Highlights of Finance Bill, 2024: Tax Rate Changes, Deductions, Faceless Scheme, TCS, and Outstanding Tax Demand Amendments

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Highlights of Finance Bill, 2024: Tax Rate Changes, Deductions, Faceless Scheme, TCS, and Outstanding Tax Demand Amendments

Highlights of Finance Bill, 2024: Tax Rate Changes, Deductions, Faceless Scheme, TCS, and Outstanding Tax Demand Amendments

HIGHLIGHTS OF FINANCE BILL, 2024

1. Proposed Changes in Tax Rates

  • No changes in tax rates are proposed by Finance Bill, 2024

Note: View PDF for Finance Bill, 2024 โ€˜PART I INCOME-TAX for details.

2. Proposed amendments w.r.t. Deductions and Exemptions

  • Following amendments are proposed for deductions/ exemptions:
Sections Particulars Existing Condition Proposed Amendment
10(23FE) Exemption to the wholly owned subsidiary of ADIA or Sovereign wealth fund or pension fund Exemption for specified investment between 01/04/2020 to 31/03/2024 Exemption for specified investment between 01/04/2020 to 31/03/2025
80-IAC Deduction for profits and gains of eligible start-ups Entity should be incorporated on or before 31/03/2024 Entity may be incorporated on or before 31/03/2025
10(4D) Exemption to specified fund Commencement of operations on or before 31/03/2024 Commencement of operations on or before 31/03/2025
10(4F) Exemption to royalty or interest income received by a non-resident from lease of aircraft or a ship
80LA Deduction to Off-shore Banking Units and IFSC

3. Proposed amendments w.r.t. Faceless Scheme

  • To implement the faceless regime in Section 92CA, Section 144C, Section 253 and Section 255, it was provided that the CBDT shall issue the necessary directions by 31/03/2024
  • It is proposed to amend the aforesaid Sections to allow the issue of necessary directions by 31/03/2025.
  • The following faceless schemes are covered in the above sections:
Sections Particulars
92CA Faceless determination of armโ€™s length price
144C Faceless Dispute Resolution Panel
253 Faceless appeal to Appellate Tribunal
255 Faceless procedure of Appellate Tribunal

highlights-of-finance-bill-2024

4. Proposed amendments w.r.t. TCS

  • The Finance Bill proposes the necessary amendments to Section 206C(1G) to restore the threshold of INR. 7 lakhs per financial year for TCS on all categories (except the sale of overseas tour program packages) of foreign remittances made under the Liberalised Remittance Scheme (LRS) w.e.f. 01-10-2023
  • In the case of โ€˜sale of overseas tour program packageโ€™, the TCS rate shall be 5% for remittances up to INR 7 lakh, and 20% for remittances exceeding INR 7 lakhs.
  • The Finance Bill, 2024 proposes to insert the sixth proviso to provide that the collection of tax at source during the period 01-07-2023 to 30-09-2023 shall be in accordance with provisions of Section 206C(1G) as they stood on 01-04-2023.

5. Proposed amendments w.r.t. Outstanding Tax Demand

  • In the budget speech, Honโ€™ble Finance Minister proposed to withdraw or waive off the small, unresolved, unverified, or disputed direct tax demands pertaining to the financial years up to 2014-15.
  • The proposal aims to waive off the recovery of the old outstanding demands up to INR 25,000 for the period up to financial year 2009-10 and up to INR 10,000 for financial years 2010-11 to 2014-15
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