Summary of Amendments \u2013 DIRECT TAXATION
\nFinance Act, 2024
\nSummary of Key Amendments \u2013 DIRECT TAXATION
\nDirect Tax:
\n1.\tTax rates under section 115BAC (default tax regime) \u2013 (Effective from A.Y 25-26).
\nSl no.\tTotal Income\tRate
\n1\tUpto Rs. 3,00,000\tNil
\n2\tFrom Rs. 3,00,001 to Rs. 7,00,000\t5%
\n3\tFrom Rs. 7,00,001 to Rs. 10,00,000\t10%
\n4\tFrom Rs. 10,00,001 to Rs. 12,00,000\t15%
\n5\tFrom Rs. 12,00,001 to Rs. 15,00,000\t20%
\n6\tAbove Rs. 15,00,000\t30%
\n\u2022\tCompared to erstwhile slab rates of 115BAC, the amended slab rates will result in a tax saving of 10,000\/- (approx) for total income ranging on and above 10 lakhs.
\n2. No change in old tax regime.
\n3. New tax regime has been made into default tax regime. However, individuals are free to choose between the old tax regime and new tax regime (default regime).
\n4. No change in tax rates with respect to Co-operative societies, Firms, Local Authorities.
\n5. Rates for deduction of income-tax at source during the financial year (FY) 2024-25 from certain incomes other than \u201cSalaries\u201d:
\n\u2022\tTax rate in case of company which is not a domestic company (Foreign Company), has reduced to 35% from 40%.
\nSl No.\tIncome\tFor transfers taking place before 23rd day of July, 2024 \/ Tax rate\tFor transfers taking place on or after 23rd day of July, 2024 \/ Tax rate
\n1\tLong-term capital gains on financial assets. (Listed equity\/unit of business trust\/listed equity mutual funds)\t10% (on exceeding 1lakh)\t12.5% (on exceeding 1.25Lakh)
\n2\tLong-term capital gains non-financial assets. (unlisted equity securities\/immovable property)\t20% with indexation\t12.5% without indexation
\n3\tShort-term capital referred to in section 111A (listed equity & Equity oriented units)\t15%\t20%
\n\u2022\tUnder the head Income from Capital gains:
\nExample 1 : House sold in FY 24-25 for 1 crore which is acquired in 2001 for 20 Lakh
\nParticulars\tLTCG before 23\/7\/24 (tax @20%)\tLTCG after 23\/7\/24 (Tax @ 12.5%)
\nSale consideration\t1,00,00,000\t1,00,00,000
\nLess: COA\t72,60,000\t20,00,000
\n\t (20,00,000*363\/100)
\nLTCG\t 27,40,000\t 80,00,000
\nTax\t5,48,000\t 10,00,000
\nExcess Taxes\t\t 4,52,000
\nExample 2 : House sold in FY 24-25 for 5 crore which is acquired in 2001 for 20 Lakh
\nParticulars\tLTCG before 23\/7\/24 (tax @20%)\tLTCG after 23\/7\/24 (Tax @ 12.5%
\nSale consideration\t 5,00,00,000\t 5,00,00,000
\nLess: COA\t72,60,000\t 20,00,000
\n\t (20,00,000*363\/100)
\nLTCG\t4,27,40,000\t4,80,00,000
\nTax\t85,48,000\t60,00,000
\nBenefit Obtained\t\t 25,48,000
\n\u2022\tThe exemption under sec 112A for LTCG has been increased from Rs.1,00,000\/- to Rs.1,25,000\/-
\n\u2022\tNo Indexation benefit is available.
\n\u2022\tFor all listed securities with the holding period of not more than 12 months to be called short term capital asset and above 12 months will be long term capital asset.
\n\u2022\tFor all other assets (like immovable property, unlisted shares) the holding period of not more than 24 months to be called short term capital asset and above 24 months will be long term capital asset.
\n\u2022\tIn case of Immovable Property acquired by Resident Individual\/HUF before 23rd of July, 2024 and sold after this date and if it\u2019s a long-term asset then the assessee has option to pay tax @ 20% after indexation or pay 12.5% of Tax with no indexation.<\/p>\n
6. Standard Deduction In case of salary income has been increased from Rs. 50,000\/- to Rs. 75,000\/- in new tax regime (default tax regime).
\n7. Deduction on family pension for pensioners enhanced from Rs. 15,000\/- to Rs. 25,000\/-
\n8. Deduction limit in respect of private sector employers\u2019 contribution to NPS, has been increased from 10% of salary to 14% of salary. Here, salary includes dearness allowance, if the terms of employment so provided, but excludes all other allowances and perquisites.
\n9. The allowable expenditure of remuneration paid to workings partners is amended as follows \u2013
\nSl No.\tParticulars\tRemuneration allowed
\n1\ton the first Rs. 6,00,000 of the book-profit or in case of a loss\tRs. 3,00,000 or at the rate of 90 per cent of the book-profit, whichever is more;
\n2\ton the balance of the book-profit\tat the rate of 60 per cent
\n10. Change in rates of TDS is as mentioned below:
\nSection\tPresent TDS Rate\tProposed TDS Rate\tWith effect from
\nSection 194D \u2013 Payment of insurance commission (person other than company)\t5%\t2%\t01-04-2025
\nSection 194DA \u2013 Payment in respect of life insurance policy\t5%\t2%\t01-10-2024
\nSection 194G \u2013 Commission etc on sale of lottery tickets\t5%\t2%\t01-10-2024
\nSection 194H \u2013 Payment of commission or brokerage\t5%\t2%\t01-10-2024
\nSection 194-IB \u2013 Payment of rent by certain individuals or HUF\t5%\t2%\t01-10-2024
\nSection 194M \u2013 Payment of certain sums by certain individuals or Hindu undivided family\t5%\t2%\t01-10-2024
\nSection 194-O \u2013 Payment of certain sums by e-commerce operator to e-commerce participant\t1%\t0.1%\t01-10-2024
\nSection 194F relating to payments on account of repurchase of units by Mutual Fund or Unit Trust of India\tomitted\t01-10-2024
\n11. The insertion of new TDS section 194T is inserted to bring payments such as salary, remuneration, commission, bonus and interest to any account (including capital account) of the partner of the firm under the purview of TDS for aggregate amounts more than Rs 20,000 in the financial year. Applicable TDS rate will be 10% and the said provision will be effective 1st day of April, 2025.
\n12. Non-reporting \/ failure to disclose the information\/incomes from foreign assets located outside India, attracts penal provisions u\/s 42 or 43 of the Black Money Act amounting to Rs.10 lakhs earlier. This non-reporting \/ wrong disclosure of assets up to a value of Rs. 20 lakhs is now condoned with effect from 01.10.2024.
\n13. Securities Transaction Tax (STT) has been increased from 0.0125% to 0.02% on futures trading, and from 0.0625%to 0.10% in case of options trading.
\n14. Simplification of Reassessment :
\n\u2022\tAssessment can now be reopened beyond three years upto five years (earlier 10 years) from the end of Assessment Year only if the escaped income is \u20b9 50 lakh or more.
\n\u2022\tIn search cases, time limit reduced from ten to six years before the year of search.
\n15. Angel tax provisions of Section 56(2)(viib) has been abolished w.e.f 1st day of April, 2025.
\n16. Equilization levy of 2% is withdrawn with effect from 01.08.2024 \u2013 This relates to levy of tax on any consideration received or receivable by an e-commerce operator from e-commerce supply or services made or provided or facilitated by it.
\n17. In view of the mounting pendency of appeals before appellate authorities, introduction of Direct Tax Vivad se Vishwas Scheme, 2024 is brought with the objective of providing a mechanism of settlement of disputed issues, thereby reducing litigation without much cost to the exchequer.<\/p>\n","protected":false},"excerpt":{"rendered":"
Tax rates under section 115BAC (new tax regime).<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-15117","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"yoast_head":"\n