Summary of Amendments – DIRECT TAXATION
Finance Bill, 2024
Summary of Amendments – DIRECT TAXATION
Direct Tax:
- Tax rates under section 115BAC (new tax regime) –
| Sl no. | Total Income | Rate |
| 1 | Upto Rs. 3,00,000 | Nil |
| 2 | From Rs. 3,00,001 to Rs. 7,00,000 | 5% |
| 3 | From Rs. 7,00,001 to Rs. 10,00,000 | 10% |
| 4 | From Rs. 10,00,001 to Rs. 12,00,000 | 15% |
| 5 | From Rs. 12,00,001 to Rs. 15,00,000 | 20% |
| 6 | Above Rs. 15,00,000 | 30% |
- Salaried employee in new tax regime will save up to Rs 17,500 in income tax by virtue of the above changes in slab rates.
2. No change in old tax regime.
3. New tax regime is the default tax regime. However, individuals are free to change to old tax regime, which is same as last year.
4. No change in tax rates with respect to Co-operative societies, Firms, Local Authorities.
5. Rates for deduction of income-tax at source during the financial year (FY) 2024-25 from certain incomes other than “Salaries”:
- Tax rate in case of company which is not a domestic company (Foreign Company), has reduced to 35% from 40%.
| Sl No. | Income | For transfers taking place before 23rd day of July, 2024 / Tax rate | For transfers taking place on or after 23rd day of July, 2024 / Tax rate |
| 1 | Long-term capital gains on financial assets. | 10% | 12.5% |
| 2 | Long-term capital gains non-financial assets. ((listed equity & Equity oriented units) | 20% | 12.5% |
| 3 | Short-term capital referred to in section 111A (listed equity & Equity oriented units) | 15% | 20% |
- Under the head Income from Capital gains:
| Particulars | LTCG before 23/7/24 (tax @20%) | LTCG after 23/7/24 (Tax @ 12.5% |
| Sale consideration | 1,00,00,000 | 1,00,00,000 |
| Less: COA | 72,60,000 | 20,00,000 |
| (20,00,000*363/100) | ||
| LTCG | 27,40,000 | 80,00,000 |
| Tax | 5,48,000 | 10,00,000 |
| Excess Taxes | 4,52,000 |
Example 2 : House sold in FY 24-25 for 5 crore which is acquired in 2001 for 20 Lakh
| Particulars | LTCG before 23/7/24 (tax @20%) | LTCG after 23/7/24 (Tax @ 12.5% |
| Sale consideration | 5,00,00,000 | 5,00,00,000 |
| Less: COA | 72,60,000 | 20,00,000 |
| (20,00,000*363/100) | ||
| LTCG | 4,27,40,000 | 4,80,00,000 |
| Tax | 85,48,000 | 60,00,000 |
| Benefit Obtained | 25,48,000 |
- The exemption under sec 112A for LTCG has been increased from Rs.1,00,000/- to Rs.1,25,000/-
- No Indexation benefit is available.
- The period of holding for Bonds, Debentures and Gold will reduce from 36 months to 24 months.
- For unlisted shares and immovable property the period of holding shall remain 24 months.
6. Standard Deduction has been increased from Rs.50,000/- to Rs.75,000/- in new tax regime.
7. Deduction on family pension for pensioners enhanced from ₹15,000/- to ₹25,000/-
8. With the intent to increase the deduction available to the employee on NPS contributions, the limit of employer’s contribution is now increased from 10% of salary to 14% of salary. Here, salary includes dearness allowance, if the terms of employment so provided, but excludes all other allowances and perquisites
9. The allowable expenditure of remuneration paid to workings partners is amended as follows –
| Sl No. | Particulars | Remuneration allowed |
| 1 | on the first Rs. 6,00,000 of the book-profit or in case of a loss | Rs. 3,00,000 or at the rate of 90 per cent of the book-profit, whichever is more; |
| 2 | on the balance of the book-profit | at the rate of 60 per cent |
10. Change in rates of TDS is as mentioned below :
| Section | Present TDS Rate | Proposed TDS Rate | With effect from |
| Section 194DA – Payment in respect of life insurance policy | 5% | 2% | 01-10-2024 |
| Section 194G – Commission etc on sale of lottery tickets | 5% | 2% | 01-10-2024 |
| Section 194H – Payment of commission or brokerage | 5% | 2% | 01-10-2024 |
| Section 194-IB – Payment of rent by certain individuals or HUF | 5% | 2% | 01-10-2024 |
| Section 194M – Payment of certain sums by certain individuals or Hindu undivided family | 5% | 2% | 01-10-2024 |
| Section 194-O – Payment of certain sums by e-commerce operator to e-commerce participant | 1% | 0.1% | 01-10-2024 |
| Section 194F relating to payments on account of repurchase of units by Mutual Fund or Unit Trust of India | Proposed to be omitted | 01-10-2024 | |
11. The insertion of new TDS section 194T is inserted to bring payments such as salary, remuneration, commission, bonus and interest to any account (including capital account) of the partner of the firm under the purview of TDS for aggregate amounts more than Rs 20,000 in the financial year. Applicable TDS rate will be 10% and the said provision will be effective 1st day of April, 2025.
12. Non-reporting / failure to disclose the information/incomes from foreign assets located outside India, attracts penal provisions u/s 42 or 43 of the Black Money Act amounting to Rs.10 lakhs earlier. This non-reporting / wrong disclosure of assets up to a value of Rs. 20 lakhs is now condoned with effect from 01.10.2024.
13. Securities Transaction Tax (STT) has been increased from 0.0125% to 0.02% on futures trading, and from 0.0625%to 0.10% in case of options trading.
14. Simplification of Reassessment :
- Assessment can now be reopened beyond three years upto five years (earlier 10 years) from the end of Assessment Year only if the escaped income is ₹ 50 lakh or more.
- In search cases, time limit reduced from ten to six years before the year of search.
15. Angel tax provisions of Section 56(2)(viib) has been abolished w.e.f 1st day of April, 2025, which means that tax benefit between fair value and actual amount received on issue of shares in case of startup companies will be taxable from 01st April, 2025.
16. Equilization levy of 2% is withdrawn with effect from 01.08.2024 – This relates to levy of tax on any consideration received or receivable by an e-commerce operator from e-commerce supply or services made or provided or facilitated by it.
17. Vivaad se Vishwas Scheme has been proposed to implement to facilitate the settlement of income tax disputes and eliminate litigation.
