• July 26, 2024

Union Budget 2024: Key Announcements by FM Nirmala Sitharaman for India Inc

Union Budget 2024: Key Announcements by FM Nirmala Sitharaman for India Inc

FM Nirmala Sitharaman’s Budget 2024 introduces key changes for India Inc, impacting taxation, TDS rates, and dispute resolution.

Finance Minister Nirmala Sitharaman’s first budget of Modi 3.0 spanned across various sectors and covered areas of national interests across regions. The union budget 2024, which was tabled on Tuesday in Lok Sabha, had several measures for India Inc including measures to end tax concessions for new manufacturing plants, revival of Vivad se Vishwas scheme, reduced TDS rates and more.

Here’s what’s in it for India Inc in Budget 2024-25:

‘Income from house property’

A rented property would be taxed as an ‘income from house property’. This would apply even if the property is used as part of a business by the owner. The rule would apply to developers who rent unsold flats, and they would no longer be able to set-off expenses from business associated with such rental income.

No extension to sunset clause

Tax concessions offered to the companies who set up new manufacturing plants before March 31, 2024 will be revoked. Concessions for such firms were set at the rate of 15 per cent, under the sunset clause

‘Vivad se Vishwas’ makes a comeback

‘Vivad se Vishawas’ scheme has made a comeback. A fresh version of the scheme that helps in the settlement of disputes will come into effect soon. The date for the release of the renewed scheme is yet to be announced.

Rationalised TDS rates

Payments that are subject to five per cent TDS deduction rates will attract two per cent TDS. These would cover insurance commission and brokerage. Etailors payments, on the other hand, would attract 0.1 per cent TDS.

Budget 2024 terms gifts as ‘transfer of asset’

Gifts given to employees by employers and companies would be treated as transfer of asset. This would benefit the employer, who would make gains associated with capital gain tax.

Reduction in tax assessment time

The time to reopen tax assessments has almost been halved. Currently, a period of 11 years is given to reopen assessment, but this has been reduced to a period of six years and three months. This would be relevant in cases where escaped income exceeds Rs 50 lakh.

Removal of angel tax

The tax imposed on the shares of unlisted companies, at a price exceeding fair value, after April 1, 2024, also known as Angel tax would be removed. This would help attract domestic as well as foreign investors.

Tax deductors would not face the risk of rigorous imprisonment if TDS is filed and deposited up to the due date of filing returns. Prosecution provisions would not apply to tax payers in this case.

Penalty on delay in filing taxes

Tax payers would face penalty on delay in filing TDS/TCS returns that go beyond a month. This would help make a timely reflection of TDS in e-records of authorities, and taxpayers would be eligible to avail TDS credit.

In cases where the tax effect to addition of income is Rs 60 lakhs, Rs two crores or more than Rs five crores, the tax payer can file an appeal before tax tribunal, high courts or the Supreme Court.

This article was originally published on The Economic Times news website.

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