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TDS on immovable property transfers: aggregate consideration across parties triggers deduction, curbing avoidance by splitting payments.
Amendment clarifies that for deduction under section 194-IA the consideration, and thus the threshold exemption and deduction obligation, is the aggregate amount paid or payable where more than one transferor or transferee is involved, countering treatment of individual buyer payments in isolation and addressing related tax avoidance.
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Tax deduction at source on interest payments for floating rate savings bonds now applies, expanding the tax base and anti-avoidance.
Amendment to Section 193 mandates deduction of tax at source at the time of payment of interest to residents where interest exceeds the prescribed threshold, specifically covering Floating Rate Savings (Taxable) Bonds (FRSB) 2020 and any Central or State Government security as may be specified by the Central Government; the amendment is effective from 1 October 2024.
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Non admissible business expenses: added back to life insurance profits, tightening deductions from assessment year 2025-26.
Amendment to Rule 2 of the First Schedule mandates that any expenditure not admissible under section 37 shall be included (added back) to the profits and gains of life insurance business, supplementing the actuarial surplus based computation and preventing misuse of deductions. The change takes effect from 1 April 2025 and applies from assessment year 2025 26.
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Inclusion of foreign tax withheld amounts as deemed income to align income computation with foreign tax credit claims.
Proposed amendment deems amounts deducted under Chapter XVII-B and income tax paid outside India by way of deduction, where credit is allowed against tax payable under the Act, to be income received for computing an assessee's total income, preventing under reporting and double benefit from foreign tax credits.
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Exclusion of professional fees from contractor TDS rules clarifies which payments require withholding under professional services provisions.
The amendment expressly excludes sums covered by section 194J from the definition of "work" in the Explanation to section 194C, removing overlap where payments for professional or technical services could otherwise be taxed as contractor payments; the change is framed as an anti avoidance clarification and takes effect from 1st October 2024.
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Deductibility of settlement payments excluded, preventing business expense claims for amounts paid to settle contraventions under notified laws.
The amendment clarifies that expenditure incurred to settle proceedings relating to a contravention under any law, as notified by the Central Government, falls within the definition of expenditure "for any purpose which is an offence or which is prohibited by law" and therefore shall not be allowable as a deduction for business or profession.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.

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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