FM’s Comprehensive Review of Income Tax Act 1961: Budget 2024 LIVE
By: Admin
July 23, 2024
Categories: budget 2024-25
Comprehensive Review of Income Tax Act 1961: FM’s Proposals for Budget 2024
In a landmark move, the Finance Minister has unveiled a comprehensive review of the Income Tax Act 1961 as part of Budget 2024. These proposed amendments aim to streamline tax processes, reduce litigation, and enhance compliance across various sectors. Here’s a detailed breakdown of the key proposals:
Reduction in Litigation and Streamlining Tax Regimes
One of the primary objectives of the proposed amendments is to reduce demands embroiled in litigation. By simplifying tax procedures and clarifying ambiguities in the Income Tax Act, the government seeks to create a more transparent and predictable tax environment for taxpayers.
Consolidation of Tax Exemption Regimes for Charities
Currently, there are two tax exemption regimes for charities. The Finance Minister has proposed merging these regimes into a single unified framework. This consolidation aims to eliminate overlaps, reduce compliance burdens, and ensure equitable treatment of charitable organizations under the tax laws.
Revised TDS Rates on E-commerce Payments
Under the new proposals, the TDS (Tax Deducted at Source) rate on e-commerce payments will be reduced significantly, from 1% to 0.1%. This adjustment is intended to stimulate digital transactions and support the growth of online commerce platforms.
Capital Gains Tax Reforms
Long-Term Capital Gains (LTCG)
A significant change proposed is the introduction of a 12.5% LTCG tax rate on all financial and non-financial instruments. This rate will apply uniformly across different asset classes, aiming to rationalize the tax treatment of capital gains and promote investment efficiency.
Short-Term Capital Gains (STCG)
Certain assets will attract a 20% STCG tax rate under the new provisions. This adjustment is aimed at aligning tax rates with asset types and market conditions, thereby ensuring fairness and consistency in capital gains taxation.
Withdrawal of TDS on Mutual Fund Units Repurchase
Currently, there is a 20% TDS rate on the repurchase of units by mutual funds or UTI (Unit Trust of India). The proposed amendments include the withdrawal of this TDS requirement, which is expected to simplify tax compliance for mutual fund investors and encourage long-term investment in financial instruments.
Conclusion
In conclusion, the proposed amendments to the Income Tax Act 1961 represent a significant step towards modernizing India’s tax framework. These reforms aim to enhance transparency, reduce compliance burdens, and promote economic growth by providing a more predictable tax regime. As stakeholders await further details and implementation timelines, it is essential to stay updated on these developments to navigate the evolving tax landscape effectively.
For more information on Budget 2024 and its impact on taxation, stay tuned to our website for updates and analysis.
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