The changes proposed in Income Tax and GST in the Union Budget,2024 presented on 23.07.2024 are as follows
Income Tax
These changes are proposed to be applicable from 1st April 2024 unless otherwise mentioned
Change in slab rate
The proposed tax rates for the new scheme are
- 0-3 lakh rupees – NIL
- 3-7 lakh rupees – 5 %
- 7-10 lakh rupees – 10 %
- 10-12 lakh rupees – 15 %
- 12-15 lakh rupees – 20 %
- Above 15 lakh rupees – 30 %
Capital Gain
- STCG increased from 15 to 20%
- LTCG changes to 12.5%. There will not be any indexation benefit henceforth for transfer from 23rd July 2024 onwards. Earlier the rate was 10% (without indexation) and 20% (with indexation)
- The exemption limit for LTCG is increased to 1.25 lakhs
- Changes in the Holding period
- 12 months for Listed financial assets
- 24 Months for unlisted financial and non-financial assets
- STT on futures and options of securities increased to 0.02 % and 0.1 %respectively.
These new CG Rates are proposed to be applicable on transfers done from 23rd July
Deduction
- The standard deduction for salary is increased from 50,000 to 75,000
- Deduction on family pension for pensioners increased from Rs. 15,000/- to Rs. 25,000/
- Deduction for Employer contribution to NPS increased to 14% from 10 %
Remuneration to Partner
The limit for remuneration to partners of partnership firm is increased.
- Upto 6 Lakh of profit or no profit – 90% of Profit or Rs 3,00,000/- whichever is more
- Above 6 Lakh – 60% of Book profit
However, TDS is to be deducted for remuneration, interest, salary, bonus or commission paid or likely to be paid to partners exceeding Rs 20,000 during the financial year
TCS and TDS
- An employee can share TCS paid by him with an employer which shall be considered for computing tax to be deducted on salary payments by the employer
- Clarity on non-applicability of 194C where TDS deducted under 194J
TDS rates are proposed to be reduced from 01.10.2024 for following transactions
| Section | Transaction | Existing Rate | Proposed Rate |
| 194 DA | Payment in respect of life insurance policy | 5% | 2% |
| 194 G | Commission etc. on sale of lottery, tickets | 5% | 2% |
| 194 H | Payment of commission or brokerage | 5% | 2% |
| 194 IB | Payment of rent by certain individuals or HUF | 5% | 2% |
| 194 M | Payment of certain sums by certain individuals or Hindu undivided family responsible for paying any sum to any resident for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract | 5% | 2% |
| 194 O | Payment of certain sums by e-commerce operator to e-commerce participant | 1% | 0.1% |
| 194 F | Payments on account of repurchase of units by Mutual Fund or Unit Trust of India | 20% | 0% |
Clarity on the applicability of TDS deducted on the sale of Immovable property. The consideration and stamp duty if less than Rs 50 lakhs then TDS is not to be deduced. Clarity is provided that such consideration shall be the aggregate sum paid or payable by all the transferees to the transferor or all the transferors
Other
- Angel Tax to be abolished
- Income from Buy Back chargeable in the hands-on recipient ( For Buy Back on or after 1st October 2024)
GST
These changes shall be applicable from the date notified
Goods/Services not taxable
- Un-denatured extra-neutral alcohol or rectified spirit used for manufacture of alcoholic liquor for human consumption
- Apportionment of co-insurance premium by the lead insurer to the co-insurer, pertaining to insurance services which are jointly supplied as per the coinsurance agreements, provided that the tax has been paid by the lead insurer on the entire amount of premium paid by the insured. –
- Services by the insurer to the re-insurer, for which the ceding commission or the reinsurance commission is deducted from the reinsurance premium paid by the insurer to the reinsurer, provided that tax liability on the gross reinsurance premium inclusive of reinsurance commission or the ceding commission is paid by the reinsurer
Amnesty/Dispute resolution for Demand of FY 2017-18,2018-19,2019-20
- For demands of period of FY 2017-18,2018-19 and 2019-20 a relief has been provided. The interest and penalty shall stand waived if tax is paid up to the date notified. The date notified is 31.03.2025
- This relief is only for notice/demand not involving fraud, suppression or misstatement
- The GST Council has recommended the date of deposit of tax as 31.03.2025
- The conditions for availing the relief of this are yet to be notified
Time Limit to claim ITC in certain cases
For FY 2017-18,2018-19,2019-20.
ITC can be claimed if availed in return is filed upto 30th November 2021
ITC in case of revocation of cancellation of GST Registration
- If GST Registration is cancelled and later revoked, then ITC for such period where GST Registration was cancelled can be availed
- In Return filed up to 30 November following the financial year to which such invoice or debit note pertains
- Return filed within 30 days of revocation order, whichever is later
- In such cases, ITC for the period for cancellation can be availed
Time limit to issue invoice under RCM
A time limit will be prescribed within which an invoice by the recipient for services/goods under RCM is to be issued.
Introduction of New section for issuance of notice
- A new Section 74A has been introduced wherein all show cause notices pertaining to FY 2024-25 onwards shall be issued under this section.
- This section deals with both categories i.e one involving Fraud, etc and one which does not
- The period to issue the notice shall be 42 months from the due date of the annual return. In case of an erroneous refund, the date shall be the date of the grating refund
- The order is to be issued within 12 months of the issue of notice. This period can be extended upto 6 months subject to permission
GST-TDS Return to be filed monthly
Return (GSTR-7) to file for each month even if NIL as compared to existing interpretation where the return was to be filed when the tax was deducted
Other
- Restriction on refund of ITC in case of zero-rated goods where export duty is applicable
- Authorised Representative can now appear in Summons,. However, this is if the officer directs so
- Reduction in pre-deposit for appeal with appellate tribunal to 10% or Rs 40 crores
- Amendment in Section 171 to allow a last date to be notified for filing application for Anti Profiteering. GST Council has recommended a sunset date of 01.04.2025
Jul 23, 2024 - Blog - Team SSB
