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    Inclusion of retail schemes and Exchange Traded Funds (ETFs) in the existing relocation regime of fu...
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    Clause (23FE) of section 10 is amended to exclude long-term capital gains arising from investments in India from the total income of specified persons, even if such gains are deemed short-term under section 50AA, and to extend the qualifying investment date from 31st March, 2025 to 31st March, 2030; the amendments take effect from 1st April, 2025.
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    A presumptive taxation regime under proposed section 44BBD deems a fixed proportion of aggregate amounts received/receivable or paid/payable to non-residents for providing services or technology to resident companies establishing or operating electronics manufacturing or connected facilities under a Central Government notified scheme as profits and gains, simplifying tax treatment and lowering the effective tax on gross receipts, subject to prescribed conditions and rules.
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    Inland vessels registered under the Inland Vessels Act, 2021 are made eligible as qualified ships for the tonnage tax regime by aligning the income tax definition of inland vessels with that Act and by introducing corresponding amendments to extend tonnage tax benefits to inland vessels. The amendments are effective from 1 April 2026 and apply to the assessment year 2026 27 and subsequent assessment years.
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    The period of registration for trusts or institutions that apply under the specified application categories of section 12A(1)(ac) will be extended from five years to ten years where the total income, before applying sections 11 and 12, does not exceed the stated income threshold in each of the two preceding years; the change aims to reduce compliance for smaller trusts and will take effect from 1 April 2025.
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    TDS threshold rationalization raises and standardizes withholding triggers, reducing routine tax deductions on smaller payments.
    The proposal titled TDS threshold rationalization raises and standardizes the monetary thresholds that trigger tax deduction at source for multiple categories-interest (including securities), dividends to individuals, mutual fund/unit incomes, various winnings, insurance commission, lottery-related income, brokerage and commission, professional and technical fees, rent, and enhanced compensation-altering per-transaction and annual benchmarks and distinguishing treatment by payer type and payment mode for withholding obligations.
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    Section 193 – Interest on securities
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    TDS on interest on securities: threshold increased to reduce small-value deductions and limit routine withholding.
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    Section 194 – Dividends
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    Section 194 requires the principal officer of an Indian company, or a company with prescribed arrangements for dividend payments (including preference shares), to deduct tax at source from dividend payments to resident shareholders at the rate provided in the section. The Finance Bill raises the aggregate exemption threshold for individual shareholders under the first proviso so that no tax is required to be deducted on small aggregate dividend payments, with the amendment effective from the start of the next fiscal year.
    NewsBills
    Section 194A – Interest other than interest on securities
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    TDS on interest thresholds increased, raising exemption limits for banks, cooperatives and post office deposits next fiscal year.
    Amendments raise thresholds under Section 194A for deduction of tax at source on interest other than interest on securities, increasing payer-specific limits for banks, cooperative banks, certain cooperative societies and notified post office deposits from forty thousand to fifty thousand and raising the baseline for other payers from five thousand to ten thousand; senior citizen thresholds for the specified payer categories are increased to one hundred thousand and to ten thousand for other payers. The revised thresholds take effect from the first day of the fiscal year beginning April 1, 2025.

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      Section 194D – Insurance commission

      1 February, 2025

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      Union Budget 2025-26 (Full) + Finance Bill, 2025

      Section 194D – Insurance commission

      Section 194D of the Act requires that any person responsible for paying to a resident any income by way of remuneration or reward, whether by way of commission or otherwise, for soliciting or procuring insurance business (including business relating to the continuance, renewal or revival of policies of insurance) shall, deduct income-tax thereon at the rates in force, provided that the amount of such payment exceeds Rs. 15,000/- in a financial year.

      2. It is proposed to increase this threshold amount for requirement of deduction of tax at source under this section from Rs. 15,000/- to Rs. 20,000/-.

      3. This amendment will take effect from the 1st day of April 2025.

      [Clause 56]

       

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      Union Budget 2025-26 (Full) + Finance Bill, 2025

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