7 Essential Documents for Filing ITR AY 2024-25
7 Essential Documents for Filing ITR AY 2024-25 Filing income tax returns (ITR) is obligatory for every taxpayer annually. For the Assessment Year (A.Y.) 2024-25, the CBDT has updated all ITR…
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Interim Budget 2024-25 Income Tax Updates
“Keeping with the convention, I do not propose to make any changes relating to taxation and propose to retain the same tax rates for direct taxes and indirect taxes including import duties.”
Presenting the Interim Budget 2024–25 in Parliament, Union Minister for Finance and Corporate Affairs Smt. Nirmala Sitharaman stated, “Keeping with the convention, I do not propose to make any changes relating to taxation and propose to retain the same tax rates for direct taxes and indirect taxes including import duties.”
The Union Finance Minister proposed extending some tax benefits to start-ups and investments made by sovereign wealth or pension funds, as well as tax exemption on certain income of specific IFSC units, until March 31, 2025, in order to ensure tax continuity.
Smt. Sitharaman proposed that many small, unverified, unreconciled, or disputed direct tax demands—many of which date back to 1962—be relieved in accordance with the government’s goal of improving living and business conditions. She suggested that such outstanding direct tax demands be withdrawn up to ₹25,000 for the period up to the financial year 2009–10 and up to ₹10,000 for the financial years 2010–11 to 2014–15. It is anticipated that this will help roughly one crore taxpayers.
Major Modifications to Direct Tax Under the Finance Bill 2024
1. No modifications to the income tax rates, surcharge, income tax threshold limits, deductions, or exemptions allowed under the previous and current tax regimes.
2. The rates for corporations, firms/LLPs, and cooperative societies remain unchanged.
3. Extension of the exemption to the sovereign wealth fund, pension fund, or fully owned subsidiary of the Abu Dhabi Investment Authority (ADIA): Dividends, interest, and long-term capital gains received from a pension fund, sovereign wealth fund, or fully owned subsidiary of the ADIA were all exempt from taxes. But only if the investment was made between April 1, 2020, and March 31, 2024, was the aforementioned exemption applicable. The Finance Bill 2024 suggests extending the investment deadline to March 31, 2025.
4. The deadline for incorporating the Faceless Scheme for Dispute Resolution Panel under Section 144C, the Faceless Scheme for Income Tax Appellate Tribunal under Section 253, the Faceless Scheme for Transfer Pricing Officer under Section 92CA, and the Consequential Procedure of Appellate Tribunal under Section 255 has been extended from March 31, 2024 to March 31, 2025.
Tax Demand Settlement Amnesty
- Tax demands outstanding up to Rs. 25,000 pertaining to the period up to FY 2009-10; and
- Tax demands outstanding up to Rs. 10,000 for FY 2010- 11 to 2014-15.
Extension of Deadline March 31, 2024 to March 31, 2025 for:
1. Startups qualified for deduction under Section 80IAC
2. Designated fund as per Section 10(4D); and
3. A non-resident individual who receives revenue in the form of royalties or interest from the leasing of a ship or aircraft to an International Financial Services Center unit in the preceding year, as permitted by section 80LA.
Significant Milestones Highlighted in the Interim Budget 2024-25
1. Over the past decade, direct tax collections have tripled, and the number of return filers has increased by 2.4 times.
2. The new tax scheme now exempts taxpayers with income up to ₹7 lakh from any tax liability, a substantial increase from ₹2.2 lakh in the 2013-14 financial year.
3. The presumptive taxation threshold for retail businesses has been raised from ₹2 crore to ₹3 crore, while professionals eligible for presumptive taxation now have a threshold of ₹75 lakh, up from ₹50 lakh.
4. Additionally, the corporate tax rate has been reduced from 30% to 22% for existing domestic companies and further reduced to 15% for specific new manufacturing companies.
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