Budget 2024 Features: Key Action items, Highlights, Important points and details :
Budget Day is an enthusiastically expected occasion in India, with the two organizations and the overall population holding up eagerly to comprehend the plans and initiatives that might actually help them. This year, because of the elections, Budget 2024 has been declared later than expected for usual i.e. February 1.
The FM declared the Full Budget Plan on 23rd July 2024. She expressed that the current year’s financial plan is centered around business, skilling, MSME and the middle class category. She also stated the priorities of the Budget which were as per the following:
- Efficiency, Productivity and Resilience in Farming
- Employment and Skilling
- Comprehensive Human Resource Development and Social Justice
- Manufacturing & Services
- Urban Developments
- Energy Security
- Infrastructure
- Innovation, Research & development
- Next Generation Reforms
There were likewise many changes under Direct taxes and indirect taxes in the Budget 2024.
Continue to reading this article to find out about the significant features of the Budget 2024.
1. Direct Tax Proposition
Improved Constraint of Standard deduction and Family Pension deduction Under new regime
Under the new regime, the standard derivation for salaried people has been increased to Rs. 75,000 from Rs. 50,000. Likewise, a derivation on family benefits for people having pension income has been increased to Rs. 25,000 from Rs. 15,000 assuming if they file the taxes under the new regime.
2. Changes in Tax Structure under the New Regime
Under the New Tax slabs, the Tax structure is reexamined as follows:
Income Tax Sections Charge Rate
₹0-3 lakh 0%
₹3-7 lakh 5%
₹7-10 lakh 10%
₹10-12 lakh 15%
₹12-15 lakh 20%
Above ₹15 lakh 30%
Note: because of the above changes, a salaried worker in the new tax regime can save upto Rs. 17,500 in charges.
3. Simplification of Tax assessment from Capital Gains
For classifying assets into long term and short term, there might be two holding periods: a year and two years. The three year holding period has been eliminated.
The holding time frame for all listed securities is a year. All listed securities with a holding period surpassing a year are viewed as Long term. The holding time frame for any other resources is two years.
Unlisted securities and debentures are aligned with the tax collection on debt mutual funds and market-connected debentures. They will draw in charge on capital gains at appropriate slab rates. (i.e., they will be treated as short term independent of the time of holding.)
The tax collection from Short Term Capital Gain for listed equity shares, a unit of a equity-oriented funds, and a unit of a business trust has been increased to 20% from 15%. Other financial and non-financial resources which are held for short term will keep on drawing in the tax at slab rates.
To assist the lower and middle income classes, the limited point on the exception of Long term Capital gains on the exchange of equity shares or equity oriented units or units of Business Trust has expanded from Rs.1 Lakh to Rs.1.25 lakh each year. Notwithstanding, the rate at which it is burdened has expanded from 10% to 12.5%.
As far as possible to Rs. 1.25 lakhs has been expanded for the entire of the year, though the tax rate changed on 23rd July 2024.
The tax on long term capital gains on other financial and non-financial resources is decreased from 20% to 12.5%. While then again, the indexation benefit that recently was accessible on sale of long term resources, has now been discarded. Along these lines, any offer of long term resource produced using 23rd July, 2024, will draw in tax rate of 12.5% just without indexation benefit.
However, it is to be noticed that the arrangement in regards to profiting the advantage of FMV of resource as on 01.04.2001 as cost while selling the resource, is as yet accessible even after the new changes.
4. Changes in TDS Rates
Budget 2024 diminished the TDS rates on specified payments to work with business and further develop taxpayer compliance. Notwithstanding, TDS rates are effective just either after first Oct 2024 or first April 2025. The table beneath shows the specified payments.
5. Abolishment of Angel Tax
The Angel Tax provisions of Section 56(2)(viib) has been proposed to be taken out.
Angel Tax is an tax levied on organizations that issue new shares to financial investors at a cost over the organization’s Fair Market Value. The abundance of the Issue Price far beyond the FMV was made available u/s 56(2)(viii) as a Angel Tax in the possession of the Organization. This provision is proposed to be taken out.
The startup ecosystems will benefit considering the continuous fund raise that can occur in new businesses start ups and the consistence cost and the time that is consumed by the said provision while directing a fund raise in start up.
6. Corporate Taxes on Foreign Companies
Corporate Taxes are imposed on the organization’s total income or profit. In the Budget 2024, Finance Minister Nirmala Sitharaman has proposed to diminish the corporate tax on foreign companies from 40% to 35%.
Increased Deduction on Employer’s Contribution to Pension Scheme
Section 80CCD gives a deduction to the Employer’s contribution to the Benefits conspire up to 10%. Budget 2024 has now increased the limit deduction cutoff to 14% of the salary of the employees during the previous year.
STT on Futures and Options
The Securities Transaction Tax (STT) on futures has been increased from 0.0125% to 0.02% and STT on choices has been increased from 0.0625% to 0.1%.
7. Other Direct Tax Updates
Resuming of ITR — Only if the escaped income is Rs 50 lakh or more can an evaluation at any point be returned past a long time from the finish of the assessment year, up to a greatest time of a long time from the finish of the evaluation year. On account of search cases, the time furthest reaches of 10 years is decreased to six years.
Income Tax Appeals— To decrease the quantity of pending cases, as far as possible for filing tax dispute appeals in tax councils, high courts, and Supreme courts have been raised to Rs.60 Lakh, Rs.1 Crore, and Rs.2 Crore.
Vivaad se Vishwas Plan — This plan has been once again introduced to work with the settlement of annual assessment disputes and eliminate litigation.
8. Indirect Tax Proposals
Un-denatured Additional Neutral Alcohol utilized in the manufacturing of alcoholic liquor for human consumption to be kept out of the domain of GST. (Sec 9 of the CGST Act, Sec 5 of the IGST Act and Sec 7 of the UTGST Act are changed).
Segment 74A is introduced with determine Tax not paid or short paid or incorrectly refunded or input tax break wrongly benefited or used under any circumstance relating to the Financial Year 2024-25 onwards.
According to the new Segment 74A, in the event that any tax is unpaid, underpaid, mistakenly refunded, or on the other hand assuming the info tax credit is wrongly profited or used, the legitimate official will serve a notification to the responsible person to explain of why they shouldn’t pay the due amount with interest and penalty. In any case, no notification will be given in the event that the sum being referred to for a Financial year is not as much as Rs. 1,000.
The notice should be given in something like 42 months from the due date of the yearly return or wrongly refunded date.
It additionally accommodates a similar limitation period for giving interest notices and orders in regard of requests from the financial year 2024-25 onwards.
As far as possible for the citizens to profit the advantage of diminished punishments under this Part, by paying the tax requested along with interest, is being increased from 30 days to 60 days.
Sections 10(5), 35(6), 39(3), 49(8), 50(1), 51(7), 61(3), 62(1), 63, 64(2), 65(7), 66(6), 104(1), 107(11), and 127 gives reference to this part.
Section 11A is being embedded to enable the government to regularize non-levy or short levy of central tax because of any general practice predominant in trade.
Section 13(3) is corrected for the hour of supply in the event that the receipt is given by the beneficiary of supply to be the date of receipt.
Sub-section (5) is embedded in Section 16 reflectively from 1st July 2017 to permit ITC claims on receipt.
Some of the major improvements shall be as follow ::
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