Key ncome Tax Amendment in Budget 2024

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Key Income Tax Amendments in July Budget 2024
Effective October 1, 2024
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• The Union Budget 2024, presented by Finance
  Minister Nirmala Sitharaman, brought several
  important changes to the Indian tax system,
  aiming to streamline processes and address
  long-standing issues. While some of these changes
  are already in effect, many significant
  amendments will be implemented from October 1,
  2024. These changes cover various aspects, such
  as TDS rates, share buyback taxation, and the
  Direct Tax Vivad Se Vishwas Scheme (VSV) 2.0,
  among others. The governments focus is clearly
  on improving tax compliance, providing relief to
  taxpayers, and resolving disputes efficiently.
  This article outlines the key amendments that
  will take effect from October 1, 2024, and their
  impact on individuals and businesses.
• Direct Tax Vivad Se Vishwas Scheme 2024 (VSV
  Scheme)
• After the so-called success of the initial VSV
  Scheme in 2020 and in response to the backlog of
  tax disputes, the government has launched VSV
  2.0, effective October 1, 2024. This scheme
  allows taxpayers to settle disputes related to
  tax, interest, penalties, or fees pending as of
  July 22, 2024, with appellate authorities, high
  courts, or the Supreme Court.

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Under VSV 2.0, if the department has filed an
appeal, the settlement amount will be reduced by
half, offering a more favorable resolution for
taxpayers.
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• 2. Buyback of SharesPreviously, many companies
  preferred the buyback route to avoid double
  taxation. During a buyback, the company has to
  pay tax on the transaction, but the proceeds were
  exempt from the tax in the hands of the
  shareholders. However, to align the tax treatment
  of buybacks with that of dividends, the
  government has amended the provisions for the
  taxation of share buybacks, effective from
  October 1st, 2024.Under the new rules,
  shareholders will now be liable for paying taxes
  on buyback proceeds according to their respective
  tax brackets, similar to how dividends are taxed.
  Additionally, companies will be required to
  withhold TDS on buyback proceeds at a rate of 10
  for resident individuals and 20 for non-resident
  individuals. This change will shift the tax
  burden from the companies to the shareholders,
  significantly impacting buyback strategies.
  Moreover, the cost of purchasing the shares will
  no longer be allowed to be set off against the
  buyback proceeds. Instead, it will be treated as
  a capital loss and may be set off against other
  capital gains, if applicable. 3. TDS Rates
  Several changes in TDS rates will take effect
  from October 1, 2024

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• Several changes in TDS rates will take effect
  from October 1, 2024

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•  4. Amendment in Penalty Provisions under BMA Act
  Under the amended provisions of the Black Money
  Act (BMA), penalties under Sections 42 and 43
  will not apply if the undisclosed asset does not
  exceed Rs. 20 lakh.
• 5. Securities Transaction Tax Derivative markets
  have grown significantly in recent years, playing
  an important role in the whole trading volume on
  Indian stock exchanges. The governments change
  to STT rates aims to align with increased market
  activity and guarantee that tax levels accurately
  reflect transaction values. From October 1, 2024,
  the STT on Futures and Options (FO) will
  increase For futures, STT will rise from 0.0125
  to 0.02. For options, STT will increase from
  0.0625 to 0.1 of the premium. Additionally, STT
  on share buyback proceeds will be taxed according
  to the beneficiarys taxable income.

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• 6. Aadhaar Card The provision allowing
  individuals to quote the Aadhaar Enrolment ID
  instead of the Aadhaar number in PAN applications
  and income tax returns will be discontinued from
  October 1, 2024.
• 7. Floating TDS Rate Effective October 1, 2024,
  TDS  at 10 will apply to interest on central and
  state government bonds, including Floating Rate
  Savings Bonds. No TDS will be deducted if the
  total interest income is less than Rs. 10,000 in
  a financial year.
• 8. Withdrawal of 20 TDS on mutual fund
  repurchase One of the significant tax relief
  measures is the withdrawal of the 20 TDS on
  mutual fund repurchases, providing relief to
  investors.
• 9. TDS on sale of immovable property Section
  194-IA clarifies that 1 TDS on payments for the
  sale of immovable property exceeding Rs. 50 lakh
  applies collectively in transactions involving
  multiple buyers or sellers. These changes reflect
  the governments focus on streamlining tax
  policies, increasing transparency, and addressing
  systemic gaps in the tax system. Taxpayers are
  advised to stay updated and comply with these new
  rules to avoid penalties and ensure smooth
  financial planning.Read more at https//taxguru
  .in/income-tax/key-income-tax-amendments-july-budg
  et-2024-effective-october-1-2024.htmlCopyright
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