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Reassessment notice limits tightened, requiring pre-notice show-cause, specified authority approval and revised limitation periods for reopening cases.
Before initiating assessment, reassessment or recomputation the Assessing Officer must issue a notice with the prior order determining fit for reopening and require a return within a period not exceeding three months. A notice can be issued only where information suggests escaped income; survey information after the commencement date is included as such information, and information from a notified information sharing scheme requires prior specified authority approval. A pre notice show cause procedure with an opportunity to reply and specified authority approval to proceed is mandated, subject to transitional provisions and revised limitation windows, including extended periods for substantial escaped income.
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Limitation for imposing penalties clarified by removing receipt-by-senior-commissioner reference, simplifying calculation of penalty limitation periods.
The provision governing the period of limitation for imposing penalties is amended to omit the reference to receipt of appellate orders by the Principal Chief Commissioner or Chief Commissioner, removing ambiguity in calculating limitation periods arising from appeals; the amendment takes effect from 1 October 2024.
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Withholding of refunds: extension of permissible withholding period and continued set-off against outstanding tax demands under new provisions.
Assessing Officers may adjust refunds against outstanding tax demands and withhold refunds during pending assessment or reassessment subject to prior approval and reasons recorded in writing. The permissible withholding period is extended beyond the assessment date, and additional interest under the refund interest provision is not payable for the duration the refund is lawfully withheld.
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Time-limit for appeals to ITAT changed to a two-month period measured from month-end after electronic communication of orders.
The proposal adds penalty orders on undisclosed income arising from search assessments to the list of orders appealable to the Income Tax Appellate Tribunal, correcting an omission; and it changes limitation computation so appeals may be filed within two months from the end of the month in which the order is communicated to the assessee or to the Principal Commissioner/Commissioner to accommodate electronic faceless appeal communications.
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Charitable trust regime consolidation: transition to unified registration framework with phased sunsetting and protected investment modes retained.
The proposal phases out the approval route under sub clauses (iv), (v), (vi) and (via) of clause (23C) of section 10 by preventing consideration of applications filed on or after 1 October 2024, while allowing pending applications and existing approvals to continue under the first regime; approved entities may later apply for registration under the sections 11-13 framework, with amendments preserving certain eligible investment modes and enabling the transition.
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Condonation of delay in registration applications allows authorities to treat late charitable registration filings as timely if reasonable cause exists.
The amendment authorises the Principal Commissioner or Commissioner to condone delay in filing registration applications by trusts and institutions and to treat such applications as filed within time if satisfied there is a reasonable cause for the delay. This power is intended to avert tax liability on accreted income or permanent exit from the exemption regime and takes effect from 1 October 2024.
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Section 80G approval timelines rationalised to prevent unintended loss of charitable approval and streamline application processing.
Amendments rationalise filing timelines and the processing procedure for funds and institutions seeking approval under section 80G, addressing cases where entities cannot meet existing deadlines and preventing unintended permanent loss of approval; the change preserves donor deduction eligibility and takes effect from the commencement date specified in the Bill.
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Registration timelines for charitable trusts moved to a six-month processing period measured from quarter-end for applications.
Applications by trusts, funds, or institutions seeking registration under section 12AB or approval under section 80G must be processed by the Principal Commissioner or Commissioner within six months from the end of the quarter in which the application is received; this quarter-end computation applies to initial and further or final registration/approval applications and replaces the prior month-end calculation.
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Merger of trusts may trigger tax on accreted income; proposed conditions aim to exempt qualifying mergers and clarify compliance.
Proposal: mergers of approved or registered charitable trusts and institutions may attract the tax on accreted income; a new statutory provision will prescribe conditions under which such mergers will not attract the accreted-income regime, specifying qualifying non-attraction safeguards for mergers between entities across the two approval/registration regimes. The amendments are to apply prospectively from the notified commencement date of the finance measures.
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Registration option for charitable trusts expanded to allow claiming exemption under additional specified section 10 clauses.
The amendment adds additional section 10 clause references to sub-section (7) of section 11 so that registration under section 12AB becomes inoperative when an entity is approved under those additional clause types; trusts and institutions retain a one-time option to apply to make their section 12AB registration operative, permitting an election between the registration regime and specified section 10 exemption regimes.
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Capital gains reform: simplified holding periods, unified long-term rate, higher short-term levy, and removal of indexation.
The Bill simplifies capital gains taxation by creating two holding periods-shorter for listed securities and longer for other assets-raising the specific short-term rate for securities subject to securities transaction tax while unifying long-term gains under a single lower rate with an increased exemption for specified securities; it removes indexation for long-term gains on property, gold and unlisted assets, brings unlisted debentures and bonds to tax at applicable rates, and aligns non-resident and withholding provisions to the new rates, effective from the operative date in the Bill.
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Specified Mutual Fund definition revised: funds must invest over sixty five percent in debt/money market, effective April 2026.
The amendment redefines Specified Mutual Fund under section 50AA to mean (a) a mutual fund investing more than sixty five percent of its proceeds in debt and money market instruments, or (b) a fund investing sixty five percent or more of its proceeds in units of such a fund. The change clarifies treatment of ETFs, gold funds and Fund of Funds previously affected by the thirty five percent equity threshold and is proposed to be effective from 1 April 2026 for AY 2026 27 onwards.
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TDS rate rationalisation reduces multiple withholding rates to simplified lower bands, retaining specific exceptions for certain payments.
Rationalisation of TDS rates streamlines withholding provisions by lowering multiple prior rates for specified non-salary payments, proposing omission of the provision on mutual fund unit repurchases, and preserving existing withholding regimes for salaries, virtual digital assets, lotteries, immovable property transfers, non-resident payments and contractor payments; implementation is phased on different effective dates to promote administrative simplification and improved taxpayer compliance without changing substantive chargeability.
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TDS on insurance commission reduced for non-corporate payees, affecting deduction at credit or payment from the effective date.
The Finance Bill amends withholding tax treatment for remuneration or reward for soliciting or procuring insurance business by reducing the TDS rate applicable to resident non-corporate payees; payers must continue to deduct tax at source when such income is credited or paid under existing triggering rules and modes, with the reduced rate taking effect from the prescribed effective date stated in the amendment.
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TDS on life insurance payouts reduced by amendment, lowering withholding obligation on qualifying policy payments for residents.
Section 194DA requires persons paying sums under life insurance policies to deduct tax at source on the income component of such payments, excluding amounts exempt under clause (10D) of section 10. The Finance (No.2) Bill, 2024 proposes a reduction in the withholding rate under Section 194DA, with the amendment to take effect from the first day of October under Clause 54, thereby lowering the deductor's TDS obligation on qualifying life insurance payouts to residents.
News Bills
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TDS on lottery commissions reduced under section 194G, easing withholding obligations for payers from October onward.
Payers of commission, remuneration or prizes on sale or distribution of lottery tickets must deduct tax at source at the statutory withholding rate at the time of credit or payment, whichever is earlier. The Finance Bill amendment (Clause 56) lowers that withholding rate, with the reduction effective from the commencement date specified in the Bill.
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TDS on commission and brokerage reduced, altering withholding obligations and the timing of deduction for non individual payors.
Section 194H imposes TDS on persons other than individuals and HUFs for commission or brokerage (excluding insurance commission), requiring deduction at the time of credit or payment. The Finance Bill proposes a reduction in the TDS rate under section 194H, with the amendment to take effect from the stated commencement date, thereby modifying deductor withholding obligations for subsequent payments.
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TDS on rent reduced for individuals and HUFs, lowering withholding obligations for specified high-value rent payments.
Section 194-IB presently obliges individuals and Hindu undivided families (except those excluded by the second proviso to section 194-I) paying rent above the monthly threshold to deduct tax at source; the Finance Bill amends the provision to reduce the TDS rate from five percent to two percent, with the amendment operative from 1 October 2024.
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TDS on payments for work, commission and professional fees reduced to a lower withholding rate, effective from October.
Section 194M requires individuals and Hindu undivided families (except those already required to deduct under related contractor, commission or professional service provisions) to deduct tax at the earlier of credit or payment on sums for carrying out work (including supply of labour), commission or brokerage (excluding insurance commission), and fees for professional services. The Finance Bill proposes to reduce the prescribed withholding rate under Section 194M, with the amendment effective from 1 October 2024 as Clause 60.
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TDS on e-commerce transactions reduced to align with offline parity under the Finance Bill amendment.
Section 194-O obliges an e-commerce operator to deduct tax at source on the gross amount of sales or services when that amount is credited to an e-commerce participant's account or paid, whichever is earlier. The Finance Bill proposes reducing the operator's TDS rate to achieve parity with lower rates applicable to comparable offline provisions, with an effective date specified in the Bill.

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CUSTOMS DUTY EXEMPTIONS / CONCESSIONS BEING ALLOWED TO LAPSE

24 July, 2024

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Union Budget 2024-25 (Full) + FINANCE (No.2) Bill, 2024

Certain BCD exemptions entries under S No. 50/2017-Customs dated 30.6.2017 and other notifications are being allowed to lapse with effect from 30.9.2024.

(a) The following entries of notification no. 50/2017-Customs dated 30.6.2017 are being allowed to lapse with effect from 30.9.2024:

S. No.

S N of 50/2017 Customs

Description

1.

478

Wireless apparatus, accessories and parts as specified in List 29 imported by a licensed amateur radio operator

2.

353

Foreign currency coins when imported into India by a Scheduled Bank

3.

387

 Zinc metal recovered by toll smelting or toll processing from zinc concentrates exported from India for such processes

4.

441

Spinnerettes made inter alia of Gold, Platinum and Rhodium or any one or more of these metals, when imported in exchange of worn-out or damaged spinnerettes exported out of India

5.

238

Organic/inorganic Coating material for manufacture of electrical steel

6.

254

Catalyst for manufacture of cast components of Wind Operated Electricity Generator

7.

255

Resin for manufacture of cast components of Wind Operated Electricity Generator

8.

277A

Calendared plastic sheet for manufacturing of Smart Card under chapter heading 8523

9.

339

Concessional rate on import of Toughened glass with low iron content and transmissivity of minimum 91% and above, for use in manufacture of solar thermal collectors or heaters

10.

421

Specified goods required for basic telephone service, cellular mobile telephone service, internet service or closed users’ group 64 KBPS domestic data network via INSAT satellite system service and parts, for manufacture of the goods

11.

479

Mono or Bi polar Membrane electrolysers and parts thereof including secondary brine purification components, jumper switches, filtering elements for hydrogen filters for caustic soda or potash units; Membrane and parts thereof or other parts for caustic soda or potash units;

12.

475

Specified goods including scramblers, descramblers, encoders, decoders, jammers, network firewalls, network sniffers, scanners and monitoring systems, probes for data monitoring and SMS/MMS monitoring systems

13.

482

Newspaper page transmission and reception facsimile system or equipment; and Telephoto transmission and reception system or equipment

14.

495

Batteries for electrically operated vehicles, including two and three wheeled electric motor vehicles.

15.

497

Active Energy Controller (AEC) for use in manufacture of Renewable Power System (RPS) inverters

16.

579

Survey (DGPS) instruments, 3D modeling software for ore body simulation cum mine planning and exploration (geophysics and geochemistry) equipment required for surveying and prospecting of minerals

17.

419

Aluminium Oxide for manufacture of washcoat of catalytic converter

18.

420

Clay 2 powder for use in ceramic substrate for catalytic convertor

19.

340

Solar tempered glass or solar tempered (anti-reflective coated) glass for use in manufacture of solar cells/panels/modules

20.

565

Specified goods for use in the manufacture of Flexible Medical Video Endoscope [heading 9018]

21.

566

 Specific input goods for manufacture of syringes, needles, catheters and cannulae

22.

568

Parts and components for manufacture of blood pressure monitors and blood glucose monitoring system (Glucometers)

Note: Description of entries is indicative. Notification may be referred to for complete description.

(b) The following notifications are being allowed to lapse with effect from 30.9.2024:

S. No

Notification No.

Description

1.

97/99-Customs dated 21 July 1999

Exempts BCD and additional duty under Sections 3(1), 3(3) and 3(5) on standard gold bars imported by a RBI authorised bank

2.

30/2004-Customs dated 28 January 2004

Provides full exemption from BCD to second-hand computers/accessories and peripherals received as donation by schools, charitable institutions.

3.

102/2007-Customs dated 14 September 2017

Provides exemption from Special Additional Duty (SAD) levied vide section 3(5) of CTA on to all goods imported for subsequent sale when IGST, CGST, SGST or UTGST paid by importer.

4.

45/2005-Customs dated 16 May 2005

Provides exemption from Special Additional Duty levied under Section 3(5) of CTA on goods cleared from SEZ to DTA.

5.

151/94-Customs dated 13 July 1994

Provides exemption to imports of duty-paid fuel and lubricating oil on aircrafts taken during the outward flight; goods imports by United Arab Airlines; aircraft engines, spares imported by Indian Airlines and Air India International. Re-import entries will operate from re-import notification 45/2017-Cus

6.

26-Customs dated 19th February 1962

Provides exemption from import duty under the Sea Customs Act on catering cabin equipment, food and drink on re-importation by aircrafts of the Indian Airlines Corporation from foreign flights

Note: Description of entries is indicative. Notification may be referred to for complete description.


Full Text:

Union Budget 2024-25 (Full) + FINANCE (No.2) Bill, 2024

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Acts Income Tax