Budget Booklet 2024 - by Avinash Gupta - Whatsapp

Analysis of Budget 2024
1
2
Index
Sl.No. Particulars Page No.
1. Tax Rates 1
2. Individual Tax 6
3. Business Taxation 8
4. Capital Gains 10
5. Other Sources 15
6. International Taxation 17
7. Charitable Trust 22
8. Tax Administration and Compliance 24
9. Penalty 32
10. Tax Deduction at Source 33
11. Miscellaneous Amendments 40
12. Direct Tax Vivad se Vishwas Scheme, 2024 42

3
4
1. Tax Rates
i. Personal Tax Rates
New Tax Regime [Mandatory if not opted for old]
Individuals
Proposed rate of tax
Income (Rs)
(AY 2024-25)
Upto 3,00,000 Nil
3,00,001-7,00,000 5%
7,00,001-10,00,000 10%
10,00,001- 12,00,000 15%
12,00,001 -15,00,000 20%
Above 15,00,000 30%
*Note- No deduction available except mentioned below.
• Standard Deduction U/s 16(ia) Increased to Rs.75,000/-
• Family Pension U/s 57(iia) Increased to Rs.25,000/-
• Deposited in the Agniveer Corpus Fund u/s 80CCH(2)
Old Regime [Need to be opted]

Individuals other than Senior Citizen
Income (Rs)
(AY 2025-26)
Upto 2,50,000 Nil
2,50,001-5,00,000 5%
5,00,001-10,00,000 20%
10,00,001 and above 30%

1
Senior Citizen (Between 60 – 80 years of age)
Income (Rs)
(AY 2025-26)
Upto 3,00,000 Nil
3,00,001-5,00,000 5%
5,00,001-10,00,000 20%
10,00,001 and above 30%
Super Senior Citizen (Between above 80 years of age)

Income (Rs)
(AY 2025-26)
Upto 5,00,000 Nil
5,00,001-10,00,000 20%
10,00,001 and above 30%
Note: Cess of 4% is leviable on the amount of income tax and surcharge, if

any.
Rebate u/s 87A available for a resident Individual (whose income does not
exceed 7,00,000). The amount of rebate is 100% of income tax calculated
before education cess or 25000 whichever is less i.e. no tax under new
regime upto Rs. 7 lakhs of Income.
Rebate u/s 87A continues under Old Regime for a resident individual (whose
income does not exceed 5,00,000).The amount of rebate is 100% of income
tax calculated before education cess or 12,500 whichever is less.

2
Surcharge to be added
Proposed Rate of Tax Proposed Rate of Tax
rate of tax (AY 2024-25) rate of tax (AY 2024-25)
Income (Rs) (AY 2025-26) (AY 2025-26)
New Regime Old Regime
Upto 50 Lakhs Nil Nil Nil Nil
50 Lakhs -1 Cr 10% 10% 10% 10%
1 Cr- 2 Cr 15% 15% 15% 15%
2 Cr – 5 Cr 25%* 25%* 25%* 25%*
Above 5 Cr 37%* 37%* 37%* 37%*
*Surcharge on Dividend income and capital gains u/s 111A, 112 & 112A will be restricted to
15% only.
Amendment in Capital Gain Tax Rates.

Proposed rate Proposed Rate of Tax
of Tax (AY- rate of Tax (AY-2024-
Section No. 2025-26) (AY-2025-26) 25)
(till 22-07- W.e.f ( 23-07-
2024) 2024)
Short-term capital u/s 111A 15% 20% 15%
20% with 20% with
Long-term capital gains u/s 112 12.5%
Indexation Indexation
Long-term capital gains u/s112A 10%* 12.5%* 12.5%*
*The Exemption limit for u/s 112A has been increased from Rs. 1,00,000/- to Rs. 1,25,000/- w.e.f
from 23rd July 2024.
Amendment is proposed in section 2 (42A) of the Act holding period for all listed securities will
be held 12 months and all others Assets will be 24 months to calculate Long term capital Gain
w.e.f from 23rd July 2024.
Amendment is proposed in section 50AA w.r.t. the tax rate on unlisted debentures and unlisted
bonds are proposed to be brought to tax at applicable rates w.e.f from 23rd July 2024
Amendment in second proviso to section 48, indexation of cost removed for calculation of any
long-term capital gains which is presently available for property, gold and other unlisted assets
w.e.f from 23rd July 2024.
Amendments to section 115AD, 115AB, 115AC, 115ACA and 115E are being made to align the
rates of taxation in respect of long-term capital gains proposed under section 112A and 112
and rates of short term capital gains proposed under section 111A. w.e.f from 23rd July 2024.

3
ii. Corporate Tax Rates
Income
(AY 2025-26)
Domestic Company having total income
30%*
less than 1 Crore
30%* plus surcharge of 7%
more than 1 Crore but less than 10 Crore
30%* plus surcharge of 12%
more than 10 Crore
Other Company having total income
35%
less than 1 Crore
35% plus 2%
more than 1 Crore but less than 10 Crore
35% plus 5%
more than 10 Crore
Note: Cess of 4% shall be levied over and above the above taxes.
*Reduced rate of 25% shall be applicable where total turnover / receipts in
the last P.Y. does not exceed Rs 400 Cr
*The domestic companies also have an option to opt for taxation under section
115BAA or section 115BAB. The tax rate is 15% in section 115BAB and 22% in section
115BAA. Surcharge is 10% in both cases.
iii. Firms
Flat tax rate of 30% and surcharge @ 12% of income tax if net
income exceeds Rs 1 Cr. Additionally, cess of 4% is applicable.

4
iv. Cooperative Societies
Particular Rate of Tax
Having total income of less than 10,001 10%
Having total income of more than 1,000 plus 20% of total income
10,000 but less than 20,001 in excess fo Rs.10,000
Having total income of more than 3,000 plus 30% of total income
20,000 in excees of Rs. 20,000
Surcharge to be added
Income (Rs) Proposed rate of tax Old rate of Tax
(AY 2025-26) (AY 2024-25)

Upto 1 Crore Nil Nil
1 Crore- 10 Crore 7% 7%
Above 10 Crore 12% 12%
Additionally, cess of 4% shall be levied.

A co-operative society resident in India have the option to pay tax at 22%, as per
the provision of Section 115BAD, Surcharge would be at 10% on such tax.
A co-operative society resident in India have the option to pay tax at 15%, as per
the provision of Section 115BAE, Surcharge would be at 10% on such tax.

5
2. Individual Tax
2.1 Discontinuation of the provisions allowing quoting
of Aadhaar Enrolment ID in place of Aadhaar number
[w.e.f. 01.10.2024]
Section 139AA of the Income-tax Act requires individuals eligible for
an Aadhaar number to quote it in their PAN application and income
tax return from 01.07.2017. For those without an Aadhaar number,
quoting the Aadhaar Enrolment ID was initially permitted.
Given the widespread adoption of Aadhaar since 2017, the option
to use the Enrolment ID is now seen as a potential source of PAN
duplication and misuse. Therefore, it is proposed that the provision
allowing the use of the Aadhaar Enrolment ID will be discontinued
from 01.10.2024. Individuals who obtained their PAN using the
Enrolment ID will be required to provide their Aadhaar number by
a specified date to ensure compliance and prevent issues related to
PAN duplication.
2.2 Revision of rates of STT [w.e.f 1st October 2024]
The Securities Transaction Tax (STT) was introduced through the
Finance (No.2) Act, 2004, applicable to specified securities traded on
recognized stock exchanges in India. Entities like stock exchanges,
mutual funds with equity schemes, insurance companies, and lead
merchant bankers collect and remit STT to the Central Government
within seven days of collection. Since its inception, STT rates have
been periodically revised.
Currently, STT is levied at 0.0625% on the premium of options sold,
0.0125% on the price of futures sold, and 0.1% on both purchase and
sale of equity shares during delivery trades. For exercised options,
the rate is 0.125% of the intrinsic price paid by the purchaser.
Now, it is proposed to increase STT rates to 0.1% on options premium
and 0.02% on futures trading prices, reflecting market dynamics and
trading volumes in these segments.

6
2.3 Standard Deduction and deduction from family
pension [A.Y. 2025-26]
In order to promote new tax regime, it is proposed to increase the
deduction limit from Rs. 50,000 to Rs. 75,000 for salaried individuals
covered u/s 16. Similarly, for income from family pension, the
deduction limit would rise from Rs. 15,000 to Rs. 25,000 under
section 57.
Section Existing Deduction Proposed De-

and Clause Limit duction Limit
`75,000 or
`50,000 or amount of amount of salary
Section 16 (ia)
salary (whichever is less) (whichever is
less)
33.33% of family
33.33% of family pension pension income
Section 57 (iia) income or `15,000 or `25,000
(whichever is less) (whichever is
less)

7
3. Business Taxation
3.1 Disallowance of settlement amounts paid [A.Y. 2025-
26]
Explanation 1 of section 37(1) specifies that any expenditure
incurred for a purpose that constitutes an offence or is prohibited
by law cannot be considered as incurred for business or professional
purposes, and thus, no deduction or allowance is permissible for
such expenditure.
Explanation 3 further clarifies that this prohibition includes
expenditure incurred to provide benefits or perquisites to individuals
in violation of laws or regulations, or to compound offences under
any law.
The proposed amendment aims to explicitly include expenditure
incurred to settle proceedings related to contraventions under
notified laws as part of the expenditures that are not allowable for
deduction under section 37. In essence, the amendment reinforces
that settlement amounts paid due to legal infractions are not
deductible as business expenses under the Income Tax Act.
3.2 Preventing misuse of deductions of expenses
claimed by life insurance business [A.Y. 2025-26]
Section 44 of the Income Tax Act governs the computation of profits
and gains from insurance businesses, including mutual insurance
companies and co-operative societies. Rule 2 of the First Schedule,
applicable to life insurance businesses, calculates profits based on
the annual average surplus adjusted from actuarial valuations under
the Insurance Act, 1938, for the last inter-valuation period.
An amendment is proposed to Rule 2 of the First Schedule to provide
that any expenditure not permitted under Section 37 shall be added
back to the profits and gains of the life insurance business during
computation.

8
3.3 Remuneration to working partners of a firm [A.Y. 2025-
26]
Since Assessment Year 2010-11, the limit for partner remuneration
to working partner is structured as follows:
1 On the first Rs. 3,00,000 of Rs. 1,50,000 or 90% of the book-

book-profit (or loss) profit, whichever is more.
2 On the balance of the 60% of book profit
book-profit
The revised limits for deduction of remuneration to working partners
in partnership firms is as follows:
1 On the first Rs. 6,00,000 of Rs. 3,00,000 or 90% of the book-

book-profit (or loss) profit, whichever is more.
2 On the balance of the 60% of book profit
book-profit
3.4 Employer contribution to NPS referred in section
80CCD [A.Y. 2025-26]
Section 36(1)(iva) of the Act allows deductions to employers for
contributions towards employee pension schemes, limited to 10%
of the employee’s salary. It is proposed to increase this limit to 14%
of the employee’s salary.
Section 80CCD(2) allows employees to claim deductions for pension
contributions made by the Central Government, State Government,
or other employers which is, currently, capped at 10% of
salary for contributions by non-government employers. It is proposed
to increase this limit to 14% for cases where the employee’s salary is
taxable under section 115BAC(1A) of the Act.
These amendments aim to encourage higher contributions to
pension schemes by both employers and employees, thereby
enhancing retirement benefits while aligning with current tax
structures.

9
4. Capital Gain
4.1 Change in Holding Period of Capital Assets [w.e.f.
23.07.2024]
Currently, the holding periods for determining capital gains are 12
months, 24 months, and 36 months. It is proposed to simplify this to
just 12 months and 24 months which is as follows:-
Capital Asset Present Proposed Effective
Holding Holding from
Period Period
Listed security (other 12 Months No Change NA
than a unit) or a unit
of the UTI or a unit
of an equity oriented
fund or a zero coupon
bond
Other Listed Securities 36 Months 12 Months 23.07.2024
Unlisted shares and 24 Months No Change NA
immovable property
Other Assets 36 Months 24 Months 23.07.2024
4.2 Change in Rates of STCG and LTCG [w.e.f. 23.07.2024]

Changes in Short-term Capital Gains:
Capital Gains Present Rate Proposed Effective

Rate from
Short-term capital 15% 20% 23.07.2024
gains on equity
shares, units of equity
oriented mutual fund
and unit of a business
trust on which STT
paid
Other short-term Applicable No Change NA
capital gains Rate

10
Changes in Long-term Capital Gains:
Capital Gains Present Rate Proposed Effective

Rate from
Long-term capital gains 10% 12.5% 23.07.2024
on listed equity shares,
units of equity-oriented
fund and business trust
on which STT paid
(Note)
on unlisted securities
or shares of a company
not being a company
in which the public are
substantially interested
computed without
giving effect to the first
and second proviso to
section 48 by a non-
resident.
Long-term capital 10% 12.5% 23.07.2024
gains referred to in
section 115E/115AD/
115AB/115A/115ACA
on Other Assets [not
being long-term capital
gains referred to in
clauses (33) and (36) of
section 10]
Note: Exemption of gains upto `1.25 lakh (aggregate) is proposed for
long-term capital gains under section 112A.
4.3 Removal of Benefit of Indexation of Cost [w.e.f.

23.07.2024]
In parallel with the rationalization of the LTCG rate to 12.5%, it is
proposed to remove the indexation benefit under the second proviso
to Section 48 for calculating long-term capital gains. This benefit is
currently available for property, gold, and other unlisted assets. The
removal is intended to simplify capital gains computation for both
taxpayers and tax administration.

11
4.4 Parity in taxation between resident and non-resident
assesses [w.e.f. 23.07.2024]
To ensure parity in taxation between residents and non-residents,
amendments are being made to Sections 115AD, 115AB, 115AC,
115ACA, and 115E to align the rates for long-term capital gains
proposed under Sections 112A and 112, as well as the short-term
capital gains rates proposed under Section 111A.
Additionally, consequential amendments are being made to Sections
196B and 196C to align the withholding tax provisions with these
proposed changes in capital gains tax rates.
4.5 Definition of Specified Mutual Fund u/s 50AA [AY
2026-27]
The Finance Act, 2023 introduced a special taxation regime under
Section 50AA, treating gains from Market Linked Debentures and
specified mutual funds as short-term capital gains regardless of the
holding period. This has impacted funds such as Exchange Traded
Funds (ETFs), Gold Mutual Funds, and Gold ETFs, which invest below
35% in equity shares, and created ambiguity for Fund-of-Funds
(FoFs) that invest in other instruments.
Now, it is proposed to amend the definition of “Specified Mutual
Fund” under Section 50AA to provide that a specified mutual fund
shall mean a mutual fund:
(a) a Mutual Fund by whatever name called, which invests more than
65% of its total proceeds in debt and money market instruments; or
(b) a fund which invests 65% or more of its total proceeds in units of
a fund referred to in sub-clause (a).
4.6 Transfer of a capital asset now be subject to capital
gains tax [AY 2025-26]
Section 47 of the Act excludes certain transactions from being
considered a transfer for capital gains tax purposes under Section
45. Clause (iii) exempts transfers of capital assets under a gift, will, or
irrevocable trust, with an exception for specified ESOPs.
Despite the introduction of Section 50D and Section 50CA to address
valuation and anti-avoidance issues, disputes have arisen over
whether gifts of shares by companies are subject to capital gains tax
due to the current provisions of Section 47(iii). This has led to tax
12
avoidance and erosion of the tax base.
Now, it is proposed to amend Section 47(iii) and its proviso to specify
that the exemption applies only to transfers of capital assets by
individuals or Hindu Undivided Families (HUFs) under a gift, will,
or irrevocable trust. Transfers by entities such as companies will be
subject to capital gains tax.
4.7 Cost of Acquisition in case of equity shares sold
under OFS as part of IPO process [AY 2018-19]
Section 10(38) provided an exemption for long-term capital gains
on equity shares, units of equity-oriented funds, or units of business
trusts if the transaction was subject to Securities Transaction Tax
(STT). The Finance Act 2018 withdrew this exemption and introduce
Section 112A to tax long-term capital gains on such assets, provided
STT was paid both at acquisition and transfer.
The cost of acquisition of such shares u/s 55(2)(ac) is the higher of:
(a) Actual cost of acquisition
(b) lower of: Fair Market Value (FMV) of shares as of 31st January
2018; and Full value of Consideration received upon sale.
For equity shares not listed on 31.01.2018 but listed on the date
of transfer, the FMV is calculated proportionally based on the Cost
Inflation Index for the financial year 2017-18.
The introduction of Section 112A(4) relaxed the requirement of STT
payment at acquisition for certain transactions, leading to a lacuna
in calculating the cost of acquisition for shares acquired through
Offer-for-Sale (OFS) during an Initial Public Offering (IPO), where STT
is paid at transfer but shares are unlisted at that time.
Now, it is proposed to amend the Explanation to Section 55(2)(ac)
to clarify that for unlisted equity shares sold under an OFS included
in an IPO, the FMV for shares that were unlisted on 31.01.2018, but
listed on the transfer date, should be determined using the same
proportionate method based on the Cost Inflation Index for the
relevant years.

13
4.8 Capital Gains on Buy-back of Shares [w.e.f.
01.10.2024]
It is proposed that payments made by a domestic company to buy
back its own shares will be treated as dividends under Section 2(22)
(f) in the hands of the shareholders receiving the buy-back proceeds,
and taxed accordingly. No deduction for expenses will be allowed
against this dividend income.
For shares bought back, the cost of acquisition will be considered
to generate a capital loss, as these shares are deemed to be
extinguished. Shareholders will be entitled to claim their original
cost of acquisition (i.e., the cost of both bought-back shares and any
remaining shares) for calculating capital gains on subsequent sales.
The capital loss from the buy-back will be computed as follows:
(i) deeming value of consideration of shares under buy-back (for
purposes of computing capital loss) as nil;
(ii) allowing capital loss on buy-back, computed as value of
consideration (nil) less cost of acquisition;
(iii) allowing the carry forward of this as capital loss, which may
subsequently be set-off against consideration received on sale
and thereby reduce the capital gains to this extent.
To implement this, a proviso is proposed to be added to Section 46A,
stating that the value of consideration for shares bought back, as
referred to in Section 2(22)(f), shall be deemed to be nil.

14
5. Other Sources
5.1 Abolition of Angel Tax [A Y 2025-26]
The Angel tax was imposed in Finance Act 2012 whereby tax was
imposed on a company, not being a company in which the public
are substantially interested, receives, in any previous year, from any
person being a resident, any consideration for issue of shares and if
the consideration received for issue of Shares exceeds Fair Market
Value. The excess consideration over fair market value was taxable
under “Income from other sources”.
It implies that the shares issued by Indian company at premium
should not be issued more than FMV otherwise the difference in
taxable in the hands of company. This provision was applicable for
shares issued to residents earlier and then extended to non-residents
as well. Now, the same provision is proposed to be deleted for both
cases.
5.2 Tax on distributed income of domestic company for
buy-back of shares [w.e.f 1.10.2024]
The Finance Act 2013 introduced a tax on distributed income from
buybacks by domestic companies, similar to the dividend distribution
tax (DDT). Before the Finance Act 2020, companies paid DDT on
distributed profits as per section 115O in addition to regular income
tax. The Finance Act 2020 abolished Section 115O and dividend
become taxable in the hands of shareholders w.e.f. 1.4.2020. After
that the company is liable to pay tax @20% under section 115QA on
buy back. But, the shareholder cannot take the benefit of the cost of
the shares which has been bought back.
Now, It is proposed that buyback payouts to be taxed in the hands
of recipients as income from other sources, similar to dividends. The
payment made by a domestic company for buying back its shares
should be treated as a dividend for the shareholders and taxed at
applicable rates. Shareholders cannot deduct expenses against this
dividend income. The cost of acquisition for the bought-back shares
will result in a capital loss for shareholders which can be set off
against capital gains.

15
Example :
100 shares bought in 2020 @Rs. 40/- per share
Total cost of acquisition Rs. 4000/-
20 shares bought back in 2024 @Rs. 60/- per share
Income taxable as deemed dividend Rs. 1200/-
Capital loss on such buyback (Rs. 40 *20) Rs. 800/-
50 Shares sold in 2025 @Rs. 70 per share
Capital Gain (3500 – 2000) Rs. 1500
Chargeable capital gain after set off Rs. 700

16
6. International Taxation
6.1 Tax incentives to IFSC [A Y 2025-26]
Following tax incentives has been given for units of International
Financial Services Centre (IFSC):-
(A) Explanation to section 10(4D) has been amended to expand
the ambit of specified funds which can claim exemption under
the said section, to include retail funds and Exchange Traded
Funds (ETFs) in IFSC. Specified funds shall now include funds
established or incorporated in India in the form of a trust or a
company or a limited liability partnership or a body corporate,
which have been granted a certificate as a retail scheme or an
Exchange Traded Fund and are regulated.
(B) Specified income of Core Settlement Guarantee Funds set up
by recognised clearing corporations in IFSC, is proposed to be
exempted by amending the definition of “recognised clearing
corporation”
(C) As per Section 68 of the Act, the assessee has to provide the
source of funds to the AO. But, this additional onus of proof of
satisfactorily explaining the source in the hands of the creditor,
would not apply if the creditor is a well regulated entity, i.e., it is
a Venture Capital Fund (VCF) or Venture Capital Company (VCC)
registered with SEBI.
` Now, it is proposed to extend the relaxation to those VCFs which
are regulated by IFSCA.
(D) Section 94B of the Act, relating to thin capitalisation, do not
apply to Indian companies or permanent establishments
of foreign companies which are engaged in the business of
banking or insurance or such class of NBFCs as may be notified
by the Central Government.
It is now proposed that the provisions of this section shall
also not apply to finance companies, located in IFSC, which
satisfy such conditions and carry on such activities as may be
prescribed.

17
6.2 Promotion of domestic cruise ship operations by
non-residents [A Y 2025-26]
In order to promote the cruise-shipping industry in India, the
following is proposed:-
1. A presumptive taxation regime is being put in place for a non-
resident, engaged in the business of operation of cruise ships,
alongwith exemption to income of a foreign company from
lease rentals, if such foreign company and the non-resident
cruise ship operator have the same holding company.
2. New section 44BBC has been inserted which deems (Presumptive
income) 20% of the aggregate amount received/ receivable by,
or paid/ payable to, the non-resident cruise-ship operator, on
account of the carriage of passengers, as profits and gains of
such cruise-ship operator from this business. This is applicable
to only a foreign company.
3. Moreover, as per section 10(15B), the lease rentals paid by the
above company which opts for presumptive regime u/s 44BBC,
shall be exempt in the hands of the recipient company (second
non-resident company), if both companies are subsidiaries of
the same holding company.
6.3 Abolishment Equalisation Levy in certain cases
[w.e.f. 1.08.2024]
Finance Act 2020 imposed equalization levy (EL) of 2% on the
amount of consideration received/ receivable by an e-commerce
operator from e-commerce supply or services. It is
proposed that the said provision shall not be applicable to
consideration received or receivable for e-commerce supply or
services, on or after the 1st day of August, 2024.
6.4 Non-reporting of Foreign Assets in the ITR [w.e.f.
1.10.2024]
Section 42 and 43 of the Black Money Act provides for penalty for
non-disclosure or wrong disclosure of foreign income and assets in
the ITR by a resident assessee other than not ordinarily resident in
India.

18
In such a case of default, a penalty of an amount of Rs. 10 lakhs
regardless of the value of asset located outside India may be levied
on the assessee.
Further, penalty was not applicable in respect of an asset, being one
or more bank accounts having an aggregate balance which does
not exceed a value equivalent to Rs. 5 lakhs at any time during the
previous year.
It is proposed to amend the provisos to sections 42 and 43 of the
Black Money Act to provide that the provisions of the said sections
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 Rs. 20 lakhs.
Hence, penalty cannot be levied for non-disclosure of all assets other
than immovable property (but including ESOPs, Shares and bank
accounts) having the value upto Rs. 20 lakhs.
6.5 Submission of statement by liaison office in India
[w.e.f. 01.04.2025]
A non-resident having a liaison office in India, is required to prepare
and deliver a statement in respect of its activities in a financial year
to the Assessing Officer within 60 days from the end of such financial
year under section 285 of the Act. But, there is no penalty prescribed
for late filling.
Now, it is proposed that failure to furnish statement may attract a
penalty u/s 271GC of
- Rs. 1,000 for every day for which the failure continues, if the period
of failure does not exceed three months; and
- Rs. 1,00,000 in any other case.
However, as per Section 273B, this penalty shall not be leviable if the
assessee proves that there was reasonable cause for the said failure.
6.6 Rationalization of TP Provision in case of SDT [A Y
2025-26]
Like International Transaction, now TPO has power to determine the
ALP of all SDT transaction which have not been referred to TPO by
the AO and/or in whose respect audit report under section 92CE has
not been filed.

19
6.7 Amendments related to Advance Rulings [w.e.f.
1.10.2024]
The Finance Act, 2021 provided that the Authority for Advance
Rulings shall cease to operate with effect from such date, as may
be notified by the Central Government in the Official Gazette i.e.
September 01, 2021 and new Board for Advance Rulings (BAR) has
been constituted. All the pending application before AAR has been
transferred to BAR.
As per earlier law, an applicant may withdraw an application within
30 days from the date on which such application is made before AAR.
But, the new law does not specify the procedure of withdrawal of
application which are transferred before BAR from AAR.
Now, it is proposed to amend section 245Q to allow application
for withdrawal by the 31st of October, 2024 for the transferred
applications before BAR (from AAR). It is further proposed to provide
that on receipt of such an application, the BAR may, by an order,
reject the application of withdrawn on or before the 31st day of
December, 2024.
6.8 Penalty u/s section 271FAA[w.e.f. 1.10.2024]
The existing provisions of section 271FAA of the Act levies penalty
of Rs. 50,000 on the specified person for furnishing inaccurate
statement of the financial transactions / reportable account as
prescribed under section 285BA of the Act.
A clarificatory amendment has been proposed in section 271FAA to
provide that penalty under the said section shall be attracted in any
of the following circumstances–
(i) furnishing inaccurate information in the statement shall be liable;
(ii) failure to comply with due diligence requirement in the statement;
However, in section 273B, it is proposed to include section 271FAA
in order to provide that no penalty shall be imposable for any failure
referred to in the said section, if the assessee proves that there was
reasonable cause for such failure.

20
6.9 Amendment to include the reference of Black Money
Act for obtaining a tax clearance certificate [w.e.f.
1.10.2024]
For obtaining Tax Clearance Certificate by a person who is domiciled
in India and want to leave India, the income-tax authorities should
also see the liability pending under Black Money Act also apart
from the liabilities under Income-tax Act, 1961, or the Wealth-tax
Act, 1957 (27 of 1957), or the Gift-tax Act, 1958 (18 of 1958), or the
Expenditure-tax Act, 1987 (35 of 1987)
6.10 TDS deducted abroad is income [A Y 2025-26]
Section 198 of the Act provides that tax deducted at source should
be regarded as income received for the purpose of computation
of income in India. There is no specific mention of Tax deducted at
foreign country.
Now, it is proposed to amend section 198, to provide that all sums
deducted in accordance with the provisions of Chapter XVII-B and
income tax paid outside India by way of deduction, in respect of
which an assessee is allowed a credit against the tax payable under
the Act, are for the purpose of computing the income of the assessee,
deemed to be income received.

21
7. Charitable Trust
7.1 Rationalization of the provisions of Charitable Trusts
[w.e.f. 1.10.2024]
Merger of Trusts under First Regime with Second Regime
There are two main regimes for trusts or institutions to claim tax
exemption. First regime are as per Provisions in section 10(23C)(iv),
(v), (vi), (via) and Second regime are as per Provisions in sections 11
to 13. Both regimes offer similar benefits and have been aligned over
the years. To simplify procedures and reduce administrative burden,
it is proposed to phase out the first regime and transition trusts to the
second regime gradually.
It is proposed that applications for approval under the first regime
[section 10(23C)(iv), (v), (vi), (via)] filed on or after 1.10.2024, will not
be considered. Applications filed before 1.10.2024, will be processed
under the current first regime rules. Approved trusts will continue to
enjoy exemptions under the first regime until their current approval
expires. These trusts can later apply for registration under the second
regime. Eligible investment modes under the first regime will be
protected in the second regime via amendments to section 13.
7.2 Condonation of delay in filing application for
registration u/s Section 12AB [w.e.f. 1.10.2024]
Trusts or institutions seeking registration under section 12AB must
apply within the timelines specified in section 12A(1)(ac). Sometimes,
trusts or institutions cannot file the application on time. If they miss
the deadline, they may face taxes on accreted income and could
permanently lose their exemption status. It is proposed that the
PCIT/CIT be allowed to condone the delay if there is a reasonable
cause, treating the application as filed on time.

22
7.3 Timelines for disposing applications for registration
u/s 12AB or u/s 80G [w.e.f. 1.10.2024]
Section Old Time Limit for Disposal New Time Limit w.e.f.
of application by Tax 1-Oct-2024 for Disposal
Department filed by assessee of application by Tax
Department filed by assessee
Under Section within a period of six months Within a period of six months
12AB from the end of the month from the end of the quarter
in which the application was
received.
Under Section within a period of six months Within a period of six months
80G from the end of the month from the end of the quarter
in which the application was
received.
7.4 Merger of trusts under the exemption regime with

other trusts – Section 12AC [w.e.f. 1.4.2025]
When a trust or institution approved or registered under either the
first or second regime merges with another approved or registered
entity under either regime, it may be subject to Chapter XII-EB, which
deals with tax on accreted income under specific circumstances.
It is proposed that such mergers will not attract any tax u/s 12AC if
following conditions are fulfilled:-
(a) the other trust or institution has same or similar objects;
(b) the other trust or institution is registered under section 12AA or
12AB or approved under 10(23C), as the case may be; and
(c) the said merger fulfils such conditions as may be prescribed.

23
8. Tax Administration and
Compliance
8.1 Introduction of block assessment provisions in
cases of search under section 132 and requisition
under section 132A [w.e.f. 01.09.2024]
The Finance Act 2021 amended sections 153A and 153C of the Act to
apply only to search and seizure proceedings u/s 132 or requisition u/s
132A initiated on or before 31.03.2021. It abolished the separate regime
for search assessments, merging them into the reassessment provisions.
Additionally, sections 147, 148, 149, 151, and 151A were amended to
allow the issuance of notices under section 148 if search or survey or
requisition occurred on or after 01.04.2021, suggesting that income has
escaped assessment for the three assessment years preceding the relevant
assessment year. Notices can be issued within ten years if the escaping
income is ₹50 lakh or more, represented in the form of assets.
To address inefficiencies in the current search assessment process and to
make the procedure of assessment of search cases cost- effective, efficient
and meaningful, the block assessment scheme will be introduced for
searches or requisition initiated on or after 01.09.2024.
Key features include:
1. Block Period: Consists of the six assessment years preceding the year
in which the search was initiated or any requisition was made and
includes the period from April 1 of the search or requisition year until
the last authorization date.
2. Consolidated Assessment: Regular assessments for the block period
will abate, and a single consolidated assessment will be conducted. No
further assessments or reassessments will occur for this period until
the block assessment is complete.
3. Undisclosed Income: Total income will include undisclosed income,
which shall include any money, bullion, jewellery or other valuable
article or thing or any expenditure or any income based on any entry
in the books of account or other documents or transactions, where
such money, bullion, jewellery,

24
valuable article, thing, entry in the books of account or other document or
transaction represents wholly or partly income or property which has not
been or would not have been disclosed for the purposes of this Act, or any
expense, deduction or allowance claimed under this Act which is found to
be incorrect.
4. Taxation: Tax will be levied at 60% on block period income, with no
surcharge currently proposed. Interest under sections 234A, 234B, or
234C and penalties under section 270A will not apply.
5. Penalty: Penalty on undisclosed income will be 50% of the tax payable.
No penalty if the undisclosed income is disclosed and tax paid in the
return.
6. Time Limit: Block assessments must be completed within 12 months
from the end of the month in which the last search or requisition
authorization was executed or made. For other persons, the limit is 12
months from the notice issuance under section 158BC. However, an
exclusion of nearly six months shall be available in respect of period
from date of search to the date of handing over of seized material to
the Assessing Officer.
7. Exclusions: Evidence related to international or specified domestic
transactions, pertaining to the period beginning from the 1st day
of April of the previous year in which last of the authorisations was
executed and ending with the date on which last of the authorisations
was executed, will not be included in the block assessment and will be
considered separately.
8. Approval and Procedure: Notices and assessment orders will require
approval from the Additional Commissioner or the Additional Director
or the Joint Commissioner or the Joint Director and section 144C will
not apply.
The main objectives for the introduction of this scheme are early
finalization of search assessments, coordinated investigation during
search assessments and reduction in multiplicity of proceedings.
8.2 Rationalisation of provisions relating to assessment
and reassessment under the Act [w.e.f. 01.09.2024]
The Finance Act, 2021 introduced significant changes to the procedure
for assessment and reassessment of income, effective from 01.04.2021.
The amendments involve modifications to sections 148 and 149, and the

25
introduction of a new section 148A.
Due to extensive litigation caused by multiple interpretations of existing
reassessment provisions, and requests to shorten notice issuance timelines,
it is proposed to streamline the reassessment procedures. The proposed
amendments are as follows:
1. Amendment to Section 148:
Notice Requirement: Before proceeding with assessment, reassessment, or
recomputation under section 147, the Assessing Officer (AO) must issue
a notice under section 148. This notice must include a copy of the order
passed under section 148A(3) and provide a period of up to three months
for the assessee to file a return.
Information Requirement: A notice under section 148 cannot be issued
without specific information suggesting that income has escaped
assessment.
Information Sources: Information from surveys conducted under section
133A (excluding section 133A(2A)) on or after 01.09.2024, will be
considered valid for suggesting escaped income.
Approval Requirement: If information is received under section 135A, prior
approval from a specified authority is required before issuing a notice
under section 148.
2. Amendment to Section 148A:
Opportunity to be Heard: Before issuing a notice under section 148, the
AO must provide the assessee with an opportunity to be heard by issuing
a notice to show cause, along with the information suggesting escaped
income. The assessee can respond within a specified time frame.
Order Determination: Based on the assessee’s reply and available records,
the AO will pass an order with prior approval from a specified authority to
decide if issuing a notice under section 148 is warranted.
Exclusions: This procedure does not apply if information is received under
section 135A.
Time Limits for Notices:
Normal Cases: Notices under section 148A cannot be issued if three years
have passed since the end of the relevant assessment year.

26
Notices under section 148 cannot be issued if three years and three months
have passed, except in specific cases.
Specific Cases: Notices under section 148A can be issued up to five years
from the end of the relevant assessment year if the escaped income is `50
lakh or more.
Notices under section 148 can be issued up to five years and three months
if there is evidence of escaped income of `50 lakh or more.
Specified Authorities: For issuing notices under sections 148 and 148A,
the specified authorities will be the Additional Commissioner, Additional
Director, Joint Commissioner, or Joint Director.
Transitional Provisions: For searches, requisitions, or surveys initiated
between 01.04.2021, and 01.09.2024, the provisions of sections 147 to 151
will apply as they were before the Finance (No. 2) Act, 2024.
Pre-September 1, 2024 Assessments: Assessments, reassessments, or
recomputations where notices or orders were issued before 01.09.2024,
will follow the pre-amendment provisions of sections 147 to 151.
8.3 Amendment in provisions relating to set off and
withholding of refunds [w.e.f. 01.10.2024]
Section 245 of the Income-tax Act, as amended by the Finance Act, 2013,
authorizes various tax authorities—including the Assessing Officer,
Commissioner, Principal Commissioner, Chief Commissioner, and Principal
Chief Commissioner—to adjust or withhold a tax refund against any
outstanding tax demands. If a refund is due but assessment or reassessment
proceedings are pending, the Assessing Officer, with approval from the
Principal Commissioner or Commissioner of Income-tax, can withhold
the refund if it is deemed that granting it might adversely affect revenue.
During this period, no additional interest on the withheld refund is payable
under section 244A of the Act.
The provision requires the Assessing Officer to meet two conditions: form
an opinion that granting the refund could negatively impact revenue,
and record the reasons for this decision in writing. The necessity to record
reasons ensures that the opinion is well-documented and justified. The
phrase “is of the opinion that the grant of refund is likely to adversely
affect the revenue” will be retained, along with the requirement to record
27
reasons and obtain prior approval from the Principal Commissioner or
Commissioner of Income-tax.
To address the current limitation of withholding refunds only up to the
date of assessment/reassessment, it is proposed to extend this period to
sixty days from the date of assessment or reassessment. This extension also
necessitates a consequential amendment to section 244A to ensure that
no additional interest is paid on refunds withheld for this extended period.
8.4 Rationalisation of the time-limit for filing appeals to
the Income Tax Appellate Tribunal [w.e.f. 01.10.2024]
Section 253 of the Income-tax Act outlines the procedure for filing an
appeal with the Income Tax Appellate Tribunal (ITAT) against orders from
various tax authorities, including the Joint Commissioner of Income-tax
(Appeals) and the Commissioner of Income-tax (Appeals) (CIT(A)). The
ITAT serves as the second appellate authority in the income tax appellate
process.
Currently, Section 253(1) specifies the types of orders that can be appealed
to the ITAT. Clause (a) allows appeals against orders passed by Deputy
Commissioners (Appeals) or Commissioners (Appeals) under various
sections of the Act. However, it does not include references to penalties
under section 158BFA, which deals with penalties for undisclosed income
following a search. To address this oversight, it is proposed to amend
clause (a) to include section 158BFA, thereby enabling appeals against
such penalty orders.
Additionally, Section 253(3) requires appeals to the ITAT to be filed within
sixty days of the communication of the order to the assessee or the
Principal Commissioner or Commissioner. With the advent of the Faceless
Appeal system, where orders are uploaded daily by the CIT (Appeals) rather
than being sent in bulk, tracking the communication dates has become
challenging. To simplify this, it is proposed to amend section 253(3) to allow
appeals to be filed within two months from the end of the month in which
the order is communicated the assessee or to the Principal Commissioner
or Commissioner, as the case may be, aligning with the new electronic
communication practices.
8.5 Amendments in sections 245Q and 245R related to
Advance Rulings [w.e.f. 01.10.2024]
The Finance Act, 2021, introduced amendments to Chapter XIX-B of the

28
Income-tax Act, which governs Advance Rulings. This act resulted in the
discontinuation of the Authority for Advance Rulings (AAR) effective
01.09.2021, with the Central Government subsequently establishing the
Board for Advance Rulings (BAR). The new sections under Chapter XIX-B
detail the powers and procedures for the BAR.
Section 245Q(3) permits applicants to withdraw their advance ruling
applications within thirty days of submission. Following the AAR’s
dissolution, some pending applications were transferred to the BAR.
However, the thirty-day withdrawal period had already passed for these
applications. Given the delay and changes in the ruling process, many
applicants have requested to withdraw their pending applications due to
concerns such as the transition to the BAR, the non-binding nature of the
new rulings, and the substantial time elapsed.
To address these concerns, it is proposed to amend section 245Q to allow
withdrawal of applications transferred to the BAR by 31.10.2024, provided
that no order under section 245R(2) has been issued. Furthermore, the
amendment will enable the BAR to reject such applications as withdrawn
by 31.12.2024, upon receipt of the withdrawal request.
8.6 Powers of the Commissioner (Appeals) in the case
of Best Judgement Cases [w.e.f. 01.10.2024]
Section 251 of the Income-tax Act outlines the powers of the Joint
Commissioner (Appeals) and
Commissioner (Appeals). Specifically, sub-section (1) grants the
Commissioner (Appeals) authority to confirm, reduce, enhance, or annul
assessments and to confirm, cancel, or vary penalty orders. Additionally,
section 250(4) allows the Commissioner (Appeals) to seek reports from the
Assessing Officer after conducting further inquiries before disposing of an
appeal.
It has been observed that in cases where assessments are made under
best judgment provisions (section 144), taxpayers often do not respond
to notices from the Faceless Assessing Officer and directly file appeals
with the Commissioner (Appeals). To address the significant backlog of
appeals and disputed tax demands at this stage, it is proposed to grant the
Commissioner (Appeals) the power to set aside such assessments and refer
the case back to the Assessing Officer for a fresh assessment. This change
aims to improve the handling of best judgment cases and ensure that
assessments are conducted fairly.

29
Consequently, amendments to section 153(3) are also proposed to establish
a time limit for the disposal of cases that are set aside by the Commissioner
(Appeals). These provisions will apply to appellate orders issued by the
Commissioner (Appeals) on or after October 1, 2024.
8.7 Rationalisation of provisions related to time-limit
for completion of assessment, reassessment and
recomputation [w.e.f. 01.10.2024]
The existing provisions of section 153 of the Act specify the various time-
limits for completion of assessment, reassessment and recomputation
under various provisions of the Act. The following amendments are
proposed to remove the procedural difficulties in implementation of the
provisions of the said section:
1. Assessment Orders for Returns Post-Section 119(2)(b): Currently,
section 153(1) mandates that assessments under sections 143 or 144
be completed within twelve months from the end of the assessment
year. A new sub-section (1B) is proposed to address cases where returns
are filed following an order under section 119(2)(b). This amendment
will allow such assessments to be completed within twelve months
from the end of the financial year in which the return is furnished.
2. Time Limits for Fresh Assessments: Currently, Section 153(3) provides
the time-limit for passing the fresh assessment order in pursuance of
an order under section 254 or section 263 or section 264
setting aside or cancelling an assessment and assessment order shall
be passed at any time before the expiry of twelve months from the end
of the financial year in which the order under section 250 or section 254
is received by the Principal Chief Commissioner or Chief Commissioner
or Principal Commissioner or Commissioner or, as the case may be, the
order under section 263 or section 264 is passed by the Principal Chief
Commissioner or Chief Commissioner or Principal Commissioner or
Commissioner, as the case may be.
In this regard, it is proposed to amend this sub-section to explicitly
include references to section 250, which deals with appeals. This
change will provide a clear time limit for the disposal of cases where
assessments are set aside by the Commissioner (Appeals).
3. Timeline for Revived Assessments: Currently, Section 153(8) states
that assessments or reassessments revived under section 153A must

30
be completed within one year from the end of the month of revival or
within the time frame specified in section 153B, whichever is later.
In this regard, it is proposed to amend the said sub-section to provide
the timeline for passing of order in the case of revived assessment or
reassessment proceedings as a consequence of annulment of block
assessments under Chapter XIV-B of the Act.
4. Exclusion of Search Period in Limitation: Explanation 1(xii) to Section
153 excludes the period from the initiation of a search to the handover
of seized materials (up to 180 days) when computing the limitation
period. In this regard, a new 6th proviso is proposed to provide that
the date of limitation in such cases falls at the end of the month, after
taking into account the exclusion provided in the Explanation.
Further, the existing provisions of section 139 of the Income-tax Act
require every company, firm, or being a person other than a company
or a firm whose total income exceeds the maximum amount not
chargeable to tax to furnish a return of income. To address the
situation where returns are filed following an order under 119(2)(b), a
consequential amendment is proposed to section 139. This amendment
will ensure that the requirements of section 139 also apply to returns
filed in compliance with such orders under section 119(2)(b).

31
9. Penalty
9.1 Penalty for failure to furnish statements [w.e.f.
1.4.2025]
Section 271H of the Act inter alia relates to penalty for failure to file
TDS or TCS returns/ statements within the due date.
It is proposed to amend section 271H(3) to provide that no penalty
shall be levied if the person proves that after paying TDS/ TCS along
with fees and interest to the credit of the Central Government, he
has filed the TDS/TCS statement before the expiry of period of one
month from the time prescribed for furnishing such statement.

32
10. Tax Deduction at Source
10.1 Rationalisation of Tax Deducted at Source rates:
To enhance ease of doing business and improve taxpayer compliance,
it is proposed to reduce the various TDS rates, which currently range
from 0.1% to 30% and above. The proposed changes in TDS rates are
as follows:-
Rationalisation of TDS rates is proposed as below:-
Section Present Proposed With effect
TDS Rate TDS Rate from
Section 194D - Payment of insurance 5% 2% 1.04.2025
commission
(in case of person other than
company)
Section 194DA - Payment in respect 5% 2% 1.10.2024
of life insurance policy
Section 194G – Commission etc. on 5% 2% 1.10.2024
sale of lottery tickets
Section 194H - Payment of 5% 2% 1.10.2024
commission or brokerage
Section 194-IB - Payment of rent by 5% 2% 1.10.2024
certain individuals or HUF
Section 194M - Payment of certain 5% 2% 1.10.2024
sums by certain individuals or Hindu
undivided family
Section 194-O - Payment of certain 1% 0.1% 1.10.2024
sums by e-commerce operator to
e-commerce participant
Section 194F relating to payments Proposed 1.10.2024
on account of repurchase of units by to be
Mutual Fund or Unit Trust of India omitted
10.2 Ease in claiming credit for TCS collected/TDS

deducted by salaried employees [w.e.f. 01.10.2024]
Section 192 of the Act mandates tax deduction at source on salary
income. Section 192(2B) allows for the consideration of income
under other heads and any tax deducted thereon when computing
salary tax deductions, subject to certain conditions.

33
Tax Collected at Source (TCS) was not considered when computing
tax deductions on salary which impacts the cash flow issues for
employees. It was long pending demand that all TDS and TCS should
also be accounted for in this calculation of TDS under the head Salary.
Now, it is proposed to amend Section 192(2B) to include any tax
deducted or collected under Chapter XVII-B or Chapter XVII-BB. This
change will allow such taxes to be considered when computing
the tax to be deducted from salary income, easing compliance and
improving cash flow management for employees.
10.3 Alignment of interest rates for late payment to
Government account of TCS [w.e.f. 01.04.2025]
Section 206C of the Act mandates the collection of tax at source (TCS)
on transactions such as trading in alcoholic liquor, forest produce,
and scrap. Section 206C(7) specifies that if a person fails to collect
tax or, after collection, fails to deposit it to the Central Government,
they are liable to pay simple interest at the rate of 1% per month or
part thereof on the amount from when the tax was collectible until
it is paid.
Currently, the interest rates for late payment of TCS are lower
compared to those for late deduction or deposit of TDS under Section
201(1A), which imposes a higher interest rate of 1.5% per month due
to the more severe consequences of non-compliance. This disparity
also impacts those liable for TCS.
To align the interest rates with TDS provisions and address
this discrepancy, it is proposed to amend Section 206C(7). The
amendment will increase the interest rate from 1% to 1.5% per
month or part thereof for non-payment of TCS to the Government
account, from the date of collection until the tax is actually paid.
10.4 Claiming credit for TCS of minor in the hands of
parent [w.e.f. 01.01.2025]
Section 206C of the Act provides for the collection of tax at source
(TCS) on transactions involving the trading of alcoholic liquor, forest
produce, scrap, etc. Currently, there is no provision allowing the
credit of TCS to any person other than the collectee.

34
For example, under the Liberalized Remittance Scheme of the
Reserve Bank of India, funds remitted in the name of a minor, TCS has
been collected u/s 206C(1G) in the name of minor. However, there is
no provision for the minor’s parent to claim this TCS credit in their
tax return.
Now, it is proposed to amend Section 206C to enable the CBDT to
notify rules for situations where TCS credits can be transferred to a
person other than the collectee. To prevent misuse of this provision,
the credit of TCS for a minor will only be allowed if the minor’s income
is clubbed with the parent’s income as per Section 64(1A) of the Act.
This section mandates the inclusion of a minor child’s income in the
total income of the parent for tax purposes.
10.5 TDS on payment by partnership firm to partners
[w.e.f. 01.04.2025]
Currently, there is no provision for TDS on payments such as salary,
remuneration, interest, bonus, or commission made to partners by a
partnership firm.
It is proposed to introduce a new section 194T which will mandate
TDS on such payments at the time of credit or payment whichever
earlier.
Payments Covered: Salary, remuneration, commission, bonus, and
interest paid to any account (including capital account) of a partner.
Threshold: TDS will apply if the aggregate payments exceed `20,000
in a financial year.
TDS Rate: 10%
Time of Deduction: At the time of credit of such sum to the account of
the partner (including the capital account) or at the time of payment
thereof, whichever is earlier
This amendment aims to streamline tax compliance for partnership
firms and ensure that appropriate taxes are deducted on payments
to partners.

35
10.6 TCS at the rate of 1% on Luxury Goods [w.e.f.
01.01.2025]
Currently, Section 206C(1F) of the Act mandates that sellers collect
TCS at 1% on the sale of motor vehicles valued over `10 lakh.
It is proposed to amend Section 206C(1F) to extend TCS to other goods
exceeding `10 lakh in value. The Central Government will notify
which luxury goods will fall under this provision. This amendment
aims to improve the monitoring of high-value purchases by high net
worth individuals.
10.7 TDS on Sale of Immovable Property [w.e.f. 01.10.2024]
Section 194-IA of the Act requires tax deduction at source (TDS) on
the transfer of immovable property (excluding agricultural land).
Specifically:
Section 194-IA(1): Requires TDS at 1% of the higher of the sale
consideration or stamp duty value of the property when making
payments to a resident for the transfer.
Section 194-IA(2): Provides an exemption from TDS if both the
consideration and the stamp duty value are below `50 lakh. Few
taxpayers have interpreted that the `50 lakh threshold applies to
each individual buyer’s payment rather than the total consideration
for the property. As a result, TDS may not be deducted if the amount
paid by each buyer is less than `50 lakh, even if the total consideration
and stamp duty value exceed `50 lakh.
To clarify the legislative intent, it is proposed to amend Section
194-IA(2) to specify that when there is more than one transferor
or transferee, the `50 lakh threshold applies to the aggregate of
amounts paid or payable by all transferees to the transferor, or all
transferors for the immovable property.
10.8 TDS on Floating Rate Savings (Taxable) Bonds
(FRSB) 2020 [w.e.f. 01.10.2024]
Section 193 of the Act governs the deduction of tax at source (TDS)
on interest payments made to residents on securities.
To align with new financial instruments and ensure proper tax
compliance, it is proposed to amend

36
Section 193 to include the following:
a. Floating Rate Savings Bonds (FRSB) 2020 (Taxable): TDS will be
applied to interest payments exceeding `10,000 on these bonds.
b. Other Specified Securities: TDS will also apply to interest payments
exceeding `10,000 on any other securities of the Central or State
Government, as specified by the Central Government through a
notification.
This amendment aims to ensure that TDS is effectively applied to
new types of securities and savings instruments.
10.9 Excluding sums paid under section 194J from section 194C
(Payments to Contractors) [w.e.f. 01.10.2024]
Currently, Section 194C of the Act mandates TDS on payments to
contractors at 1% for individual or HUF contractors and 2% for others.
Section 194J relates to TDS on fees for professional or technical
services, with rates of 2% or 10% depending on the type of payment.
There has been confusion where payments subject to TDS under
Section 194J are incorrectly being subjected to TDS under Section
194C. This issue arises because Section 194C’s definition of “work”
does not exclude payments that should be covered under Section
194J.
To address this, it is proposed to amend the Act to explicitly state
that payments covered under Section 194J(1) will not be considered
“work” for the purposes of TDS under Section 194C. This clarification
will help ensure that the appropriate TDS provisions are applied
based on the nature of the payment.
10.10 Widening ambit of section 200A of the Act [w.e.f.
01.04.2025]
Section 200A of the Act outlines the process for handling statements
of TDS and corrections made by the person deducting tax under
Section 200. Currently, this section primarily addresses statements
filed by deductors.
To improve the processing of statements filed by entities other than
deductors, such as exchanges filing Form No. 26QF, it is proposed
to amend Section 200A. The amendment will allow the Board to

37
establish a scheme for processing statements made by such entities.
This change aims to streamline the handling and processing of these
statements, ensuring better compliance and administration.
10.11 Extending the scope for lower TDS/TCS certificate
[w.e.f. 01.10.2024]
Section 197 allows for certificates for lower tax deduction rates on
eligible payments under Chapter XVII-B. Section 206C(9) provides for
lower tax collection rates under specified sections.
Section 194Q requires buyers to deduct tax at 0.1% on payments
exceeding `50 lakh to residents, while Section 206C(1H) requires
sellers to collect tax at 0.1% on receipts exceeding `50 lakh. The
deductee cannot obtain the lower deduction certificate in such
cases.
To address the issues and ease the compliance burden, the following
amendments are proposed:
a) It is proposed to amend Section 197 to include Section 194Q,
allowing for lower deduction certificates.
b) It is also proposed to amend Section 206C(9) to include Section
206C(1H), enabling lower collection certificates.
These changes aim to facilitate easier business operations and
reduce the compliance burden on taxpayers.
10.12 Notification of certain persons or class of persons
as exempt from TCS [w.e.f. 01.10.2024]
Section 206C of the Act provides for the collection of tax at source
on business of trading in alcoholic liquor, forest produce, scrap etc.
Entities whose income is exempt from taxation and who are not
required to file returns of income have raised concerns about
difficulties they face due to TCS on their transactions. These entities
currently have no provision for exemption from TCS, leading to
unnecessary tax collection and administrative burden.
It is therefore proposed to provide that no collection of tax shall be
made or that collection of tax shall be made at such lower rate in
respect of specified transaction, from such person or class of persons,
including institution, association or body or class of institutions,
associations or bodies, as may be notified by the Central Government

38
in the Official Gazette, in this behalf.
10.13 Time limit to file correction statement in respect of
TDS/ TCS statements [w.e.f. 01.04.2025]
Section 200 of the Act mandates that a person deducting tax must
pay the deducted tax to the Central Government and furnish detailed
TDS statements within a prescribed time. It also allows for the
submission of correction statements to rectify mistakes or update
information.
Similarly, Section 206C deals with TCS on various goods. It requires
the furnishing of detailed TCS statements and permits the delivery of
correction statements for mistakes or updates.
Currently, there is no time limit for furnishing correction statements,
potentially leading to indefinite revisions and misuse, causing
difficulties for deductees/collectees.
It is proposed to amend Section 200 and Section 206C(3B) to set
a six-year limit for delivering correction statements. No correction
statement would be accepted after six years from the end of the
financial year in which the original statement was delivered, ensuring
finality and reducing potential misuse.
10.14 Reducing time limitation for orders deeming any
person to be assessee in default [w.e.f. 01.04.2025]
Section 201 and Section 206C of the Act outline consequences for
failure to deduct or collect tax or for not paying the required tax.
Similarly, Section 206C(6A) addresses defaults in tax collection and
payment.
Currently, Section 201(3) provides a 7-year limit for orders related to
defaults in tax deduction when the payee is a resident, but no such
limit exists for defaults involving non-residents, creating uncertainty.
It is proposed to amend Section 201(3) and insert a new Section
206C(7A) to establish that no order can be made deeming a person
as an assessee in default for failure to deduct or collect tax after 6
years from the end of the financial year in which the payment was
made or credit given, or 2 years from the end of the financial year
in which the correction statement was delivered, whichever is later.

39
11. Miscellaneous Amendments
11.1 Adjusting liability under Black Money Act, 2015
against seized assets [w.e.f. 01.10.2024]
It is proposed to amend Section 132B to include liabilities arising
under the Black Money Act. This change will enable the recovery of
such liabilities from seized assets, aligning the treatment of these
liabilities with those under the other tax laws already covered by the
section.
11.2 Amendments to the Prohibition of Benami Property
Transactions Act, 1988:
(A) Amendment of Section 24 of the Prohibition of Benami Property
Transactions Act, 1988 [w.e.f. 01.10.2024]
Section 24 of the Prohibition of Benami Property Transactions (PBPT)
Act, 1988 relates to notice and attachment of property involved in
Benami transaction.
The following changes are proposed to Section 24 of the PBPT Act,
1988 to establish clearer timelines, improve efficiency, and ensure
timely case handling:
1. Time Limit for Responses:
`Currently, there is no specific time frame for a benamidar to respond to
the notice issued under sub-section (1) or for a beneficial owner
to file submissions based on the notice under sub-section (2).
To address this, it is proposed to insert a new sub-section (2A)
that establishes a maximum time limit of three months from the
end of the month in which the notice is issued for both parties to
submit their explanations or submissions.
2. Time Limit for Provisional Attachment Decisions:
The existing provisions of sub-sections (3) and (4) require the
Initiating Officer to make decisions on provisional attachment
within 90 days from the last day of the month in which the
notice under sub-section (1) is issued. The proposal is to extend
this period to four months from the end of the month in which

40
the notice is issued, allowing more time for thorough decision-
making.
3. Time Limit for Statement of the Case:
Currently, sub-section (5) mandates that the Initiating Officer must
prepare and refer the statement of the case to the Adjudicating
Authority within fifteen days from the date of the attachment
order. It is proposed to amend this to a period of one month from
the end of the month in which the attachment order is issued,
providing additional time for the preparation of the statement.
(B) Insertion of Section 55A in the Prohibition of Benami Property
Transactions Act, 1988 [w.e.f. 01.10.2024]
Under Section 53(2) of the Prohibition of Benami Property
Transactions Act (PBPT) Act, 1988, the penalty for benami transactions
is a rigorous imprisonment ranging from one to seven years, along
with a fine up to 25% of the fair market value of the benami property.
This penalty applies equally to benamidars, beneficial owners, and
anyone who abets the transaction. This uniform penalty often
discourages benamidars from providing evidence against beneficial
owners, particularly since many benamidars are poor and illiterate.
To address this issue, a new Section 55A is proposed to be inserted
into the PBPT Act. This section would allow the Initiating Officer,
with prior approval from the competent authority, to offer immunity
from penalties under Section 53 to a benamidar or any person who
provides full and truthful information about the benami transaction.
Acceptance of this immunity would protect the individual from
prosecution and penalties related to the transaction.
However, if the person granted immunity fails to comply with
the disclosure conditions, conceals information, or provides false
evidence, the immunity can be withdrawn. In such cases, the
individual can be prosecuted and penalized as if immunity had never
been granted.

41
12. Direct Tax Vivad se Vishwas
Scheme, 2024
12.1 Direct Tax Vivad Se Vishwas Scheme, 2024 will come
into force on such date as the Central Government
may by notification in the Official Gazette, appoint.
12.2 Few Definitions specified in the Scheme-
(a) “appellant” means—
i. a person in whose case an appeal or a writ petition or special
leave petition has been filed either by him or by the income-tax
authority or by both, before an appellate forum and such appeal
or petition is pending as on the specified date; or
ii. a person who has filed his objections before the Dispute
Resolution Panel under section 144C of the Income-tax Act and
the Dispute Resolution Panel has not issued any direction on or
before the specified date; ora person in whose case the Dispute
Resolution Panel has issued direction under sub-section (5) of
section 144C of the Income-tax Act and the Assessing Officer has
not completed the assessment under sub- section (13) of that
section on or before the specified date; or
iii. a person who has filed an application for revision under section
264 of the Income-tax Act and such application is pending as on
the specified date;
(b) “appellate forum” means the Supreme Court or the High Court or
the Income Tax Appellate Tribunal or the Commissioner (Appeals) or
Joint Commissioner (Appeals), as the case may be;
(c) “designated authority” means an officer not below the rank of
a Commissioner of Income-tax notified by the Principal Chief
Commissioner for the purposes of this Scheme;
(d) “disputed fee” means the fee determined under the provisions of
the Income-tax Act in respect of which appeal has been filed by the
appellant;

42
(e) “disputed income” in relation to an assessment year, means the
whole or so much of the total income as is relatable to the disputed
tax;
(f) “disputed interest” means the interest determined in any case under
the provisions of the Income-tax Act, where—
i. such interest is not charged or chargeable on disputed tax;
ii. an appeal has been filed by the appellant in respect of such
interest;
(g) “disputed penalty” means the penalty determined in any case under
the provisions of the Income-tax Act, where—
i. such penalty is not levied or leviable in respect of disputed
income or disputed tax, as the case may be;
ii. an appeal has been filed by the appellant in respect of such
penalty;
(h) “disputed tax”, in relation to an assessment year or financial year, as
the case may be, means the income-tax including surcharge and cess
(hereafter in this Chapter referred to as the amount of tax) payable
by the appellant under the provisions of the Income-tax Act, as
computed hereunder:—
(A) in a case where any appeal, writ petition or special leave petition
is pending before the appellate forum as on the specified date, the
amount of tax that is payable by the appellant if such appeal or writ
petition or special leave petition was to be decided against him;
(B) in a case where objection filed by the appellant is pending before the
Dispute Resolution Panel under section 144C of the Income-tax Act,
as on the specified date, the amount of tax payable by the appellant
if the Dispute Resolution Panel was to confirm the variation proposed
in the draft order;
(C) in a case where Dispute Resolution Panel has issued any direction
under section 144C(5) of the Income-tax Act, and the Assessing
Officer has not completed the assessment under section 144C(13)
on or before the specified date, the amount of tax payable by the
appellant as per the assessment order to be passed by the Assessing
Officer in pursuance of the said assessment under sub-section (13)
thereof;

43
(D) in a case where an application for revision under section 264 of the
Income-tax Act, is pending as on the specified date, the amount of
tax payable by the appellant if such application for revision was not
to be accepted:
Provided that in a case where the dispute in relation to an assessment
year relates to reduction of tax credit under section 115JAA or section
115JD of the Income-tax Act, or any loss or depreciation computed
thereunder, the appellant shall have an option either to include the
amount of tax related to such tax credit or loss or depreciation in the
amount of disputed tax, or to carry forward the reduced tax credit or
loss or depreciation, in such manner as may be prescribed.
(i) “tax arrear” means—
i. the aggregate amount of disputed tax, interest chargeable or
charged on such disputed tax, and penalty leviable or levied on
such disputed tax; or
ii. disputed interest; or
iii. disputed penalty; or
iv. disputed fee.
12.3 Amount payable by declarant
Subject to the provisions of this Scheme, where a declarant files under
the provisions of this Scheme on or before the last date, a declaration
to the designated authority in accordance with the provisions of
section 91 in respect of tax arrear, then, notwithstanding anything
contained in the Income-tax Act or any other law for the time being
in force, the amount payable by the declarant under this Scheme
shall be as mentioned in the Table below, namely:—

44
Sl. No Nature of tax arrear. Amount payable under this Scheme Amount payable under this Scheme
on or before the 31st day of on or after the 1st day of January,
December, 2024. 2025 but on or before the last date.
(a) where the tax arrear is the aggregate Amount of the disputed tax the aggregate of the amount of
amount of disputed tax, interest disputed tax and 10% of disputed tax.
chargeable or charged on such disputed

tax and penalty leviable or levied on
such disputed tax in a case where the
declarant is an appellant after the 31st
day of January, 2020 but on or before
the specified date.
(b) where the tax arrear is the aggregate The aggregate of the amount of the aggregate of the amount of
amount of disputed tax, interest disputed tax and 10% of disputed tax disputed tax and 20% of disputed tax
chargeable or charged on such disputed
tax and penalty leviable or levied on
such disputed tax in a case where the
45
declarant is an appellant on or before
the 31st day of January, 2020 at the
same appellate forum in respect of the
such tax arrear.
(c) where the tax arrear relates to disputed 20% of disputed interest or disputed 30% of disputed interest or disputed
interest or disputed penalty or disputed penalty or disputed fee. penalty or disputed fee.
fee where the declarant is an appellant
after the 31st day of January, 2020 but
on or before the specified date.
(d) where the tax arrear relates to disputed 30% of disputed interest or disputed
interest or disputed penalty or disputed penalty or disputed fee.
fee where the declarant is an appellant
on or before the 31st day of January,
2020 at the same appellate forum in
respect of the such tax arrear.
Provided that in a case where an appeal or writ petition or special
leave petition is filed by the income-tax authority on any disputed
issue before the appellate forum, the amount payable shall be one-
half of the amount in the Table above calculated on such issue, in
such manner, as may be prescribed:
Provided further that in a case where an appeal is filed before the CIT
(Appeals) or JCIT (Appeals) or objections is filed before the DRP by the
appellant on any issue on which he has already got a decision in his
favour from the ITAT (where the decision on such issue is not reversed
by the High Court or the Supreme Court) or the High Court (where
the decision on such issue is not reversed by the Supreme Court), the
amount payable shall be one-half of the amount in the Table above
calculated onsuch issue, in such manner, as may be prescribed:
Provided also that in a case where an appeal is filed by the appellant
on any issue before the ITAT on which he has already got a decision
in his favour from the High Court (where the decision on such issue
is not reversed by the Supreme Court), the amount payable shall be
one-half of the amount in the Table above calculated on such issue,
in such manner as may be prescribed.

46
47
48

Budget Booklet 2024 - by Avinash Gupta - Whatsapp

Uploaded by

Copyright:

Available Formats

Budget Booklet 2024 - by Avinash Gupta - Whatsapp

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Budget Booklet 2024 - by Avinash Gupta - Whatsapp

Uploaded by

Copyright:

Available Formats

Analysis of Budget 2024

8. Tax Administration and Compliance 24

10. Tax Deduction at Source 33

11. Miscellaneous Amendments 40

12. Direct Tax Vivad se Vishwas Scheme, 2024 42

Analysis of Budget 2024

Old Regime [Need to be opted]

Analysis of Budget 2024

Super Senior Citizen (Between above 80 years of age)

Note: Cess of 4% is leviable on the amount of income tax and surcharge, if

Analysis of Budget 2024

Amendment in Capital Gain Tax Rates.

Analysis of Budget 2024

Analysis of Budget 2024

Having total income of less than 10,001 10%

Income (Rs) Proposed rate of tax Old rate of Tax

(AY 2025-26) (AY 2024-25)

Additionally, cess of 4% shall be levied.

Analysis of Budget 2024

Analysis of Budget 2024

Section Existing Deduction Proposed De-

Analysis of Budget 2024

Analysis of Budget 2024

1 On the first Rs. 3,00,000 of Rs. 1,50,000 or 90% of the book-

1 On the first Rs. 6,00,000 of Rs. 3,00,000 or 90% of the book-

Analysis of Budget 2024

4.2 Change in Rates of STCG and LTCG [w.e.f. 23.07.2024]

Capital Gains Present Rate Proposed Effective

Analysis of Budget 2024

Capital Gains Present Rate Proposed Effective

4.3 Removal of Benefit of Indexation of Cost [w.e.f.

Analysis of Budget 2024

Analysis of Budget 2024

Analysis of Budget 2024

Analysis of Budget 2024

Analysis of Budget 2024

Analysis of Budget 2024

Analysis of Budget 2024

Analysis of Budget 2024

Analysis of Budget 2024

Analysis of Budget 2024

Analysis of Budget 2024

7.4 Merger of trusts under the exemption regime with

Analysis of Budget 2024

Analysis of Budget 2024

Analysis of Budget 2024

Analysis of Budget 2024

Analysis of Budget 2024

Analysis of Budget 2024

Analysis of Budget 2024

Analysis of Budget 2024

Analysis of Budget 2024

10.2 Ease in claiming credit for TCS collected/TDS

Analysis of Budget 2024

Analysis of Budget 2024

Analysis of Budget 2024

Analysis of Budget 2024

Analysis of Budget 2024

Analysis of Budget 2024