Fair market value determination clarified for offer for sale shares listed after transfer, enabling computation of cost of acquisition.
Amendment extends the Explanation for computing fair market value to include equity shares sold under an offer for sale in an IPO that were unlisted on 31 January 2018 or at acquisition but listed subsequent to transfer; FMV is to be determined by applying the Cost Inflation Index proportion between 2017-18 and the first year of holding (or 2001-02 baseline) to the cost of acquisition, and the change is retrospective to 1 April 2018.

Vivad se Vishwas scheme proposed to settle direct tax disputes and reduce CIT(A) litigation backlog.
Introduction of a Direct Tax Vivad se Vishwas Scheme, 2024 to enable settlement of disputed direct tax issues pending at appellate levels, particularly at Commissioner of Income-tax (Appeals), to reduce litigation and expedite disposal. The proposal, prompted by the prior Direct Tax Vivaad Se Vishwas Act, 2020 and rising appeal pendency, will commence and conclude on dates to be notified by the Central Government and is set out in clauses 88 to 99 of the Finance (No.2) Bill, 2024.

Equalisation levy inapplicable to consideration for e commerce supply or services, reinstating exemption under section 10 and easing compliance.
The equalisation levy shall not apply to consideration received or receivable for e commerce supply or services on or after 1 August 2024. Income from e commerce supply or services made, provided or facilitated on or after 1 April 2020 but before 1 August 2024 shall be governed by clause (50) of section 10 of the Act, restoring its prior exemption framework where applicable. The exclusion for amounts effectively connected to a permanent establishment in India remains in force.

Penalty exemption threshold for undisclosed foreign assets increased, reducing penalty exposure for small value foreign holdings.
Amendments to sections 42 and 43 of the Black Money Act reinforce resident reporting obligations for foreign assets and income and confirm that failure to disclose may attract a penalty under section 42 or 43. The Finance Bill proposes raising the proviso exemption for low value assets (other than immovable property) so the sections will not apply where the aggregate value of such assets does not exceed a revised threshold, addressing stakeholder concerns that the prior threshold led to penalties disproportionate to asset value.

Prosecution exemption for TDS: specified deductors spared if quarterly TDS is paid by the filing deadline, new Finance Bill rule.
The amendment exempts a person from prosecution for failure to pay tax deducted at source where the tax for a quarter is paid to the credit of the Central Government on or before the time prescribed for filing the quarterly statement under the Act, thereby creating a temporal safe harbour tied to the statutory filing deadline.

Time limit for deeming assessee in default reduced to six years for deduction and collection; correction statement extends limitation.
Amendments to section 201 and insertion of sub section (7A) in section 206C impose a uniform limitation: no order deeming a person an assessee in default shall be made after six years from the end of the financial year in which payment/credit occurred or tax was collectible, or two years from the end of the financial year in which a correction statement is delivered, whichever is later; effective 1 April 2025.

Expanded TDS statement processing allows tax board to scheme for processing statements filed by non-deductors.
Amendment expands the scope of Section 200A to permit the Board to make a scheme for processing statements of tax deduction or correction statements filed by persons other than the deductor, addressing filings like exchange-submitted statements where the deductee provides tax details, with effect from the first day of April, 2025.

Lower deduction certificate extended to transactions under 194Q and 206C(1H) to reduce overlapping withholding and collection burdens.
The proposal amends subsection (1) of section 197 and subsection (9) of section 206C to include the buyer-side withholding provision and the seller-side collection provision within the scope of a lower deduction/collection certificate, allowing taxpayers to seek reduced withholding or collection rates to address blocked funds, refund processes, and overlapping compliance obligations.

TCS exemption to allow no or lower collection from notified exempt persons, easing compliance for tax exempt entities.
The Central Government is empowered to notify, in the Official Gazette, persons or classes of persons-including institutions, associations or bodies-for whom no TCS shall be collected or for whom TCS shall be collected at a lower rate in respect of specified transactions; this addresses cases where entities with tax-exempt income and no return-filing obligation nonetheless face TCS, and the amendment prescribes a prospective commencement for the relief.

Time limit for correction statements: limits post filing revisions of TDS/TCS statements, imposing multi year finality to filings.
Imposes a six year cut off for delivering correction statements for TDS and TCS: no correction statement may be delivered after six years from the end of the financial year in which the original statement was delivered, thereby providing finality to TDS/TCS filings and preventing indefinite post filing revisions.

Penalty for failure to furnish statements: shortened compliance window limits penalty relief after late TDS/TCS filing.
The penalty provision for failure to furnish TDS/TCS statements is amended so that no penalty applies only if, after paying TDS/TCS with fees and interest to the Central Government, the person files the TDS/TCS statement within a shortened compliance period measured from the time prescribed for furnishing such statement.

Furnishing obligation for liaison offices: late filing draws daily penalty with a capped alternative and reasonable cause defence.
Non-resident liaison offices must furnish an annual statement of activities within a period to be prescribed by Rules. Failure to furnish will attract a penalty of one thousand rupees per day where the default does not exceed three months, and one lakh rupees otherwise, subject to relief if the assessee proves reasonable cause; the amendment is prospective and adjusts penalty provisions in the compliance framework.

Determination of Arm's Length Price expanded to include unreported specified domestic transactions by the Transfer Pricing Officer.
The amendment enables the Transfer Pricing Officer to determine and compute the Arm's Length Price for specified domestic transactions that were not referred by the Assessing Officer or not disclosed in the taxpayer's transfer pricing audit report, extending to SDTs the existing procedural powers previously available only for international transactions; the change takes effect from 1 April 2025 and applies to the relevant assessment year and subsequent years.

Aadhaar Enrolment ID discontinuation removes enrolment id use for PAN and returns, requiring affected PAN holders to intimate Aadhaar.
The proviso allowing quoting of an Aadhaar Enrolment ID instead of an Aadhaar number for PAN allotment and income tax returns is proposed to be discontinued effective 1 October 2024 because expanded Aadhaar coverage makes the enrolment ID option a risk for PAN duplication and misuse; persons allotted PAN using an Enrolment ID must intimate their Aadhaar number by a notified date.

Advance Rulings withdrawal extended for transferred applications, allowing BAR to accept and record withdrawals within specified windows.
Amendments permit withdrawal of applications transferred from the former Authority for Advance Rulings to the Board for Advance Rulings where no order under the relevant provision has been passed, by allowing applicants to apply for withdrawal by 31st October, 2024; the Board may, upon such application, order the transferred application to be rejected as withdrawn on or before 31st December, 2024, with the amendment taking effect from 1st October, 2024.

Empowerment to refer best judgement assessments back to Assessing Officer with a prescribed time limit for fresh assessment.
The Bill proposes empowering the Commissioner (Appeals) to set aside best judgement assessments made under section 144 and refer the case to the Assessing Officer for a fresh assessment, and proposes a consequential amendment to section 153(3) to prescribe a time limit for disposal of cases so referred; the amendment applies to appellate orders passed on or after the specified commencement.

Penalty for inaccurate reporting clarified to include due diligence failures; reasonable cause defence added under amended provisions.
The amendment specifies that penalty applies where a person furnishing statements under section 285BA either furnishes inaccurate information or fails to comply with prescribed due diligence, to align with the AEOI/CRS framework. It further adds the penalty provision to the scope of section 273B, allowing a reasonable cause defence against imposition of the penalty. The changes are enacted prospectively as provided in the Finance Bill.

Tax clearance certificate requirement now covers Black Money Act liabilities, affecting exit permissions from India.
The amendment adds liabilities under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 to the list of tax statutes whose outstanding liabilities may render it necessary for a person domiciled in India to obtain a tax clearance certificate before leaving the country, while preserving the proviso requiring recorded reasons and prior approval of the Principal Chief Commissioner or Chief Commissioner; the amendment takes effect from 1 October 2024.

Assessment time-limits revised: new deadlines for returns under administrative orders and revived block assessments procedures
Amendments revise time-limits: assessments on returns filed following administrative directions may be completed within twelve months from the end of the financial year of filing; fresh assessments after appellate or supervisory orders will include cases set aside by the Commissioner (Appeals); timelines are specified for revived proceedings following annulment of block assessments; and search-period exclusions are adjusted so the limitation date falls at the end of the month after exclusion. A consequential provision applies return-obligations to returns furnished under administrative orders. Effective from 1 October 2024.

Deductibility under Section 80G updated to specify National Sports Development Fund as eligible recipient; applies prospectively.
Section 80G is amended to specify that donations to the National Sports Development Fund established by the Central Government are deductible in computing total income, replacing the earlier reference to the National Sports Fund; the amendment is prospective and will apply to subsequent assessment years.