Major Highlights of the Interim Budget 2024

01 Feb 2024
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Tax Update, Budget, GST
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Major Highlights of the Interim Budget 2024

1. For 2023–2024 (FY24), the government’s shortfall between its receipts and outlays is projected to be 5.8% of GDP, or the revised fiscal deficit. A 5.1% GDP fiscal deficit is anticipated for FY25. In 2025–2026 (FY26), the goal is to bring the fiscal deficit down to less than 4.5% of GDP.

2. Income tax slabs remain unchanged.

3. The government has made a significant announcement by agreeing to waive unpaid direct tax claims up to Rs 25,000 for the years 2009–10 and up to Rs 10,000 for the years 2010–11 through 2014–15.

4. According to Sitharaman, the number of tax filers increased by 2.4 times. Since 2014, the amount collected in direct taxes has tripled. The estimated tax revenue for 2024–2025 is Rs 26.02 lakh crore.

5. Two crore new homes would be included in the Pradhan Mantri Awas Yojana – Gramin (PMAY-G) according to the Finance Minister.

6. This will be a great age for our tech-savvy children. With the provision of a 50-year interest-free loan, a corpus of Rs. 1 lakh crore will be established. Long-term financing and re-financing with extended terms and low or no interest rates will be made available by the corpus. This will incentivize the private sector to considerably increase research and innovation in early-stage industries.

7. “Create programs that harness the power of technology and our young people.” In order to accelerate Atma Nirbharta and improve deep tech technology for defense, a new plan will be introduced.

8. Sitharaman also declared his intention to use the “existing hospital infrastructure under various departments” to establish other medical institutions.To look into the problems and provide recommendations that are pertinent, a committee will be formed for this purpose.

9. Their dignity has been improved by outlawing triple talaq, allocating one-third of the seats in the Lok Sabha and state assemblies to women, and providing over seventy percent of the dwellings in rural regions under the PM Awas Yoajana to women.

10. “One crore families will be able to receive up to 300 units of free electricity per month through roof-top solarization. This plan is in line with the Prime Minister’s determination on the historic day of Shri Ram Mandir’s Ayodhya dedication. By 2070, the government wants to reach “net zero.”

11. “Long-term interest-free loans to be provided to States to encourage development” is a plan to boost tourism.

12. Sitharaman began her address by pointing out that for the past ten years, there has been positive change in the Indian economy.

13. “The needs and aspirations of the poor, women, youth, and farmers will guide the country’s growth.”

14. By 2047, the government wants to have transformed India into “Viksit Bharat.””Sabka sath, sabka vikas” is our main concern.

15. GDP is a priority for the government, along with governance, development, and performance.

Read More: 10 Key Terms in the Budget Book and Their Definitions You Must Know

16. “Our government is working with an approach to development that is all-round, all pervasive, and all inclusive,” stated the Finance Minister in reference to social justice.

17. The Ministry of Finance forecast that the Indian economy would grow at a rate of more than 7% in the upcoming years and that, with a $5 trillion GDP, it will rank third in the world in the next three years in a review report released prior to the interim budget.

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Various Correction Types for TDS Returns in India

18 Jan 2024
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Income Tax, Tax Update
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Various Correction Types for TDS Returns in India

What is a TDS return?

Tax Deducted at Source, or TDS. This theory states that a deductor who must pay a deductee must deduct tax at the source and send the money to the federal government. The deductee is entitled to credit for the amount deducted from the income tax source deducted based on the TDS certificate.

Who is required to file a TDS return?

To file TDS returns, the following categories must be filled out:

Every company (collector and deductor included)
Every Revenue and Tax Collector in the Government
Individuals whose financial records are examined in compliance with the 1961 Income Tax Act
It is necessary for any further taxpayers from whom TDS has been withheld to submit TDS returns.

What is a Revised TDS Return?

The individual deducting TDS is required to regularly file TDS returns with NSDL. If a deductor finds any errors or needs to make any modifications to the return, he can file an updated TDS return to update the previous return.

When must we submit our updated TDS return?

In the following circumstances, we must file amended TDS returns:

Incorrect PAN number on a TDS statement
The amount of unanticipated TDS is subtracted.
Unexpected usage of funds and inaccurate information received in return

Types of TDS Return Corrections

Depending on the adjustments the deductor requests be made to the ordinary return, different correction kinds apply. There are six main categories for rectification returns.

C1: Except for the TAN number, all modifications made to the deductor’s details are subject to C1 rectification. If the address, PAN number, or deductor’s name are incorrect, a C1 correction is generated.

C2: A change in deductor details or currency is subject to the C2 correction. When the challan serial number is submitted improperly, it is necessary. However, C1 correction is also a part of the C2 correction process.

C3: Any kind of correction to the deductee, challan, or deduction details falls under this category (apart from PAN number corrections). Incorrect reference to the schooling cessation when rectifying specific details. Additional information, like the referencing currency, may also be deducted.

C4: Modifications to compensation details are subject to C4 modification. It is only relevant if the Form 24Q fourth quarter statement needs to be amended. If the records for Gross Salary or Total Salary are inaccurate, this modification may be made.

C5: If there is an issue with the deductee’s PAN number, C5 correction is necessary. Updates to PAN can also be made with Forms 26Q, 27Q, and 27EQ.

Read More: Advisory on auto-population of e-invoice details into GSTR-1

When preparing TDS reports, businesses and employers must deal with a large amount of information, which can lead to several mistakes. The submission of TDS returns is frequently amended. Usually, C1, C2, C3, C4, and C5 can all be updated with a single file. After filing the return, you have three days to review any modifications. To verify your TDS Return, you need to know your TAN and Receipt Number.

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Revised Income Tax Regulations Implemented in 2023 with Implications for 2024

02 Jan 2024
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Income Tax, Tax Planning, Tax Update
Comments Off on Revised Income Tax Regulations Implemented in 2023 with Implications for 2024

In the Union Budget of 2023, the Indian government unveiled a number of new income tax regulations. The New Income Tax Regime’s designation as the default tax regime was one of the major announcements pertaining to personal taxes.

Union Finance Minister Nirmala Sitharaman said in her budget speech for 2023–2024 that budget proposals under the new income tax regime will leave more money in the hands of the people and that it is their decision as to where to invest their money, not the government’s, to do so.

Key Modifications to Income Tax Regulations in 2023

New Tax Regime

In Budget 2020, the new tax structure was disclosed. The new tax system was optional between April 2020 and March 2023. It was established as the default regime in the Union Budget 2023. FM. Sitharaman stated that while taxpayers will still be able to use the previous tax regime, income tax will be computed using the new tax regime’s income tax slabs if a taxpayer fails to indicate which tax regime they wish to use for TDS from their salary or when filing their income tax return.

New tax slabs

Income tax slabs under the new tax regime were modified to make it more enticing and taxpayer-friendly.

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Income Tax Rebate

Individuals with annual incomes up to Rs 5 lakh were exempt from paying any taxes prior to the Union Budget 2023. This cap was increased to Rs 7 lakh.

Standard deduction under New Tax Regime

In the Union Budget 2023, the standard deduction of Rs 50,000—previously limited to the Old Tax Regime—was expanded to include the new tax regime. The tax-free income, including the rebate, is now Rs 7.5 lakh as a result of the inclusion.

Tax Implications for Maturity Payouts from Life Insurance

According to the Center, the maturity proceeds of life insurance policies will not be entirely free from income tax. The maturity amount will be taxed under the new rule if the total premium paid on all non-ULIP life insurance policies exceeds Rs 5 lakh in a financial year.

According to the CBDT, the taxable maturity amount will only be determined if the life insurance policies satisfy certain requirements, like the total premium paid for one or more non-ULIP insurance policies.

If the premium for a ULIP policy is paid in more than Rs 2.5 lakh during a particular financial year, the maturity amount is taxable.

Limit on Deductible Capital Gains from Property Sales

The maximum deduction from capital gains resulting from the sale of residential property has been capped by the Center at Rs 10 crore.

Under Section 54 and Section 54F of the Income-tax Act of 1961, taxpayers are eligible to deduct this from their taxes. As a result, the Capital Gains Account Scheme investment cap has been implemented by the Center.

Individuals, particularly HNIs who sell their old homes or residential properties and reinvest the proceeds in new properties to avoid paying LTCG taxes, would be impacted by the recently implemented rule.

Elimination of Long-Term Capital Gains Advantage for Debt Mutual Funds

According to the Center, investments placed in debt mutual funds after March 31, 2023, will not be subject to withdrawal taxes on long-term capital gains. This implies that the income slabs of taxpayers will determine how capital gains on debt mutual fund units are taxed. The gains are not subject to indexation-based LTCG taxation.

In the past, bank FDs did not offer the LTCG tax benefit to debt MFs. Investments made in debt mutual funds through March 31, 2023, will be subject to taxation under the previous LTCG tax regulations.

Lower Surcharge Applicable to High Net Worth Individuals

The surcharge rate on income above Rs 5 crores was lowered by FM Sitharaman from 37% to 25%. The effective tax rate was reduced by this action from 42.74% to 39%. This was only implemented as part of the New Tax Regime.

Prior to this, under both the Old and New Tax regimes, the surcharge—the tax on tax for individuals with income above Rs 5 crore—was 37% of the total tax amount. The maximum marginal tax rate (including the surcharge) was raised to 42.74% as a result.

Tax Deduction at Source (TDS) on Winnings from Online Gaming

The Center announced a new regulation stating that a 30% TDS would be applied to online prizes. Up until March 31, 2023, TDS was only imposed in cases where a financial year’s earnings exceeded Rs 10,000. According to the new regulation, taxpayers will need to file an ITR in order to request an income tax refund if the tax deduction exceeds their taxable income.

Read More: Six Income Tax notices that a salaried individual may receive

Income Tax Returns Dismissed

The Income Tax Administration unveiled the Discard return option in 2023, enabling people to fully erase their unverified ITR. With this, taxpayers can make modifications and remove their previously submitted, unverified ITR. In the end, this would assist the taxpayers in fixing the mistakes made before to the verification procedure.