Key Highlights of Recent Tax Changes

1. New Tax Regime (Section 115BAC):

   • Applicable to associations of persons, including non-cooperative societies, bodies of individuals, and artificial juridical persons.
   • Standard Deduction of Rs 50,000, Family pension, and Agniveer Corpus Fund allowed for income computation.
   • Slab rates for the new tax regime:
     • Up to 3,00,000: Nil
     • 3,00,001 to 6,00,000: 5%
     • 6,00,001 to 9,00,000: 10%
     • 9,00,001 to 12,00,000: 15%
     • 12,00,001 to 15,00,000: 20%
     • Above 15,00,000: 30%

2. Tax Rebate Limit Increased:

   • Rebate under section 87A increased to Rs 7 lakhs for the new tax regime.

3. Default Regime on the Portal:

   • New tax regime set as the default tax regime on the portal.
   • Default TDS deduction as per the new tax regime for employees who do not opt for any option.
   • Intimation to the employer does not constitute the final option; the employee must declare the option while filing the income-tax return.

4. Conversion of Gold to Electronic Gold Receipt:

   • No capital gains tax on the transfer of physical gold to Electronic Gold Receipt issued by a Vault Manager and vice versa.

5. Deemed Gift:

   • Receipt of money exceeding INR 50,000 without consideration by an NR from a person resident in India deemed as income accruing or arising in India.

6. Taxation of Life Insurance Policies:

   • Income received from life insurance policies issued on or after April 1, 2023, taxable if the annual premium exceeds INR 5 lakh, except if received on the death of the assured.

7. Leave Encashment Exemption:

   • Exemption limit for leave encashment received on retirement by non-government salaried employees increased to INR 25 lakh from INR 3 lakh.

8. Capital Gains Deduction on Residential Property:

   • Maximum deduction under sections 54 and 54F increased to rupees ten crore for all available long-term gains.

9. Interest on Housing Loan Exclusion:

   • Interest on housing loan claimed as deduction while computing taxable income not included in the cost of acquisition/improvement for purposes of capital gains.

10. TDS on Interest on Listed Debentures:

    • Section 193 amended for TDS on payment of interest on listed debentures to a resident.

11. TCS on Foreign Remittances for Overseas Tour Packages:

    • TCS increased from 5% to 20% for the purchase of overseas tour programs without any threshold.

12. Taxation of Capital Gains on Market-Linked Debentures:

    • Long-term capital gains from market-linked debentures taxed as short-term capital gains at normal rates.

13. Timely Payments to Micro and Small Enterprises:

    • Section 43B amended to allow deduction of any sum payable to a micro or small enterprise only on actual payment, or on accrual basis if within the time specified in the MSMED Act.

14. Reduced Time for Furnishing TP Report:

    • Time period for furnishing the Transfer Pricing (TP) report reduced from 30 days to 10 days from notice receipt; extension of 30 days possible.

15. Non-Resident Investors under Section 56(2)(viib):

    • Consideration received from non-resident or resident now under Section 56(2)(viib) for taxing excess consideration for issue of shares above fair market value.

These changes reflect a comprehensive approach to taxation, covering various aspects such as income computation, investment instruments, capital gains, and compliance procedures. Businesses and individuals are advised to carefully evaluate these amendments for effective tax planning.