You will need to know the budget in much more detail than others. You will be asked for insights and logic, not just the provisions
Personal Tax
Maximum surcharge rate reduced from 37% to 25% in case of taxpayer having taxable income exceeding INR 5Cr (maximum marginal rate reducing from 42.744% to 39%)
New Scheme vs Old Scheme –
Std Deduction is available to both old and new.
Tax slabs have been changed in New –
Income tax rate
Up to Rs. 3,00,000 – Nil
Rs. 300,000 to Rs. 6,00,000 – 5% on income which exceeds Rs 3,00,000
Rs. 6,00,000 to Rs. 900,000 – Rs 15,000 + 10% on income more than Rs 6,00,000
Rs. 9,00,000 to Rs. 12,00,000 – Rs 45,000 + 15% on income more than Rs 9,00,000
Rs. 12,00,000 to Rs. 1500,000 – Rs 90,000 + 20% on income more than Rs 12,00,000
Above Rs. 15,00,000 – Rs 150,000 + 30% on income more than Rs 15,00,000
Rebate u/s 87A increased to 25000 which means that there is no tax upto 700000 (750,000 for salaried considering Std deduction) – Limit also increased accordingly
Insights –
Source: https://www.linkedin.com/feed/update/urn:li:activity:7027112826838073344/
The New Scheme is no longer a scam!
Because it is finally worth it (for almost everyone).
You may have seen several analyses using different scenarios of income and deductions – but what really determines YOUR decision?
We all know the general principle – if you can take a lot of deductions, go for the old scheme. Else go for the new scheme. But how much deduction do I need for it to make sense to shift to the old scheme?
Introducing Version 2.0 of the Minimum Deduction Calculator. (I had prepared Version 1 exactly 3 years ago)
Just enter your income and you’ll get the minimum deduction you need.
Some insights from this tool
If you are salaried:
Upto ₹7,50,000 – Just go for the new scheme. Your tax will be 0 without the hassle of deductions
₹7,50,000 to ₹10,00,000 – This is the only bracket where it can occasionally make sense to go for the Old Scheme. You need a deduction of at least ₹1,37,500 to even begin to save money. This goes to ₹2,50,000 at ₹10,00,000 Income level. Such levels of deduction are tough to reach but still achievable. You’ll have to weigh the cost of inconvenience against the benefit – Do you really want to lock in more than ₹2,50,000 to save a few thousands?
Beyond ₹10,00,000 the minimum deduction required spirals out of control. It keeps rising till it hits a maximum of ₹3,75,000 at an income of ₹15,50,000. Opting for the New Scheme is a no-brainer – you can’t realistically get these levels of deductions.
Bottom Line:
1. Most people will be better off with the New Scheme
2. At an income slightly higher than ₹7,50,000 you can benefit from the old scheme, but you’re better off telling your employer to give you a minor pay cut and send you below ₹7,50,000.
3. If you have large deductions for HRA and Housing Loan, you may be better off opting for the Old Scheme
Impact:
1. Almost everyone will pay lower taxes with greater simplicity
2. Fund flow into ELSS and NPS will slow down
3. Fund flow into other modes of investment may rise
4. Consumer spending may rise
Download Link: bit.ly/MinDeduction
Corporate/ Other Income Tax changes
► Concessional tax regime introduced for new cooperative societies which commences manufacturing or production before 31 March 2024 and does not avail of any specified incentive or deductions, may opt to pay tax at concessional rate of 15% (plus surcharge of 10%) for tax year 2023-2024 onwards
► New provision inserted to tax income from winnings from online games. Income tax to be aggregate of 30% on net winning and incometax which would have been chargeable on remaining income of taxpayer (after reducing new winnings above). This will be effective from 1 April 2024. TDS to be done on net winnings from any online games at rates in force w.e.f 1 July 2023
► Last date of incorporation for claiming start-up incentives is extended by another year i.e., up to 31 March 2024
► Penalty and prosecution for default in TDS on “in kind” payments for transfer of virtual digital assets and business benefit or perquisite or online game winnings made explicit with prospective effect (1 April 2023/1 July 2023)
► TCS rate increased to 20% (as against 5%) with effect from 01 July 2023 on remittances under Liberalised Remittance Schemes (including overseas tour packages) other than for medical and education purposes
► Capital gains rollover exemption on investment in new residential property in India is now capped to INR10 crore with effect from 01 April 2024. New limit to apply to capital gains for rollover of capital gains from residential property and to net sale consideration for rollover of capital gains from any other capital asset
► Capital Gains arising from transfer/ redemption/ maturity of ‘Market linked Debenture’ (listed) taxable as short term capital gains w.e.f 1 April 2024
► Removal of exemption on TDS on payment of interest on listed debentures issued by a Company, to a resident, w.e.f 1 April 2023
► To ensure valuation of inventory as per law and prevent permanent deferral of taxes through undervaluation, tax officer may ask direct taxpayer to get inventory valuation done by a cost accountant and furnish valuation report as prescribed. Such period for inventory valuation is excluded for computing time limitation
► Cost of acquisition of any intangible asset or any other right (not already included in the ITL) will be Nil w.e.f 1 April 2024
► Removal of exemption on TDS on payment of interest on listed debentures issued by a company, to a resident, w.e.f 1 April 2023
► Interest payable on borrowed capital for acquiring/reconstructing a property, which is allowed as deduction under the head ‘income from house property’ will not be included as cost of acquisition for computing capital gains on sale of such property. This amendment comes in effect from 1 April 2024
► Conversion of gold to electronic gold receipt or vice versa is not liable to capital gains taxation
► Capital Gains arising from transfer/ threshold for turnover/ gross receipts for eligible business carried on by a partnership firm (other than LLP), to avail benefit of presumptive income scheme, increased to INR3 Crore provided amounts received in cash does not exceed 5% if total gross receipts
► Payment to MSME beyond time limits specified in MSMED Act will be allowed as deduction only on actual payment. Deduction allowed on accrual basis only if payment is within due date of MSMED Act
► Investment from ‘non-resident’ investors is also covered under the ambit of ‘premium/ angel taxation’, and therefore, any fund raised in excess of the prescribed fair value is taxable in the hands of the Indian Company
► Benefit of carry forward of business loss to eligible ‘start-ups’ will not be denied within 10 years (extended from seven years) from the year of incorporation subject to certain conditions
► Distribution (other than interest, dividend, rental income or capital gains), say, in the nature of ‘repayment of debt’, by business trust to unit holder to be taxed as ‘other income’ in hands of unit holders. Such distribution to be reduced by cost of acquisition where units are redeemed
► Carry forward of accumulated losses and unabsorbed depreciation allowed on merger of erstwhile public sector companies subsequent to strategic disinvestment by the Government or public sector company where merger takes place within five years from prescribed date
► Clarificatory amendment issued on assessment/ reassessment of modified return filed by successor pursuant to an order of business reorganisation issued by tribunals or courts
GST Changes:
► Filing of returns and statements will not be allowed after three years from the relevant due dates.
► Following transactions are to be treated as outside the purview of GST also for the period 1 July 2017 till 31 January 2019:
– Supply of goods from a place in non-taxable territory to another place in non-taxable territory without such goods entering into India
– Supply of warehoused goods before their clearance for home consumption
– High sea sales
► Input tax credit (ITC) will not be available for goods or services used in activities relating to Corporate Social Responsibility (CSR).
► Value of activities as may be prescribed in respect of warehoused goods before their clearance for home consumption will be considered as an exempt supply for common ITC reversal.
► Minimum threshold for launching prosecution will be increased from INR1 crore to INR2 crore except in case of issuance of invoice without supply.
► Place of supply of services of transportation of goods outside India will be:
– In case of registered recipient — location of recipient
– In case of unregistered recipient — location at which goods are handed over for transportation
► The condition of minimal human intervention will be removed from the definition of “Online Information and Database Access or Retrieval Services”, thus placing emphasis only on information technology required to provide such service.
► Taxpayers supplying goods through e-commerce operator will be eligible to opt for the composition scheme.
► Compounding amount, in case of offences, will be reduced between 25% to 100% of the tax amount.
► Following offences will be decriminalized:
– Obstructing or preventing any officer in discharge of his duties
– Tempering of material evidence
– Failure to supply information
Act wise changes –
CGST Act
Sec 10 – Composition dealers of goods in 10(2)& 10(2(A) are allowed to sell through ECO
Sec 16 – Where the payment has not been made to the supplier within 180 days the ITC is to be paid along with interest u/s 50 ( as against presently to be added to the output tax liability)
Sec 17(3) – In – Bond transfer is added to the scope of exempt supply for Rule 42/43 thereby increasing Scope of Reversal
Sec 17(5)(fa) added – Goods or services or both used for mandatory CSR activities are not eligible for ITC prospectively. For period before amendment will remain disputable issue
Sec 23 – Retrospective amendment has been made to provide that sec 23 shall prevail over sec 22 and sec 24. In other words wholly exempt suppliers need not go for registration.
Sec 37 – No GSTR1 can be filed after 3 years from its due date.
Sec 39 – No GSTR3B can be filed after 3 years from its due date.
Sec 44 – No GSTR 9 can be filed after 3 years from its due date.
Sec 52 – No TCS return can be filed after 3 years from its due date.
Sec 54(6)– 90% provisional refund may be given without reducing the amount of ITC provisionally accepted. (change is due to no concept of provisional ITC now Sec 41)
Sec 56 – Interest on delayed refund – manner and conditions and restrictions shall be provided by way of rules.
Sec 122 – sub section (1B) has been inserted to make ECO liable for penalties for 3 defaults pertaining allowing certain transaction through him and pertaining incorrect data in return
Sec 132 – Changes are made to remove certain activities liable for punishment.Clause g,j,k
Minimum Threshold raised to Rs. 2 crores from 1 crore for launching prosecution except Issuance of invoices without supply.
Sec 138 – Changes are made with regard to compounding of offence also compounding fees reduced.
Sec 158A– Consent Based Sharing of information by common portal with other systems.
Schedule III – Explanation with regard to High Sea sales, bond sales, Merchant Trading Transactions has been made effective from 01.07.2017. No refund can be claimed on account of this change.
IGST Act:
Sec 2(16) – Definition of non taxable online recipient has been changed (rationalised).
Sec 2(17) – in the definition of OIDR has been amended wherein “essentially automated and involving a minimal human intervention and” has been omitted.
Section 12(8)Proviso omitted related to POS as Destination of Goods for Transportation of Goods outside India due to ITC issues. For past Circular 184 issued.
Summary –
Important amendments proposed in Budget 2023 w.r.t. GST
1. Supplier of goods through Electronic Commerce operators will now be eligible to opt for composition Scheme.
2. Payment of tax along with interest u/s 50 in respect of ITC availed and payment not made to supplier within 180 days. Further third proviso to above sub-section also amended to specifically provide that upon payment made to supplier ITC can be availed.
3. Value of exempt supply for purposes of apportionment of credits shall include sale of warehoused goods to any person before clearance for home consumption.
4. ITC on CSR Expenses has now been specifically blocked u/s 17(5).
5. Persons exempt from registration u/s 23(1) i.e. persons engaged exclusively in the business of exempt supply of goods or services or an agriculturist, to the extent of supply of produce out of cultivation of land, need not take GST Registration u/s 22(1)/24 i.e. persons for compulsory registration.
6. Filing of belated GSTR-1/ 3B/ 9/ 9A/ 8 not beyond three years of due date.
7. Provisional refund eligible for provisionally accepted ITC so as to remove the reference to the provisionally accepted ITC to align the same with the present scheme of availment of ITC.
8. Manner will be prescribed for computing Interest on delayed refunds.
9. Penalty on Electronic Commerce Operators so as to provide for penal provisions applicable to Electronic Commerce Operators in case of contravention of provisions relating to supplies of goods made through them by unregistered persons or composition taxpayers.
10. Decriminalization of certain offences and increase in monetary threshold for launching prosecution.
11. Amendment in compounding of offences so as to simplify the language and procedure.
12. Consent based sharing of information furnished by taxable person.
13. Amendment in Schedule III to give retrospective applicability to Para 7, 8(a) and 8(b) of the said Schedule viz High seas Sale, Supply of warehoused goods before clearance and Supply by endorsement of documents of title before clearance for home consumption, with effect from 01st July, 2017, so as to treat the activities/ transactions mentioned in the said paragraphs as neither supply of goods nor supply of services.
14. Amendment in definition of non-taxable online recipient and online information and data base access or retrieval services.
15. Amendment in Place of Supply of services by way of transportation of goods
