Payment of certain sums by certain individuals or HUF	5%	2%	01.10.2024
Section 194-O – Payment of certain sums by e-commerce operator to ecommerce participant	1%	0.1%	01.10.2024
Section 194F relating to payments on account of repurchase of units by Mutual Fund or Unit Trust of India		Omitted	01.10.2024

 

• Credit of TDC and TCS: Allow credit of all tax deducted or collected while computing the amount of tax to be deducted on salary income under section 192.
• Claiming credit for TCS of minor in the hands of parent: Now empower the Board to make rules to provide credit of tax collected to person other than collectee.
• Interest rate on delayed payment on TCS: Increase the rate of simple interest from 1% to 1.5% on delayed payments of TCS after collection, as similar in the case of TDS.
• Increase in limit of remuneration to working partners of a firm allowed as deduction:

(a)	on the first Rs. 6,00,000 of the book profit or in case of a loss	Rs. 3,00,000  or  at the rate of 90% of the book profit, whichever is more.
(b)	on the balance of the book-profit	at the rate of 60%.

 

(D) Expanding and Strengthening Tax Compliance:

• Buy-back of shares: Income from buy-back of shares by companies shall be chargeable in the hands of investor as dividend, instead of the current regime of additional income-tax in the hands of the company. Further, the cost of such shares shall be treated as a capital loss to the investor.
• Securities transaction tax (STT) rates: Increase the rates of STT on sale of an option in securities from 0.0625% to 0.1% of the option premium, and on sale of a futures in securities from 0.0125% to 0.02% of the price at which such futures are traded.
• Income from letting out of house property: Income from letting out of a house or part of the house by the owner, shall not be charged under the head ‘profits and gains of business or profession’ and will be chargeable to tax under the head ‘income from house property’ only.
• Transfer of capital asset: The transfer of a capital asset, under a gift or will or an irrevocable trust, by an entity other than an individual or a HUF only, shall be treated as transfer for the purpose of calculation of capital gain.
• TDS on payment to a partner: Payments made by firm to its partner in the nature of salary, remuneration, commission, bonus and interest, etc shall be subject to TDS at the rate of 10% for aggregate amounts more than 20,000 in a financial year.
• TCS on notified luxury goods: Levy TCS of 1% on notified goods if value exceeding 10 lakh.
• TDS on sale of immovable property: Here clarify that where more than one seller or buyer in respect of an immovable property, in that case consideration for sale of the immovable property shall be taken the aggregate of the amounts paid or payable by all the buyers to the seller or all sellers in case transfer of such immovable property.
• TDS on Floating Rate Savings (Taxable) Bonds (FRSB) 2020: TDS is proposed on interest exceeding ten thousand rupees on Floating Rate Savings (Taxable) Bonds (FRSB) 2020 or any other notified security of the Central or State Governments.
• Disallow of non-business expenditure by life insurance companies: Any expenditure which is disallow under the provisions of section 37 for the computation of profits and gains of a business shall be included to the profits and gains of the life insurance business.
• Foreign Tax Inclusion in Income Calculation: Income tax paid outside India will be treated as income received for calculating total income.
• Clarification on Professional Fees and TDS: Under section 194J fees for professional or technical services does not constitute “work” for the purposes of TDS under section 194C payments to contractors.
• Claim of settlement amounts as business expenditure: Disallow expenses which is incurred as settlement fees for any contravention of law, as may be notified by the Central Government.

 

 (E) Tax Administration:

• Calculating Fair Market Value (FMV) for Unlisted Shares: Here provide method of calculation for fair market value on 31.01.18 under section 55(2)(ac) in the case of sale of unlisted equity shares in an offer for sale in an initial public offer.
• Introduction of Vivad se Vishwas Scheme, 2024: Introduce a new scheme for settlement of pending appeals. Last date for the scheme is to be notified.
• Equalisation Levy: Equalisation Levy at the rate of 2% of consideration received for e-commerce supply of goods or services, shall no longer be applicable on or after 1st August, 2024.
• De-penalization of Small Foreign Assets: Non-reporting of foreign movable assets up to ₹20 lakh will no longer incur penalties under the Black Money Act.
• Decriminalize late payment TDS: No criminal charges if the late payment of TDS is paid before the time prescribed for filing the TDS statement.
• Six-Year Limit on Tax Orders: No order for failure to deduct/collect tax from any person shall be passed after the expiry of 6 years from the end of the financial year in which payment is made.
• Processing of Non-Deductor Statements: CBDT may make a new scheme for processing of a Non-deductor statements.
• Lower TDS/TCS Certificates: Application for lower deduction / collection certificate of tax under section 194Q TDS on payment for purchase of goods and 206C(1H) TCS on receipt of sale of goods will be allowed.
• Exempting Certain Persons from TCS: The government will notify persons or class of persons from whom no collection of tax shall be made or collection of tax shall be made at a lower rate in respect of specified transactions.
• Time limit to file correction statement for TDS/TCS statements: No correction statement shall be delivered after the expiry of 6 years from the end of the financial year in which the TDS/TCS statement are respectively required to be delivered.
• Penalty for failure to furnish statements: Penalty will be impose on late furnishing of TDS or TCS statement more than one month instead of the existing period of 12 months.
• Liaison Office Reporting: Deadline and penal provision for annual statement from liaison offices will be set.
• Transfer Pricing Officer Authority: Transfer Pricing Officer will enable to deal with specified domestic transactions which have not been referred to him by the Assessing Officer.
• Discontinue Aadhaar Enrolment ID: Using Aadhaar Enrolment ID instead of Aadhaar number will be discontinued.
• Advance Rulings Withdrawal: Applications before the Board for Advance Rulings can be withdrawn by 31.10.2024.
• Commissioner (Appeals) Authority: Commissioners (Appeals) can set aside ex-parte assessment orders.
• Tax Clearance Certificate: Include reference of Black Money Act, 2015 for the purposes of obtaining a tax clearance certificate.
• Returns filed after condonation of delay: If Returns filed after condonation of delay, then assessment can be made up to 12 months from the end of the financial year in which such return was furnished.
• Donations to National Sports Development Fund: Any sums paid as donations to the National Sports Fund set up by the Central Government are presently eligible for deduction under section 80G. The name of the fund will be corrected as National Sports Development Fund.
• References to the National Housing Board in section 43D will be removed.
• Section 132B will allow recovery of Black Money Act liabilities from seized assets.