A country is not just its soil, a country is its people.
04-Feb-2025
Direct Tax Proposals
- A Look at Personal Income Tax Reforms
- No Tax Upto ₹ 12,00,000 (₹12,75,000 in case of salaried tax payers and pensioners with standard deduction of ₹75,000)
- Change in income tax slab and rates
Particular |
Rates |
0-4 Lakh rupees |
Nil |
4- 8 Lakh Rupees |
5% |
8-12 Lakh Rupees |
10% |
12-16 Lakh Rupees |
15% |
16-20 Lakh Rupees |
20% |
20- 24 Lakh Rupees |
25% |
>24 Lakh |
30% |
- Reducing the Compliance Burden of TDS/TCS
- Tax deduction limit on interest for senior citizens increased from ₹ 50,000 to ₹ 1 lakh.
- The limit of TDS on rent increased from ₹2.40 lakh for to ₹ 6 lakh.
(The provisions of the higher TDS deduction will now apply only in non-PAN cases).
- Encouraging Voluntary Compliance
- Time-limit to file updated returns, extended from the current limit of two years, to four years.
- Reducing compliance burden
- Extending the Registration Validity Period for Small Charitable Trusts/ Institutions from 5 years to 10 years
- Tax payers to be allowed to claim the annual value of 02 self occupied properties (previously 01) without any conditions (previously conditions attached).
- Ease of doing business
- A proposed scheme will establish a three-year block period for determining the arm's length price of international transactions, streamlining transfer pricing processes and offering an alternative to annual reviews, consistent with international best practices.
- The scope of safe harbor rules is being expanded to reduce litigation and enhance certainty in international taxation
- The proposed amendments seek to establish parity in long-term capital gains tax rates applicable to the transfer of securities by resident and non-resident taxpayers.
- A proposal has been put forth to exempt withdrawals from National Savings Scheme accounts made on or after August 29, 2024. Similar treatment is proposed for NPS Vatsalya accounts, within established limits.
Indirect Tax Proposals
- Simplification of Customs Tariff Structure
The Finance Minister announced further simplification of the tariff structure by removing seven rates, This leaves remining eight rates in total, inclusive of a zero rate.
- An equivalent cess will be applied to maintain the effective duty incidence on most items, with a reduced cess on select items.
- Boost for Exports
Handicraft : The export timeframe for handicraft goods has been extended from six months to one year, with a possible three-month extension
Leather : a wet blue leather is fully exempt from BCD, And crust leather is exempt form 20% export duty
Marine Products: The Basic Customs Duty (BCD) on frozen fish paste (surimi) has been lowered from 30% to 5% to support the manufacture and export of fish and shrimp products.
Micro Small And Medium Enterprises
- Revision in MSME Classification Criteria
Classification Criteria For MSMEs increased by 2.5 times on investment limit and 2 times on Turnover Limit Respectively leaves as below
₹ In crore |
Investment |
Turnover |
|
Current |
Revised |
Current |
Revised |
Micro enterprises |
1 |
2.5 |
5 |
10 |
Small Enterprises |
10 |
25 |
50 |
100 |
Medium Enterprises |
50 |
125 |
250 |
500 |
- Credit Cards for Micro Enterprises: Customized credit cards, with a credit limit of ₹5 lakh, will be made available to micro enterprises registered on the Udyam portal. The initial issuance target is ten lakh cards within the first year.
- Initiatives for Emerging Entrepreneurs: A new scheme will provide term loans of up to ₹2 crore to 5 lakh first-time entrepreneurs, including women and members of Scheduled Castes and Scheduled Tribes, over the next five years.
- Enhanced Credit Provision with Guarantee Cover
₹ In Crores |
Credit Guarantee Cover |
|
Current |
Revised |
Startup’s |
10 |
20 |
MSE's |
5 |
10 |
MSMEs in Export |
For Term Loan Upto ₹20 crore |
- Steps for Labour-Intensive Sectors
To foster employment and entrepreneurial opportunities in labor-intensive sectors, Government is on plan to implement specific policy and facilitation measures.