UNION BUDGET
2024 -25

Topics
01

02

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Economic Survey

Non-Tax
Proposals

Direct Tax
Proposals

Indirect Tax
Proposals

Page 03

Page 11

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Economic
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State of Indian Economy• Indian economy grew by 8.2% in FY 2024.
• Factors that support economy growth are:o Reduction in Unemploymento Reduction in poverty
o Increase in labor force participation• Real GDP in 2024 raised by 20% than it was in 2020.
• In FY 2024, Gross Value Added (GVA) increased by 7.2%.
• Through skillful administration and monetary policies, retail inflation decreased from 6.7% in FY23 to 5.4% in FY24.
• Out if the total tax collected, 55% was from direct taxes and remaining 45% from indirect taxes.
• Improvement in Current Account Deficit (CAD): CAD was 0.7% of GDP in FY 2024 while it was 2.0% in FY 2023.

• Government has successfully provided foodgrains to 81.4 crore individuals.

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Price and Inflation•

The Central Government's timely policies and the Reserve Bank of India's efforts to stabilize prices kept retail inflation at 5.4%, thelowest since the pandemic.

•

In August 2023, the price of domestic LPG cylinders was reduced by INR 200 (USD 2.5) per cylinder across all markets in India, also
the prices of diesel and petrol reduced by INR 2 per liter.

•

In FY24, core consumer durables inflation declined due to an improved supply of key input materials to industries.

•

The agriculture sector encountered difficulties from severe weather conditions, reduced reservoir levels, and crop damage,
because of which food inflation rose from 6.6% in FY23 to 7.5% in FY24.

•

9 States and Union Territories recorded inflation below 6 per cent in FY24.

•

IMF forecasts inflation of 4.6 per cent in 2024 and 4.2 per cent in 2025 for India.

•

The RBI forecasts inflation to decline to 4.5% in FY25 and further to 4.1% in FY26, depending on a normal monsoon and no
unforeseen external or policy disruptions

Monetary
Management & Fi
nancialIntermediation•

India's banking and financial sectors have showed good performance, and the inflation rate was under control throughout the year.

•

Repo rate at 6.5% was maintained by Monetary policy committee (MPC) in FY 2024•

Scheduled Commercial Banks disbursed loans totaling INR 164.3 lakh crore (USD 2,042.5 billions) by March 2024, marking a 20.2% increase from the previous year.

•

Broad money (M3) grew by 11.2% as of March 22, 2024, up from 9% the previous year.

•

Industrial Credit Growth also increases from 5.2 to 8.5%.

•

In FY24, primary capital markets enabled capital formation of INR 10.9 lakh crore (USD 136.25 billion), roughly 29% of the gross fixed capital formation by private andpublic corporates in FY23.

•

Indian microfinance sector emerges as the second largest in the world after China.

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Medium-Term Outlook – A Growth Strategy for New India
Key Policy Focus Areas (Short to Medium Term)

Amrit Kaal Growth Strategy• Job and skill creation.

• Boosting private investment and expanding MSMEs.

• Maximizing the potential of the agriculture sector and managing India’s green
transition.

• Positioning agriculture as a growth engine and financing the green transition.
• Bridging the education-employment gap and building capacity of State.

• IMF forecasts inflation of 4.6 per cent in 2024 and 4.2 per cent in 2025 for India.
• Reducing inequality and enhancing the health quality of the young population.

Growth Target• Achieving a growth rate of 7% or higher requires a collaborative effort (tripartite
compact) between the Union Government, State Governments, and the private sector.

• By January 31, 2024, the total agricultural credit disbursed reached INR 22.84 lakh crore(USD 285.5 billions).

• Agriculture and allied sectors registered an average annual growth rate of 4.18% atconstant prices over the last five years.

• As of January 31, 2024, banks issued 7.5 crores Kisan Credit Card (KCC) with a limit of INR
9.4 lakh crores (USD 117.5 billions).

• Allied sectors of Indian agriculture are becoming robust growth centers and promisingsources for improving farm incomes.

• 90 lakh hectares covered under micro irrigation from 2015-16 to 2023-24 under Per Drop
More Crop (PDMC) program.
• It is estimated that each rupee invested in agricultural research (including education)
generates a return of INR 13.85.

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Employment and Skill Development: Towards Quality• Unemployment rate in India declined to 3.2% in 2022-23 reflects positive trends in thelabour market.
• Urban unemployment rate for ages 15 and above fell from 6.8% in Q1 of last year to
6.7% in Q1 of 2024.
• According to PLFS, the agriculture employs over 45%, manufacturing 11.4%, services
28.9%, and construction 13.0%.
• Youth unemployment rate decreased from 17.8% in 2017-18 to 10% in 2022-23.
• Two-thirds of new EPFO subscribers are aged 18-28 years, with net payroll additions
doubling to 13.15 million in FY24, growing at an 8.4% CAGR from FY15 to FY24.

• Manufacturing sector is less vulnerable to AI because industrial robots are not as agile
or cost-effective as human labor.
• Gig workforce projected to reach 23.5 million by 2029–30.
• Need to create about 7.85 million jobs annually in the non-farm sector until 2030 tomeet growing workforce demands.
• By 2050, the population in India is projected to increase from 507 million in 2022 to
647 million.
• A 2% of GDP direct public investment could generate 11 million jobs, with nearly 70%
benefiting women.

• Increasing Female labour force participation rate (FLFPR) for six years.
• In 2021-22, employment in organized manufacturing exceeded pre-pandemic levels,with per-factory employment also rebounding.
• From FY15 to FY22, rural wages grew at a 6.9% CAGR, compared to 6.1% CAGR in

urban areas. Factories employing over 100 workers grew by 11.8% from FY18 to FY22.
• Employment grew faster in larger factories (over 100 workers), showing a trend of
scaling up manufacturing.

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Services Sector – Fueling Growth Opportunities• The Gross Value Added of Services reached the level which was before pandemic i.e. about 55%.
•

India’s services exports accounted for 4.4% of global commercial services exports in 2022.

• Exports of computers and business services showed a YoY growth rate of 9.6% in FY 2024 and comprised about 73
percent of India’s services exports.
• Digital services exports global share rose to 6% from 4.4% (2019-2023).
• Outstanding credit is INR 45.9 lakh crore (USD 573.75 billions) in March 2024, with a YoY increase of 22.9%.
• 5.2% increase in passenger traffic from Indian Railway in FY 2024 as compared to previous year.
• 92 lakh foreign tourists arrived in 2023, with a YoY growth of 43.5%.
• In 2023, residential real estate sales were the highest since 2013, with a 33% growth and 4.1 lakh units sold in the
top eight cities.
• Indian e-commerce expected to exceed INR 28 lakh crore (USD 350 billion) by 2030.
• Tele-density increased from 75.2% (Mar 2014) to 85.7% (Mar 2024); internet density at 68.2%.
• 65% of active companies are in services; 16,91,495 active companies as of 31 st March 2024.

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Industry Sector• 5.2% annual growth in manufacturing sector over the last decade, led by chemicals, furniture, transport equipment, pharmaceuticals, machinery, and equipment.
• Increased coal production in the past five years reduced import dependence.
• Pharmaceutical market is the third largest by volume globally, valued at INR 4 lakh crore (USD 50 billion).
• India is second-largest manufacturer in clothing and a top-five exporter worldwide.
• India’s electronics accounts for 3.7% of the global market share in FY22.
• PLI Schemes attracted INR 1.28 Lakh Crore (USD 16 billions) in investments by May 2024, resulting in INR 10.8 Lakh Crore (USD 135 billions) in production/sales and over INR 8.5 Lakh crore (USD
106.25 billions) in job creation.
• Industry must incentivize R&D, innovate, and enhance workforce skills through collaboration with academia.

• Economic growth of 8.2% in FY24 was driven by a 9.5% rise in industrial growth.

Key Infrastructureand Economic
Developments in
India

•

Public Sector Investment plays a key role in funding large-scale infrastructure projects in recent years.

•

National Highway Construction has increased from 11.7 km/day in FY14 to 34 km/day in FY24.

•

Capital expenditure on railways increased by 77% in 5 years, with investments in new lines, gauge conversion, and doubling.

•

Indian Railways to introduce Vande metro trainset coaches in FY25.

•

New terminal buildings on 21 airports have been operationalized in FY24, increasing capacity by 62 million passengers annually.

•

India improved to 22nd in World Bank Logistics Performance Index in 2023, up from 44th in 2014.

•

Clean Energy Invested INR 8.5 lakh crore (USD 106.25 billions) invested between 2014 and 2023.

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Social Sector - Benefits that Empower• New Welfare Approach focuses on increasing the impact per rupee spent and digitization of healthcare, education, and governance acts as a force multiplier for welfare programs.
• Between FY18 and FY24, nominal GDP grew at a CAGR (Compound Annual Growth Rate) of around 9.5% and welfare expenditure grew at a CAGR of 12.8%.
• Over 34.7 crore (347 millions) Ayushman Bharat cards generated and the scheme covered 7.37 crore hospital admissions and 22 mental disorders covered under Ayushman Bharat– PMJAY health insurance.
• Nearly one lakh patents granted in FY24, compared to less than 25,000 in FY20.

India's External
Sector: Key
Highlights• India’s external sector remained robust amidst geopolitical challenges and persistent inflation.
• The current account deficit narrowed to 0.7% in FY24 due to lower merchandise imports and rising services exports.
• India’s share in global goods exports increased to 1.8% in FY24, up from an average of 1.7% during FY16-FY20.
• Services exports grew by 4.9% to INR 27.288 billion (USD 341.1 billion) in FY24, driven by IT/software and other business services.
• India received INR 9.6 lakh crore (USD 120 billion) in remittances in 2023, the highest globally.
• India’s external debt to GDP ratio stood at 18.7% at the end of March 2024.

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Non-Tax
Proposals

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Focus on 4 Major castes (Priorities of Viksit Bharat)(Poor, Woman, Youth and Farmer)
Productivity and resilience in Agriculture

Employment• Natural Farming: 1 crore (10 mn) farmers across the country will be• Scheme A First timers: One-month wage to new entrants in all formal

initiated into natural farming, supported by certification and branding insectors in 3 instalments up to INR 15,000 (USD 180 approx) which will be

next 2 years and 10,000 need-based bio-input resource centres to be

expected to benefit 210 lakh (21 mn) youth.

established.
• Shrimp Production & Export: Financing for Shrimp farming, processing
and export will be facilitated through NABARD.

• Digital Public Infrastructure for Agriculture (DPI): DPI for coverage of
farmers and their lands in 3 years, Digital crop survey in 400 districts andissuance of Jan Samarth based Kisan Credit Cards.

• Scheme B Job Creation in Manufacturing: Linked to first time employees
and Incentive to both employee & employer for EPFO contributions in thespecified scales for the first 4 years which will be expected to benefit 30

lakh (3mn) youth.
• Scheme C Support to Employers: Government will reimburse EPFO
contributions of employers up to INR 3,000 (USD 36 approx.) per monthfor 2 years for all new hires which will be expected to generate 50 lakh(5mn) jobs.

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Focus on 4 Major castes (Poor, Woman, Youth and Farmer)
Skilling Programme

Inclusive Human Resource Development and Social Justice• 20 lakh (2mn) youth will be skilled over a 5-year period.

• Plan for endowment-rich states in the Eastern parts covering Bihar,• 1,000 Industrial Training Institutes will be upgraded in hub and spoke
arrangements with outcome orientation.
• Course content & design aligned as per skill needs of industry
Employment• Loans up to INR 7.5 lakh (USD 9035 approx) with a guarantee from agovernment promoted Fund which will be expected to help 25,000
students every year
• Financial support for loans upto INR 1 million (USD 12000 approx) for
higher education in domestic institutions. Direct E-vouchers to 1 lakh

students every year. Annual interest subvention of 3%.

Jharkhand, West Bengal, Odisha, and Andhra Pradesh for the generationof economic opportunities to attain Viksit Bharat.
• Amritsar Kolkata Industrial Corridor with the development of an industrial
node at Gaya.
• Allocation of more than INR 3 lakh crore (USD 36.2 bn) for schemes

benefitting women and girls.
• Pradhan Mantri Janjatiya Unnat Gram Abhiyan: Improving the socioeconomic condition of tribal communities covering 63,000 villages
benefitting 5 crore (50mn) tribal people.

• More than 100 branches of India Post Payment Bank will be set up in the
North-East region.

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Focus on 4 Major castes (Poor, Woman, Youth and Farmer)
Andhra Pradesh Reorganization Act

Inclusive Human Resource Development and Social Justice• Financial support of INR 15,000 crores (USD 1.8 bn) will be• Credit Guarantee Scheme for MSMEs in the Manufacturing Sector.

arranged in FY 24- 25.
• Completion of Polavaram Irrigation Project ensuring foodsecurity of the nation.
• Essential infrastructure such as water, power, railways androads in Kopparthy node on the Vishakhapatnam-Chennai

Industrial Corridor and Orvakal node on HyderabadBengaluru Industrial Corridor.

• New assessment model for MSME credit.
• Enhanced scope for mandatory onboarding in TReDS.
• Mudra Loans: The limit was enhanced to INR 2 million (USD 24000 approx) from thecurrent INR 1 million (USD 12000 approx) under the ‘Tarun’ category.
• MSME Units for Food Irradiation, Quality & Safety Testing.
• Credit Support to MSMEs during Stress Period.
• Twelve industrial parks under the National Industrial Corridor Development Programme• Rental housing with dormitory-type accommodation for industrial workers in PPP modewith VGF support.

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Focus on 4 Major castes (Poor, Woman, Youth and Farmer)
Urban Development

Housing needs

Energy Security• Stamp Duty: Encouraging states to lower stamp duties for

PM Awas Yojana Urban 2.0:

PM Surya Ghar Muft Bijli Yojana:• Needs of 1cr (10mn) urban poor and• 1 crore (10mn)

middle-class families will be addressed

free electricity.

properties purchased by women.
• Street Markets: Envisioning a scheme to develop 100
weekly ‘haats’ or street food hubs in select cities.
• Transit

Oriented

Development:

Transit

Oriented

Development plans for 14 large cities with a population

above 30 lakh (3mn) Employment.
• Water Management: Promote water supply, sewage
treatment and solid waste management projects andHouseholds obtainwith an investment of INR 10 lakh crore• Up to 300 Units every month.

(USD 120 bn).

• 1.28 crore (12.8 million) Registrations• Enabling policies and regulations for

efficient and transparent rental housing

and 14 lakh (1.4 million) applications

so far.

markets with enhanced availability will
also be put in place.

services for 100 large cities through bankable projects.

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Focus on 4 Major castes (Poor, Woman, Youth and Farmer)
Infrastructure

Irrigation and Flood Mitigation

Tourism• Provision of INR 11,11,111 crore• Financial support for projects with an• Development of Vishnupad Temple Corridor and(USD

133.86bn

approx.)for

infrastructure (3.4% of GDP).
• INR 1.5 lakh crore (USD 18.75 bn
approx.) to states as long-term
interest-free

loans

to

supportresource allocation.
• Phase IV of PMGSY will be launchedto provide all-weather connectivity
to 25,000 rural habitations.

estimated cost of INR 11,500 crore (USD

Mahabodhi Temple Corridor modelled on Kashi Vishwanath

1.38 bn approx.) such as the Kosi-Mechi

Temple Corridor.

intra-state link and 20 other ongoing andnew schemes.

undertaken which holds religious significance for Hindus,• Assistance for flood management andrelated projects in Assam, Sikkim &Uttarakhand.
• Assistance• Comprehensive development initiative for Rajgir will be
Buddhists and Jains.

• The development of Nalanda as a tourist centre besides
reviving Nalanda University to its glorious stature.

forreconstruction

rehabilitation in Himachal Pradesh.

and• Assistance to development of Odisha’s scenic beauty,
temples, monuments, craftsmanship, wildlife sanctuaries,
natural landscapes and pristine beaches making it anultimate tourism destination.

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Employment and Education
Employment Linked Incentive• The government will implement three

Participation of women in
the workforce

Skilled Programme• A new centrally sponsored scheme will skill 20 lakh (2mn) youth'Employment Linked Incentive' schemes• Enhance women's workforce

over 5 years, upgrade 1,000 Industrial Training Institutes, andunder the Prime Minister's package, based

participation by setting upalign courses to industry needs under the Prime Minister’son EPFO enrolment, to support first-timeworking women hostels,

package.

employees, and aid both employees andestablishing creches, organizing• Skilling Loans: The Model Skill Loan Scheme will be revised to

employers.

women-specific skilling

facilitate loans up to INR 7.5 lakh (USD 9035 approx.) for

programs, and promoting

students with a guarantee from a government-promoted Fund.

• The government will reimburse employers
up to INR 3,000 (USD 36 approx.) per

market access for women SHG

month for 2 years based on their EPFO

enterprises.

• Education Loans: The government has announced financial
support for loans up to INR 1 million (USD 12048 approx) for

contribution for each additional employee

higher education of students in domestic institutions. E-

with a salary up to INR 1 lakh (USD 1200

vouchers will be given directly to 1 lakh (100,000) students

approx.), aiming to create 50 lakh (5mn)every year for an annual interest subvention of 3% of the loan

jobs.

amount.

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Infrastructure and Productivity
E-Commerce Export
Hubs
E-Commerce Export Hubs,
through public-privatepartnership (PPP) mode
will help small businesses
and artisans sell theirproducts abroad byproviding all the necessary
trade and logistics services
in one place.

Government toDevelop InvestmentReady Industrial
Parks

Boost of Services
Sector Productivity
and Innovation

Private Investment
in Infrastructure

Boost in Capital forGreen Transition

Viability gap funding and

A new taxonomy for

The government will

enabling policies, along

climate finance will be

The government willdevelop scalable Digitalwith a market-based

developed to increase

create fully-equipped

Public Infrastructure (DPI)

financing framework, willcapital availability for“plug and play” industrial

applications acrossbe introduced toclimate adaptation andparks in 100 cities with themultiple sectors to boost

encourage private sector

mitigation, supporting thehelp of state and private

productivity andinvestment incountry’s green transition

sector partners, utilizing

innovation through private

infrastructure.

and climate commitments.

improved town planningsector involvement.

schemes.

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Other Fiscal Measures
Simplified FDI andODI Rules

Jan Vishwas Bill 2.0 andState Incentives

Digital Public Infrastructure
for Agriculture

Simplified rules for Foreign Direct

Enhanced Technology
Adoption to Drive
Economic Digitalization

The Jan Vishwas Bill 2.0 and state

The government will implement

Investment and Overseas

Building on a decade ofincentives for implementing

Digital Public Infrastructure (DPI) in

Investments will facilitate foreigntechnological advancements,

Business Reforms Action Plans andagriculture, covering 6 crore

investments, encourageincreased public and private

digitalization aim to enhance thefarmers and their lands within 3prioritization, and promote the use

investment will further digitalize

ease of doing business.

years, starting with a digital cropof Indian Rupee in international

the economy and improve accesssurvey for Kharif in 400 districts

transactions.

to market resources, education,and issuing Jan Samarth-based

and services for all citizens.

Kisan Credit Cards in 5 states thisyear.

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Other Fiscal Measures
Support for
promotion of
MSMEs

New assessment
model for MSME
creditCredit Support to
MSMEs during
Stress Period

This budget focuses on

Credit Guarantee
Scheme for
MSMEs in the
Manufacturing Sector

Public sector banks will

A new mechanism will

MSMEs and labor-

A new credit guarantee

develop in-housesupport continued bankintensive manufacturing

scheme will facilitate

capabilities and a new

credit to MSMEs duringwith a comprehensive

collateral-free term loans for

credit assessment modelstress periods withpackage including

MSMEs to purchase

based on digital footprints

government fundfinancing, regulatory

machinery, offering up to INR

to better evaluate MSMEs

guarantees to preventchanges, and technology

100 crore (USD 12.05 mn

for credit, covering thosethem from becoming

support to boost growth

approx.) in guarantee cover

without formal accounting

NPAs.

and global

through a self-financing

systems.

competitiveness.

guarantee fund.

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Mudra Loans
The limit of the Mudra
loans is enhanced to INR
2 million (USD 24,000
approx.) from the current

INR 1 million (USD
12,000 approx.) under
the 'Tarun' category for
those entrepreneurs who
have successfully repaid
previous loans under the'Tarun' category.

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Direct Tax
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Income Tax
Personal Tax Proposal
Revision in Income Tax Slab under new tax regime• It has now been proposed to amend the income tax slabs rates under
the Section 115BAC.
• Proposed Income slab is reproduced below:
S. No.

Total Income

Enhancement of limit of standard

Income from letting out of residential property is

deduction under new tax regime

covered under House property• With the aim of encouraging and• There has been ongoing litigation over the

incentivizing the tax payers, it hasreporting of income from letting out of residential

been proposed to increase thehouse property.

Rate of Tax

standard deduction to INR 75,000• It has now been proposed to insert an explanation

1.

Up to INR 3,00,000

Nil(USD 938 approx) as against INR

which states that any income to owner of house2.

From INR 3,00,001 to INR 7,00,000

5%50,000 (USD 625 approx) earlier

from letting out of residential property shall be

3.

From INR 7,00,001 to INR 10,00,000

10%with effect from 1st April 2025.

chargeable under the head “Income from house4.

From INR 10,00,001 to INR 12,00,000

15%• It is important to note that there isproperty” and not chargeable under the head5.

From INR 12,00,001 to INR 15,00,000

20%

6.

Above INR 15,00,000

30%

no change for standard deduction in
old tax regime.

“PGBP” w.e.f. 1st April 2025.
• The proposed amendment would overrule someof the landmark rulings including “Chennai• The proposed slab rate would be applicable from 1st April, 2025 andaccordingly shall apply for AY-2025-26 and subsequent years.

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Properties&

InvestmentsLtd.

[2015]

56

taxmann.com 456 (SC)”.

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Income Tax
Personal Tax Proposal
Increase in amount allowed as deduction for National Pension Scheme (NPS) under Section 80CCD(2)• Section 80CCD(2) allows employees to claim deductions for employer’s contribution to the Central Government Pension
Scheme, up to the limit of 10% of the employee's salary.
• The Budget 2024 proposes to enhance the limit upto 14% of the employee's salary for those opted for the new tax regime.
• This amendment will be effective from 1st April, 2025 applicable for AY 2025-26 and onwards.

Proposed changes in Exemption Limitof Family Pension• Earlier, the maximum deduction
related to family pension under
Section 57 was limited to INR 15,000(USD 187 approx).
• Now, it is increased from INR 15,000(USD 187 approx) to INR 25,000 (USD

AKM MEDIA APPEARANCE:

312 approx) w.e.f. 1st April 2025.

Amit Maheshwari, Tax Partner, AKM Global quoted in The Hindu:“The amount of employer contribution allowed as deduction has been enhanced from 10 per cent to 14 per cent of thesalary of the employee. This will further boost the option of NPS by employees as a retirement kitty and resultant
contributions. However, this will only be allowed to employees who opt for new tax regime and hence this shows theintention of the government to further strengthen the position of new tax regime as preferred and default regime.”
Please click here for the link

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Direct Tax Proposals

Income Tax
Corporate Tax Proposal
Reduction in tax rate in case of foreigncompany• It is proposed to reduce the tax rate

Angel tax is no longer applicable for all investors• Section 56(2)(viib) states that any shares issued by aclosely held company to any person at a price thatIndia proposes a simplified tax regime for foreign shipping companies

operating cruises within the country.
• A new presumptive taxation regime under Section 44BBC is beingfrom 40% to 35% in case of foreign

exceeds the Fair Market Value, the difference between

proposed for a non-resident which deems 20% of the aggregatecompanies.

such price and FMV shall be taxable under "Income

amount received/ receivable by, or paid/ payable to the non-resident

from Other Sections".

cruise-ship operator, along with exemption to income of a foreign• This amendment will be applicablefrom 1st April,2025 and shall apply• It has been proposed that such differential amountaccordingly for AY-2025-26 andshall not be taxable in the hands of investee w.e.f. 1st

subsequently.

April, 2025.

• This would reduce the disparity of tax• This would help in doing away with several

rate between a branch set up by acomplexities and litigations with respect to capitalforeign company vis-à-vis a subsidiary.

infusion for privately held companies including startups.

company from lease rentals, if such foreign company and the nonresident cruise ship operator have the same holding company.
• The aim is to make India an attractive cruise tourism destination, toattract global tourists to cruise shipping in India and to popularize
cruise shipping with Indian tourists.
• Now onwards, Section 44B relating to presumptive taxation forshipping business of non-residents, shall therefore, no longer apply tocruise-ship business.
• This amendment will come in effect from 1st April 2025.

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Direct Tax Proposals

Income Tax
Capital Gain Tax Proposal
Simplification and rationalization of taxation of Capital Gains
Section

112

112A

111A

Particulars
All long-term assets including(immovable property, precious
metals & unlisted shares) notcovered in 112ALong Term Gain arising fromtransfer of listed equity shares,
units of equity-oriented funds,
or units of business trusts.
Income by way of short-term
capital gains arising from thelisted equity shares, units ofbusiness trust, equity oriented
funds.

Note:

Taxpayer

Existing Tax Rate

Proposed Tax Rate

Resident or Domestic
Company

20%

12.50% without
indexation

Non-Resident or Foreign
Company

20% with Indexationor 10% without
indexation

12.50% without
indexation• It is noteworthy to mention the concept of indexation
has completely removed.
• It has been proposed to enhance the exemption limit
from long-term capital gains u/s 112A from INR
1,00,000 (USD 1204 approx.) to INR 1,25,000 (USD
1506 approx.).
• The previous rates are applicable till 22rd July, 2024

Any person

10% without
indexation

12.50% without
indexationand the current rates are applicable commencing 23rdJuly, 2024.
• It is proposed that there will only be two holding
periods, 12 months and 24 months for determination

Any person

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15%

20%

of LTCG/STCG. Therefore, the period of holding for thelisted shares/listed business trust would be 12 months
and for other capital assets is 24 months.

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Income Tax
Capital Gain Tax Proposal
Revised tax rate for capital gain in the hands of non-resident to bring the parity vis-a-vis residents.
SectionParticulars

Taxpayer

Existing Tax Rate

Proposed Tax Rate

115AB

Income by way of long-term capital gains arising from thetransfer of units purchased in foreign currency

Overseas financial organisation

10% without Indexation

12.50% without indexation

115AC

Tax on income by way of long-term capital gains arising from thetransfer of bonds of an Indian company or Global Depository
Receipts as notified by Central Government.

Non-Resident

10% without Indexation

12.50% without indexation

115ACA

Resident and an employee of an IndianTax on income by way of Long term capital gains arising from the company or its subsidiary engaged intransfer of Global Depository Receipts
specified knowledge based industry orservice.

10% without Indexation

12.50% without indexation

115AD

Tax on income of Foreign Institutional Investors by way of shortterm or long-term capital gains arising from the transfer of
specified securities.

Foreign Institutional Investors

10% without Indexation(Long Term)

12.50% without indexation (Longterm)

15% (Short term)

20% (Short term)

Income from long-term capital gains of an asset other than aspecified asset

Non-Resident Indian

10% without Indexation

12.50% without indexation

115E

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Income Tax
Capital Gain Tax Proposal
Addition of unlisted bond and unlisted debenture in capital asset under Section 50AA and Change inAmendment in the definition of Fair market value under section 55

definition of Specified Mutual Fund• Cost of Acquisition of long term capital asset, being an equity sharein a company or a unit of a mutual fund or a unit of a business trust
shall be higher of-• Section 50AA of the Act provides that the capital gain arising from the transfer/ redemption/maturityof a unit of Specified Mutual Fund or a Market Linked Debenture acquired on or after 1st April, 2023
shall be treated as Short Term Capital Gain irrespective of Period of Holding.
• Specified mutual fund is a mutual fund that invests not more than 35% of its proceeds in equity sharesof Indian companies.
• It has been proposed to include unlisted bonds or unlisted debentures which are transferred orredeemed or matures on or after the 23rd July, 2024 in the list of capital assets.
• Additionally, the definition of Specified Mutual Fund has been substituted with the new definition,
where Specified Mutual Fund means:• a mutual fund that invests more than 65% of its proceeds in debt and money market instruments,or• another fund which invests 65% or more of its proceeds in the units of mutual fund mentioned
above.

Ranked consistently in International Tax Review’s World Tax and World Transfer Pricing Guides (2017-2024)• Cost of acquisition of such asset, and• Lower of fair market value of such asset and full value ofconsideration received or receivable• It is proposed to amend the explanation to include that in a casewhere the capital asset is an equity share in a company, which is
not listed on a recognized stock exchange as on 31 January 2018,
but listed on such exchange subsequent to the transfer, fair market
value would be proportionate to the cost of acquisition, using thecost inflation index (CII) for FY 2017-18 relative to the CII for the
first year the asset was owned by the taxpayer.

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Income Tax
Tax Proposal
Amendment in Taxation on Buyback of shares.

Increase in contribution limit to pension Scheme• Section 115QA deals with taxation of the income by the way of buy back of shares of a company froma shareholder. Company was required to pay a tax at the rate of 20% plus applicable surcharge andcess and gains in hands of shareholder was exempted.

• It is proposed that amount contributed by an employer towards
the pension scheme shall be allowed as an expense if it does notexceed 14% of the salary of the employee. Earlier this limit was
10%.

• Now it has been proposed that Section 115QA will not be applicable for the buy-back of the shareswith effect from 1st October, 2024.

• Meaning thereby, amount distributed on buy back of shares will now be treated as deemed dividendin the hands of the shareholders under newly inserted Section 2(22)(f) and would be taxed under thehead “Income from other sources” at the applicable slab rates.
• The amendment to Section 46A stipulates that the value of consideration received from the buybackof shares will be deemed to be nil. Consequently, the cost of acquisition for these shares will berecognized as a capital loss, which can be set off against future capital gains.

• Any expenses incurred by the shareholder during buy back of shares would not be allowed to claim it
as a deduction from Income from other sources under Section 57.
• This will benefit foreign investors as they could be eligible for treaty relief and tax credit in their homejurisdiction.

Ranked consistently in International Tax Review’s World Tax and World Transfer Pricing Guides (2017-2024)• This amendment will come in effect from 1st April 2025.

Increase in Amount paid as remuneration to working partners• Section 40(b)(v) of income tax states that the amount allowed as
an expenditure is paid as remuneration to the working partner. It is
proposed to increase this limit to INR 6,00,000 (USD 7,225 approx.)
in case of profit and INR 3,00,000 (USD 3615 approx.) in case ofloss.
• This amendment will come into effect from 1st April 2025.

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Income Tax
Tax Proposal
Extending the ambit of Lower Withholding Certificate for

Inclusion of foreign withheld taxes in total

Time Limit for correction of TDS and TCS

deduction/collection of Tax at source

income calculation

Statements• Section 197 provides that payments on which tax is required to
be deducted under certain sections are eligible for certificate fordeduction at lower rate. However, this does not include section
194Q which requires buyers to deduct 0.1% tax on purchases
exceeding INR 50 lakhs (USD 60 thousand approx.) in a year.

• Section 198 provides that sums deductedunder TDS provisions are considered income
received for the calculation of total income,however it was seen that some assesses are
not including the income taxes withheld
outside India but credit for foreign taxes
withheld was being taken.

• Section 200 and section 206C prescribes the time
limit for furnishing statements detailing the TDS
and TCS respectively. However, there is no time
limit for furnishing correction statements and may
be revised multiple times.

• Section 206C(9) provides that sums on which tax is required to becollected are eligible for collection of tax at lower rate. However,this does not include section 206C(IH) which requires sellers tocollect 0.1% tax on sales exceeding INR 50 lakhs (USD 60
thousand approx.) in a year.
• Now it has been proposed to include section 194Q and section
206C(IH) to be eligible for application of lower
deduction/collection certificates. It would prevent theunnecessary blockage of working capital.

• It has been proposed to include the income
tax withheld outside in the computation of
total income to prevent under reporting of
total income and claiming double benefit.
This amendment shall take effect from 1st
April, 2025.

• It is proposed that no correction statement shallbe submitted after the expiry of six years from theend of the financial year in which the originalstatements were delivered. This amendment shalltake effect from 1st April, 2025.
• Now onwards, such statements cannot be revised
indefinitely and therefore such provision cannot
be misused leading to correct reporting of data in
TDS/TCS statement.

• This amendment will take effect from 1st October, 2024.

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Income Tax
Tax Proposal
Reduction in time limit for orders deeming assessee inInterest on late deposit of tax collected

Expansion of TCS on high-value goods

default• Section 206C(7) provides that in case of any delay,interest shall be calculated @ 1% per month or part
thereof from the date on which TCS was collectible todate on which TCS is actually paid.

• Section 206C(IF) provides that a seller whose turnoverexceeds INR 1 crores (USD 1,20,000 approx.) (50 lakhs(USD 60 thousand approx.) in case of profession) in
the preceding financial year is required to collect the
TCS at the rate of 1% from the sale of motor vehicle ofthe value exceeding INR 10 lakh (USD 12,000 approx.)• Section 201(3) provides a time limit of seven years fororder deeming a person to be an assessee in default
for failure to deduct the tax (whole or part) where thepayee is a person resident in India. Section 206C(6A)
provides that a person fails to collect tax or fails to pay
after collecting considered to be an assessee in
default.
• It has now been proposed that no person considered
as assessee in default for failure to deduct/collect tax
from any person after the completion of six years
from the end of the financial year in which payment ismade or credit. This amendment shall be applicable toboth resident and non-residents and will be effectivefrom 1st April, 2025.

• It has now been proposed that interest rate for late
TCS payments to 1.5% per month or part thereof
which ensures consistency and alignment withinterest rates applicable on late deposit of tax
deducted at source. This amendment shall take effectfrom 1st April, 2025.

Ranked consistently in International Tax Review’s World Tax and World Transfer Pricing Guides (2017-2024)• Now, it has been proposed to extend this levy to othergoods exceeding INR 10 lakh (USD 12,000 approx.), as
notified by the Central Government.
• The amendment will take effect from 1st January,
2025.

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Other Tax Proposal
Consequences of non-filing of 49C

Income arising to NR from Units ofIncome in relation to transfer of asset for Unit ofIncome of specified person arising fromby Liaison office of non-residents in

an IFSCan IFSC

investments made in India

India• As per section 10(4F), any royalty
or interest income arising in thehands of a non-resident received
from a Unit of an IFSC on accountof the lease of an aircraft or aship shall be exempt from tax.

• Section 80LA of the Act provides for deduction
in respect of certain incomes of Offshore
Banking Units and the International Financial
Services Centre (IFSC).

• Section 10 (23FE) of the Act states thatthe income of a specified person in thenature of dividend, interest, or longterm capital gains arising frominvestment made in India shall be
exempt from tax.

• Every person being a nonresident having a liaison office inIndia is required to file Form 49C(i.e. annual statement) withinsixty days from the end of thefinancial year.
• It has now been proposed that
failure to furnish a statement
may attract a penalty of INR
1,000 (USD 12 approx.) for eachday during the period which
default continues accordingly.

• The above deduction shall beallowed only if such IFSC unit has
started its operations on or
before 31st March 2024.
• It has been proposed to extend
this date by one year to 31st
March 2025.

• This will be effective from 1st
April 2025.

Ranked consistently in International Tax Review’s World Tax and World Transfer Pricing Guides (2017-2024)• It includes any income arising from thetransfer of an asset, being an aircraft or a ship,that was leased by an IFSC unit to a person.
• The said deduction shall be allowed to those
IFSC units that have commenced theiroperation on or before the 31st March 2024.

• It has been proposed to extend the period ofcommencement of operations from 31st
March 2024 to 31st March 2025 (i.e.,
extended by one year).

• It has been proposed to increase thistime limit for investment by one year
i.e., till 31st March 2025.
• Specified persons include a wholly
owned subsidiary of the Abu Dhabi
Investment Authority, a Sovereign
Wealth Fund, and a Pension fund,subject to satisfaction of the prescribed
conditions.

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Income Tax
Other Tax Proposal
TDS on Interest on Securities of Central

Relief on Tax Deduction at source at

Meaning of “Work” under section

Clarification on sale consideration under

Government or State Government

the time of payment on repurchase

194C

section 194-IA• Clause (iv) of Section 193 provides that no
TDS shall be deducted on Interest received
on securities of the Central Government.

of units by Mutual Funds or Unit

• As per clause (iv) of explanation tosection 194C, there is an exclusionfrom the definition of “work”;
manufacturing or supplying a
product according to therequirement or specification of acustomer by using materialpurchased from a person, other thansuch customer or associate of suchcustomer.

• TDS shall not be deductible if theamount of sale consideration or Stamp
Duty Value of immovable property(other than agriculture land) is less thanINR 50 lakh (USD 60,000 approx.).

• Further, it is provided that this exemption
shall not apply to interest exceeding INR
10,000 (USD 120 approx.) payable on 8%
Savings (Taxable) Bonds, 2003 or 7.75%
Savings (Taxable) Bonds, 2018 during thefinancial year.

Trust of India• The person paying any amountfor repurchase of units by Mutual
Funds or Unit Trust of India wasliable to deduct TDS at the rate of20%.
• Now this section has been
omitted w.e.f. 1st October 2024.

• This exemption has been extended w.e.f.
1st October 2024 and Floating Rate Savings
Bonds, 2020 (Taxable) has been added.
Hence, TDS under section 193 shall also
apply to such bonds.

Ranked consistently in International Tax Review’s World Tax and World Transfer Pricing Guides (2017-2024)• Further, in addition to the above
exclusion, it has been proposed to
exclude any sum referred to in subsection (1) of section 194J. This will
be effective from 1st October 2024.

• It has been clarified w.e.f. 1st October
2024, that, in case where there is morethan one transferor or transferee inrespect of an immovable property, theconsideration shall be aggregate of theamounts paid or payable by all thetransferees to the transferor.

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Tax Proposal
TDS on Salary, remuneration, commission, bonus and interest paid to partner byCredit for TCS of minor in parent’s hand

Partnership Firm/LLP• Earlier there was no provision for allowing credit of TCS to any other person (eg.
parent) other than the collectee.

• Earlier there was no provision for deducting tax at source on payment of salary,
remuneration, interest, bonus or commission by partnership firm to partners.
• Section 194T has been proposed for the deducting tax at source on the abovementioned payments by a partnership firm to partners of the firm.

• The rate of TDS is 10% of such salary, remuneration, interest, bonus or commission
with a threshold limit of INR 20,000 (USD 240 approx.).

• An amendment to section 206C is proposed in Budget 2024 which allow the credit of
TCS by parents for their minor’s children transaction.
• However, credit of TCS of the minor shall only be allowed where the income of theminor is being clubbed with the parent.
• This section will be effective from 1st January 2025.

• This section will be effective from 1st April 2025.

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Tax Proposal
SectionParticulars

Existing Tax Rate

Proposed Tax Rate

194DA

Payment in respect of Life Insurance Policy.

5%

2%

194G

Commission etc. on sale of lottery tickets.

5%

2%

194H

Commission on brokerage.

5%2%

194-IB

Payment of rent by certain individuals or Hindu Undivided Family.

5%

2%

194M

Payment of certain sum by certain individuals or Hindu Undivided Family.

5%

2%

194O

Payment of certain sum by e-commerce operator to e-commerce participant.

1%

0.1%

196B

Income from units purchased in foreign currency

12% (on LTCG) and 10% onincome other than LTCG

12.5% (on LTCG) and 10% onincome other than LTCG

196C

Income from Foreign currency bonds or shares of Indian company

10% (on LTCG) and 10% onincome other than LTCG

12.5% (on LTCG) and 10% onincome other than LTCG

• Decrease in TDS rates could lead to increasing of revenue cash flow in the hands of recipient. This would be welcome move by the ministry of finance.
• Effective date of the rates of section 194DA, 194G, 194H, 194-IB, 194M, 194O is 1st October 2024 and 23rd July 2024 for 196B and 196C.

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Tax Proposal
Amendment to the Finance Act 2004 in chapter VII, in Section 98 with respect toWithdrawal of Equalization Levy 2.0 introduced by the Finance Act 2020

Security transaction tax on sale of future and Options in Securities. (applicable from 1st• Chapter VIII of the Finance Act, 2016 related to equalisation levy was amended by
Finance Act, 2020 to provide for imposition of equalization levy (EL) of 2% on theamount of consideration received/ receivable by an e-commerce operator from ecommerce supply or services.

day of October, 2024)• Earlier, the STT on the sale of an Option in securities was "0.0625 per cent”. Now, after
the amendment, the new STT will be "0.1 per cent." This means the STT for selling an
option will be slightly higher than it was before.
• Similarly the STT on the sale of a futures in securities was “0.0125 per cent”. This has
also been increased to “0.02 per cent”.

• Some stakeholders have expressed concerns about the unclear scope and compliancechallenges of the 2% equalisation levy. Therefore, this levy has been withdrawn witheffect from 1st day of August, 2024.
• Consequently as the 2% levy is being made inapplicable, income which is exempt
under section 10(50) earlier shall no longer be exempt on or after 1st day of August,2024.
• Hence, the taxation of such income shall revert back to taxation as Royalty/FTS.

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Tax Proposal
Transition from Dual Trust Exemption to Unified Trust Exemption

Condonation of Delay in Trust/Charitable Organization Registration Applications• Earlier there were two separate regimes for trust exemptions as mentioned under
section 10 (23C) (first regime) and sections 11 to 13 (second regime). Both theregimes intend to grant similar benefit to the trust and charitable organisation.

• Trusts/institutions must apply for registration under section 12AB within specified
timelines. Delays may lead to taxation on accreted income or permanent exit from theexemption regime. Section 80G has specific timelines for approval applications forfunds/institutions.

• In order to simplify the procedures and to reduce administrative burden, it has been
proposed to merge two tax exemption regimes for charitable trusts into one, bystating that the first regime for trusts, funds, or institutions to be merged andtransited to the second regime in a gradual manner.
• The above changes in the provision will take effect from the 1st October, 2024.

Ranked consistently in International Tax Review’s World Tax and World Transfer Pricing Guides (2017-2024)• It has been proposed that Principal Commissioner can now condone delays in filing
application provided reasonable cause exist. Timelines for section 80G approval
applications will also be rationalized to prevent unintended exits.
• The above changes will take effect from 1st October,2024.

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Assessment, Reassessment, Appeal and Penalty
Streamlining the procedures for Income escaping assessmenti

Substitution of Section 148 and Section 148A of theAct• Existing provision of Section 148 of the Act in conjunction withii

Reduction of Time limit for issuance of notice [section 149 of the Act]​

assessment or reassessment which states that before making

Section 149 specifies the timeframe within which such notices must be issued and calculates the period oflimitation under different circumstances. Budget 2024 proposes to amend the time limit provided in Section 149
as under-the assessment or reassessment under section 147 (in caseParticulars

where income has escaped assessment), the Assessing Officer

Time Limit for Notice issuance of notice under section 148A

section 148A of the Act provides for the procedure ofshall conduct inquiry and serve on the assessee a notice, alongwith a copy of the order passed under section clause(d) of
Section 148A of the Act.
• With effect from 1st day of September 2024, Budget
2024 proposes to substitute new sections for Section 148 and
148A of the Act. However, no material changes have beenbrought in newly substituted section

Existing provision

Proposed Amendment

Normal Case i.e., income escaping
assessment amount is < 50 lakh.

No specific provision

3 years from the end of the relevant
assessment year.

Specific Case i.e., income escaping
assessment amount is >= 50 lakh.

No specific provision

5 years from the end of the relevant
assessment year.

Time Limit for Notice issuance of notice under section 148
Normal Case i.e., income escaping
assessment amount is < 50 lakh

3 years from the end of the relevant
assessment year.

3 years and 3 months from the end of therelevant assessment year.

Specific Case i.e., income escaping
assessment amount is >= 50 lakh.

10 years from the end of the relevant
assessment year.

5 years and 3 months from the end of therelevant assessment year.

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Specified authority for the purposes of section 148 and section 148A (Section 151)
• Budget 2024 proposes to replace the existing Section 151 of the Income Tax Act with a new provision. The aim of this amendment is to reduce the administrative burden on the AO
with respect to the approval required for reopening the assessment.
• Specified authority for the purposes of section 148 and section 148A is as underParticulars

Earlier Provision

If 3 years or less than 3 years from the end of therelevant assessment year.

Principal commissioner, Principal Director,
Commissioner, Director.

If more than 3 years from the end of the relevant
assessment year

Principal Chief Commissioner, Principal Director
General, Chief Commissioner, Director General

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Proposed Amendment

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Insertion of Sub-section 3 and 4 to the Section 152 relating to Other Provisions.

iSub-section 3 to the section 152 of The Income Tax Act, 1961

ii

Sub-section 4 to the section 152 of The Income Tax Act, 1961

• Budget 2024 proposed rationalisation of assessment or reassessment procedures by• To clarify that the proposed changes in section 147 to 151 shall not apply to case in

substituting 148 and 148A of the Act and reducing the time limit provided in Section

which notice under section 148 has been issued or an order under clause (d) of

149 and 151.

section 148A has been passed, on or after the 1st day of April, 2021 but before the 1st• To clarify that the proposed changes in section 147 to 151 shall not apply to case inwhich search has initiated under section 132 or requisition is made under section
132A or a survey is conducted under section 133A on or after the 1st day of April,
2021 but before the 1st day of September, 2024, Sub-section (3) to the section 152
has been inserted.

day of September, 2024, Sub-section (4) to the section 152 has been inserted.​• In other words, the amended section 147 to 151 shall apply as they stood immediately
before the commencement of the Finance (No. 2) Act, 2024.​• This amendment will take effect from the 1st day of September, 2024.​• In other words,section 147 to 151 shall apply as they stood immediately before thecommencement of the Finance (No. 2) Act, 2024.

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Section 153 in relation to “Time limit for completion of assessment, reassessment and recomputation.

i

Insertion of Sub-section 1B to the section 153 of The Income Tax Act, 1961

ii

Insertion of section 250 among other sections to the sub-section (3) of thesaid section• Sub-section (1) of the said section provides that assessment under section 143 or section 144 shall be• Sub-section (3) of the said section provides the time-limit for passing the fresh assessment order incompleted within twelve months from the end of the assessment year in which the income was first

pursuance of an order under section 254 or section 263 or section 264 setting aside or cancelling anassessable. Earlier this sub-section did not include any time limit for order of assessment of cases whereassessment. It further provides that such fresh assessment order shall be passed at any time before thereturn of income is furnished in consequence of an order under clause (b) of sub-section (2) of section

expiry of twelve months from the end of the financial year in which the order under section 254 is

119.

received by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or• Budget, 2024 proposed to insert a new sub-section (1B) in the said section to provide that order ofassessment of cases where return of income is furnished in consequence of an order under clause (b) of
sub-section (2) of section 119 may be completed within twelve months from the end of the financial
year in which such return is furnished.
• Further, the existing provisions of the section 139 prescribe, inter-alia, that every person, being a

Commissioner or, as the case may be, the order under section 263 or section 264 is passed by the
Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, as thecase may be.
• Earlier there was no provision for fresh order in pursuance to order passed u/s 250 of the Act.
• The Budget proposed to insert the reference to section 250 in the said sub-section in order to provide

company or a firm, or being a person other than a company or a firm whose total income exceeds thethe time-limit for disposal of cases which are separately proposed to be set aside by the Commissioner

maximum amount which is not chargeable to income-tax, shall, furnish a return of his income. In this(Appeals).

regard, consequential amendment is proposed in the said section to provide that where any return ofincome is furnished in pursuance of an order under clause (b) of sub-section (2) of section 119, theprovisions of this section 139 shall apply.

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Section 153 in relation to “Time limit for completion of assessment, reassessment and recomputation.

iii

Involvement of revival cases under section to the section 158BA andinvolvement of section 158BE for determining time limit of The Income Tax
Act, 1961• Sub-section (8) of the said section provides that order of assessment or reassessment

iv

Insertion of 6th proviso to clause xii of Explanation 1 of the said section• Clause (xii) of Explanation 1 of the said section provides that while computing therelating to any assessment year, which stands revived under sub-section (2) of section

period of limitation, period commencing from date of initiation of search and ending

153A, shall be made within a period of one year from the end of the month of suchon the date on which the seized materials are handed over to the Assessing Officer isrevival or within the period specified in the said section or sub-section (1) of section

excluded.

153B, whichever is later.
• In this regard, proposal has been made to involve those situation as well where revival
is made under 158BA(5). Also the time limited has now included the reference ofSection 158BE i.e. such assessment shall be completed within a period of one year
from the end of the month of such revival or within the period specified in the said

• The budget, 2024 has proposed to insert 6th proviso stating that cases where after
exclusion of this period, the period of limitation ends before the end of the monththen such period shall be extended to the end of such month.
• These amendments will take effect from 1st October, 2024.

section or sub-section (1) of section 153B or 158BE, whichever is later.

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Introduction of Block Assessment provisions incases of search under section 132 and requisition

Amendments in the provisions of chapter XIV-B of the Act:
• Assessment of total income as a result of Search: Where on or after the 1st day of September, 2024, a search is initiated u/s 132, or books ofunder section 132A of the Act:account, or any assets are requisitioned under section 132A, in the case of any person, the Assessing Officer shall proceed to assess or• In Budget 2024, A special procedure for assessment ofreassess the total income of such person in accordance with the provisions of the said Chapter.

search cases is introduced in order to make the• The Assessments/ re-assessments or re-computation including the cases where reference has been made u/s 92CA(1) and order passed u/s

procedure of Assessment of search cases cost-

92CA(3) of the Act for the block period shall abate. Till block assessment shall be completed, no further assessment/reassessment proceeding

effective, efficient and meaningful and to overcome

shall take place in respect of the period covered in the block.

multiple problems that are arising under the present
scheme of search assessment under section 148 of• The total income of the block period shall be computed in accordance with the provision of section 158BB of the Act, on the basis of evidence

the Act. It is proposed to introduce the scheme offound as a result of search or survey in consequence of such search or requisition of books of account or other material /information as are

Block Assessment for the cases in which search undereither available with the Assessing Officer or come to his notice by any means during the course of proceedings under the said Chapter.

section 132 or requisition under section 132A has• The total income relating to the block period shall be chargeable to tax, at the rate specified in section 113 of the Act i.e., sixty percent, as

been initiated or made. The main objectives for theincome of the block period irrespective of the previous year or years to which such income relates. No interest as per section 234A, 234B or

introduction of this scheme are early finalization of

234C or penalty as per section 270A of the Act shall be levied or imposed upon the assessee in respect of the undisclosed income assessed or

search assessments, coordinated investigation during

reassessed for the block period.

search assessments and reduction in multiplicity ofproceedings.

• Penalty on the undisclosed income of the block period as determined by the Assessing officer shall be levied at 50 percent of the tax payableon such income. No such penalty shall be levied if the assessee offers undisclosed income in the return furnished in pursuance of search andpays the tax along with the return.

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Assessment, Reassessment, Appeal and Penalty• The Assessing Officer, on determination of the total income of the block period in accordance with the procedure given in this chapter, shall pass an order of assessment orreassessment with the previous approval of the Additional Commissioner or the Additional Director or the Joint Commissioner or the Joint Director within twelve months from theend of the month in which the last of the authorisation for search under section 132, or requisition under section 132A of the Act, was executed or made and determine the tax
payable by him on the basis of such assessment or reassessment.
• The provisions of section 144C of the Act shall not apply to any proceeding under the said Chapter• The provision of this chapter shall not apply in case where, search was initiated before 1st September, 2024 and proceedings in such case shall be governed by the other provisions ofAct.

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Proposed changes to provisions of Section 253

Proposed changes to provisions of Section 276B

• Section 253 allows taxpayers to appeal to the Income Tax Appellate Tribunal (ITAT) against orders from

• Union budget has proposed to amend Section 276B andvarious tax authorities. under several sections such as 154, 250, 270A, 271, and others.
• Section 158BFA deals with penalties on undisclosed income found during searches. Since it is not
currently included in Section 253(1), taxpayers cannot appeal against such penalty orders. It is proposed
to add Section 158BFA to the list of appealable orders.
• Currently, appeals to the ITAT must be filed within 60 days from the date the order is communicated tothe taxpayer or the Principal Commissioner/Commissioner. With the new Faceless Appeal system,
orders are uploaded daily, making it hard to track the deadline.
• It is proposed to change the time limit to two months from the end of the month in which the order iscommunicated to the taxpayer or the Principal Commissioner/Commissioner.
• These changes will streamline the appeal process and ensure that the deadlines are easier to manage
under the new system.

extended the timelimit to deposit TDS and TCS till the date offurnishing TDS/ TCS returns. Section 276B contains the stringent
provision of prosecution for failure to deposit TDS and TCS withcentral government on or before due date of depositing TDS/

TCS. The prosecution may be for minimum of 3 months andmaximum term of 7 years along with a fine.
• This was often perceived as a huge punishment even if the delay
in depositing TDS/ TCS is not substantial. Many small companies
have to face litigation on small delays. The amendment in Union
budget will provide relief to taxpayers from prosecution if delay
in depositing TDS/ TCS is not beyond the due date of furnishing
TDS returns. This change aligns with the government’s agenda
to reduce tax litigation.

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Proposed changes to provisions of Section 251 with respect to powers of CIT(A)• Currently, The Commissioner (Appeals) have the following powers:• Confirm, reduce, enhance, or cancel an assessment if the appeal is against an assessment order.
• Confirm, cancel, or modify (to increase or decrease) a penalty if the appeal is against a penalty order.
• The Commissioner (Appeals) can ask the Assessing Officer for a report after conducting further inquiries before making a decision on an appeal. This is called as remand report.
• In many cases, taxpayers often ignore letters or notices from the Faceless Assessing Officer and instead file appeals directly with the Commissioner (Appeals) which adds to backlog ofcases• Proposed powers for Commissioner (Appeals):• To facilitate handling of the large number of pending appeals and disputed tax demands, it is proposed that for best judgement cases (under Section 144), the CIT(A) can set-aside
the assessment order and send the case back to the Assessing Officer for a fresh assessment.
• A corresponding amendment to Section 153(3) will set a time limit for the disposal of cases referred back by the Commissioner (Appeals).

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Proposed changes to provisions of Section 246(A)• As per section 275 no penalty order can be made if there is an ongoing appeal against the assessment order or other relevant order before the Joint Commissioner (Appeals),Commissioner (Appeals), under section 246 or 256(A) or the Appellate Tribunal (ITAT) under section 253.
• The penalty order must be made within:• The end of the financial year in which the penalty proceedings were completed, or• Six months from the end of the month in which the appellate order [of JCIT(A), CIT(A), or ITAT] is received by the Principal Chief Commissioner, Chief Commissioner, Principal
Commissioner, or Commissioner.
• The later of these two dates will be the deadline.
• For calculating the time limit, the important date is when the appellate order is received by the Principal Chief Commissioner, Chief Commissioner, Principal Commissioner, orCommissioner.
• It is proposed to amend Section 275 to remove the reference of the date of receipt of the order by these offices.
• This amendment aims to simplify and clarify the calculation of the time limit for imposing penalties, making it easier to determine the exact deadline.

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Introduction of the direct tax Vivad se Vishwas scheme, 2024
• The Direct Tax Vivad Se Vishwas Act, 2020, was a successful initiative for pending appeals as of 31.01.2020, receiving strong taxpayer response and significant revenue for theGovernment. Since the number of pending litigation cases is increasing because more cases go to appeal than are resolved. Given the success of the previous Vivaad Se Vishwas Act,
2020, and the growing number of appeals at the CIT(A) level, a new Direct Tax Vivad se Vishwas Scheme, 2024, is proposed. This scheme aims to settle disputed issues and reduce
litigation at a minimal cost to the exchequer.
• The Vivad Se Vishwas Scheme, 2024 has been introduced to alleviate the financial and procedural burden on taxpayers by providing a streamlined mechanism for resolving disputes.
By opting for this scheme, taxpayers can withdraw their pending appeals and settle their tax disputes in a simplified manner.
• The Vivad Se Vishwas Scheme, 2024 helps taxpayers by making it easier to settle tax disputes. It aims to cut down on legal costs and avoid long court cases. By using this scheme,
taxpayers can get reduced penalties and interest, encouraging them to resolve their issues quickly and fairly. The scheme is designed to make the tax process smoother and more
efficient for everyone.
• The Scheme will come into force on a date to be announced by the Central Government. The final date for the Scheme will also be notified.

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Transfer Pricing Proposal
Amendment in sub-section (2A) and (2B) of section 92CA of the Income-tax Act which

Exclusion of Finance Company located in International Financial Services Centre

relates to reference to Transfer Pricing Officer (“TPO”) by the Assessing Officer (“AO”)(“IFSC”) from the scope of section 94B of the Act• Earlier Sub Section 2A allowed the TPO to determine the Arm's Length Price (ALP) of an• Section 94B of the Act was inserted by Finance Act, 2017 in order to implement theinternational transaction which comes to the notice of the TPO and which has not been

recommendation on Action Plan 4 of the Base Erosion and Profit Shifting (BEPS) to put a cap

referred to him by the AO. And Sub Section 2B provides for computation of ALP by the TPO, ofon the entities resorting to base erosion and profit shifting (BEPS) by way of excess interest

those international transactions, details of which have not been furnished in the audit report

deductions. The aforesaid provisions are not applicable to Banking and Insurance Companies(“TP Certification”).

or such class of non-banking financial companies as may be notified by the Central• In the Finance Bill 2024, it is proposed to amend sub-sections (2A) and (2B) of section 92CA toGovernment in the Official Gazette in this behalf.

empower the TPO to address Specified Domestic Transactions (SDTs) that have not been

• In the proposed amendment, it is provided that Finance Company located in Internationalreferred to him by the AO and for which no audit report under section 92CE has been filed.

Financial Services Centre (“IFSC”) shall be excluded from the purview of Section 94B i.e.,• These amendments will be effective from April 1, 2025
• The proposed amendment expands the TPO's jurisdiction to include SDTs in addition to
International Transactions that have not been referred to him by the AO or for which no audit
report under section 92CE has been filed.

nothing contained in section 94B of the Act shall apply to such Finance Company.
• This amendment will be effective from April 1, 2025
• The insinuation of this amendment is that If such Finance Company located in IFSC incur any
interest expense or similar nature of expense exceeding one crore rupees which are
deductible in computing income chargeable under the head PGBP, it shall not be limited tothe extent of 30% of its EBITDA.

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Transfer Pricing Proposal
Expansion of Scope of Safe

Harbour rules to streamline

Amendments in sections 245Q and 245R related to Advance Rulings• Section 245Q has been proposed to be amended to extend the time limits for

Implication on Transfer Pricing Assessment in case ofAssessment of Total Income as a result of search initiated u/s

Transfer Pricing Assessment

withdrawal of applications before Board of Advance Rulings (“BAR”) till October

132 or making of requisition u/s 132A of the Act• With a view to reduce litigation and31st October 2024. Earlier, the Authority for Advance Rulings (“AAR”) was made• In case of initiation of search or requisition under section 132 or 132A ofprovide certainty in International
Transactions, the scope of safe
harbour rules would be expanded tomake them more attractive andineffective in 2021 and pending applications were transferred to newly constituted
BAR. The taxpayers were given 30 days time to withdraw the erstwhile applications
made before AAR, if required.

• Many of the applicants were pointing out that their applications are still pendingtransfer pricing assessment

for disposal, and that these applications were filed before AAR to get certainty on

procedure would be streamlined.

taxability of the transactions with an intent to get a ruling from a quasi-judicial

Although specific details on theforum in a time-bound manner. However, due to various reasons like change in

implementation of these measuresconstitution of BAR forum, non-binding nature of the ruling (as it is madehave not been provided at this time.

appealable to High Court), substantial passage of time, and other commercial
reasons, these applicants wish to withdraw their applications.
• However, the timelimit of 30 days to withdraw has also been lapsed. Hence, an
extension has been provided to taxpayers for withdrawal of applications as per the
choice of taxpayers.

the Act, the Ongoing TP Assessment or issued order u/s 92CA(3) shall beconsidered as abated on the date of the initiation of search.
• Where any evidence found as a result of search or requisition relates to
any IT or SDT referred to in section 92CA, pertaining to the period
beginning from the 1st day of April of the previous year in which last of
the authorisations was executed and ending with the date on which lastof the authorisations was executed, such evidence shall not be
considered for the purposes of determining the total income of the block
period and such income shall be considered in the assessment madeunder the other provisions of this Act.
• The provisions of section 144C of the Act shall not apply to any
proceeding under the said Chapter.
• This amendment will take effect from the September 1, 2024

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Proposal in relation to amendment in Prohibition of Benami Property Transactions Act, 1988
Amendment of Section 24 of the Prohibition of Benami

Insertion of new sub-section (2A) to the Section 24 ofAmendment of provisions of sub-section (3) and sub-

Property Transactions Act, 1988 (effective from the 1st

the Act

section (4)• Section 24 of the Act currently lacks time limit for• Existing provisions of sub-section (3) and sub-section

benamidar to furnish a reply to the notice issued(4) of section 24 of the Act provides for a time limit ofTransactions (PBPT) Act, 1988 pertains to the issuanceunder sub-section (1) or beneficial owner to file

Ninety days from the last day of the month in whichof notices and the attachment of properties involved

submissions on copy of said notice given to him undernotice under sub-section (1) is issued, for the Initiatingin Benami transactions.

sub-section (2) of Section 24 of the Act.

Officer to provisionally attach the property or to pass

day of October, 2024)• Section 24 of the Prohibition of Benami Property• Budget 2024 proposes to insert sub-section (2A) toprovide a maximum time limit of three months fromthe end of the month in which notice is issued under

an order for continuing the provisional attachment or
revoking the provisional attachment or deciding not toattach the property, as the case may be.

sub-section (1) for the benamidar or the beneficial
owner to file their explanations or submissions.

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Proposal in relation to amendment in Prohibition of Benami Property Transactions Act, 1988
Amendment of provisions of Sub-section (5) of Section 24 of the Act• The existing provisions of sub-section (5) of said section 24 allow for a time period offifteen days from the date of attachment order to the Initiating Officer to draw up astatement of the case and refer it to the Adjudicating Authority.
• Budget 2024, proposes to increase the above said limit to One month from the last
day of the month in which the order under sub-clause (i) of clause (a), or under subclause (i) of clause (b) of sub-section (4) of the said section 24 of the PBPT Act, 1988,
has been passed

Insertion of Section 55A in the Prohibition of Benami Property Transactions Act,

1988(The PBPT Act,1988)• To gather evidence against beneficial owners and incentivize benamidars to cooperate
in proceedings and provide testimony/evidences against the beneficial owner, Budget
2024 proposes to insert a new section 55A in the PBPT Act,1988 in the relation to"Power to tender immunity from prosecution and penalty" to benamidar, provided

they make full and true disclosure of the whole circumstances relating to the benami
transaction.
• This amendment will take effect from the 1st day of October, 2024.

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Amendment in provisions relating to set off and withholding of refunds [Section 245]
• Sub-section (2) of section 245 of the Act provides that where a part of the refund is set off under the provisions of sub-section (1), or where no such amount is set off, and refund
becomes due to a person and the Assessing Officer having regard to the fact that proceedings for assessment or re-assessment are pending in the case of such person, is of theopinion that the grant of refund is likely to adversely affect the revenue, he may, for reasons to be recorded in writing and with the previous approval of the Principal Commissioner ofIncome-tax or Commissioner of Income-tax, withhold the refund up to the date on which such assessment or reassessment is made.
• The above sub-section, inter alia, requires the Assessing Officer to form an opinion for withholding the refund that the grant of refund is likely to adversely affect the revenue. Budget
2024 proposes to amend the sub-section (2) to omit the said requirement.
• Further, the time limit for withholding of refund was up to the date on which such assessment or reassessment is made, which in is inadequate as the demand itself becomes due
after thirty days of the date of assessment.
• Budget 2024 proposes to extend the period of withholding the refund up to sixty days from the date on which such assessment or reassessment is made.

• Consequential amendment is also required in Proviso to sub section (1A) of Section 244A of the Act in determining the period of non-payment of additional interest payable in casewhere assessment is pending, the words “on which such assessment or reassessment is made” shall be substituted with the words “upto which such refund is withheld”.
• This amendment will take effect from the 1st day of October, 2024.

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Income Tax
Tax Proposal
Amendment to Section 132B of the Act [Application of seized or requisitioned assets]• Section 132B of the Act provides that any existing liability under the Income-tax Act, 1961, the Wealth-tax Act, 1957(27 of 1957), the Expenditure-tax Act, 1987 (35 of 1987), the Gifttax Act, 1958 (18 of 1958) and the Interest-tax Act, 1974 (45 of 1974), and the amount of liability determined on completion of the assessment or reassessment in consequence of
search or requisition, may be recovered from the taxpayer out of the seized assets under section 132 or requisitioned under section 132.
• Currently, most of the liabilities arising under the above stated Acts have been covered in section 132B of the Act, for the purpose of extinguishment of liability by recovery out of the
seized assets, except the liabilities arising under Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 which provides for taxation of undisclosed
foreign income and undisclosed foreign assets.
• To include the liabilities arising under Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, Budget 2024 proposes to insert the reference of Black
Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 in the section 132B of the Income-tax Act, 1961 so as to recover the existing liabilities under Black
Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, out of seized assets.
• This amendment will take effect from the 1st day of October, 2024.

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Amendment To The Black Money (Undisclosed Of Foreign Income And Assets) And Imposition Of Tax Act, 2015
Amendment to Section 42 of the Black Money Act, 2015

Amendments to Section 43 of the Black Money Act, 2015

• Section 42 of the Act imposes a penalty for not furnishing income tax return in• Section 43 of the Act imposes a penalty for failure to furnish in return of income,relation to foreign income and assets. This section applies to residents in India who

information or furnish inaccurate particulars about an asset (including financial

are not ordinarily residents and may result in a penalty of up to ten lakh rupees (USD

interest in any entity) located outside India. his section mandates a penalty of ten lakh

12,000 approx.) on non-furnishing ITR.

rupees (USD 12,000 approx.), irrespective of the value of the foreign asset, in cases• The proviso to this section exempts asset being a bank account with an aggregatebalance not exceeding five hundred thousand rupees (USD 60 approx.) during theprevious year.
• The proposed amendment seeks to substitute this exemption and provides that thissection would not be applicable in respect of an asset/ assets other than immovable
property upto a limit of twenty lakh rupees (USD 24,000 approx.).
• This amendment will take effect from October 1, 2024

where a resident and ordinarily resident individual fails to disclose details of specified
foreign assets or provides inaccurate particulars of such assets in their income tax
return.
• The proviso to this section exempts asset being a bank account with an aggregatebalance not exceeding five hundred thousand rupees (USD 60 approx) during theprevious year.
• The proposed amendment seeks to substitute this exemption and provides that thissection would not be applicable in respect of an asset/ assets other than immovable
property upto the limit of twenty lakh rupees (USD 24,000 approx.).
• This amendment will take effect from October 1, 2024

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04.

Indirect Tax
Proposals

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Goods and Services Tax
Amendment in Section-9 of CGST Act,
2017

Insertion of Section-11A of CGST Act,
2017

Amendment in Section-13 of
CGST Act, 2017

• The provisions of Section 9(1) of the CGST Act,• Government has inserted a new Section-11A of the CGST

• Section 13(3) of the CGST Act, 2017 is2017 was amended to exclude Extra Neutral Alcohol

Act, 2017 which empowers Government to fix issues

amended to provide the Time of Supply of(ENA) or rectified spirit used

where the tax was not charged correctly because ofServices where Invoice is required to be

for manufacture of alcoholic liquor for humancommon practices in the trade. This new power will also

issued by the Recipient of Services in caseconsumption from the purview of GST. Similar

apply to the IGST Act, UTGST Act, and GST (Compensation toof Reverse Charge Mechanism (Self-

amendment is made in the IGST Act and UTGST Act.

States) Act, helping ensure that tax rules are followed

Invoicing). The Time of Supply shall be

The taxability of Extra Neutral Alcohol (ENA), a key

correctly across all these areas. This provision aims toearlier of the following:

raw material for liquor production, has been aregularize past practices and offer relief to businesses thata. Date of Payment

contentious issue between the Centre, which claims it

adhered to industry norms, even if those norms did not fully

falls under GST, and the States, which assert exclusivecomply with tax law. This proactive measure not only

rights to levy VAT on it. The recent provision excluding

promotes a more predictable tax environment but also

un-denatured ENA used for manufacturing alcoholic

underscores the government's commitment to addressing

beverages from GST aims to resolve this dispute.

industry concerns and fostering a more business-friendly

b. Sixty days from date of invoice issued by
the Supplierc. Date of Invoice issued by the Recipient

climate.

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Goods and Services Tax
Insertion in Section 16 of CGST Act, 2017
• Section-16(5) of CGST Act, 2017 is inserted to provide retrospective benefit to taxpayer in respect of Input Tax
Credit claimed by the taxpayer on invoices and debit notes pertaining to the Financial Year 2017-2018 to Financial

Amendment in Section 17(5) of
CGST Act, 2017
• Under the earlier provisions, Input Tax

Year 2020-2021, if the ITC has been claimed by the registered taxpayer in any GSTR 3B Return filed on or

Credit (ITC) was blocked on tax paid underbefore 30th November 2021. The addition of sub-sections (5) and (6) to Section 16 introduces exceptions to the current

Sections 74, 129, and 130, as per clause (i)rules, permitting registered persons to claim Input Tax Credit (ITC) for past financial years (2017-18 to 2020-21) underof Section 17(5) of the CGST Act, 2017. The

specific conditions. This retrospective amendment provides substantial relief to businesses by extending the timeline for

new finance bill proposes to withdraw theavailing ITC.

reference to Sections 129 and 130 of the• Further Section-16(6) of the CGST Act, 20217 was inserted, which provides for the cases where cancellation of registration
has been revoked by the Appellate Authority, Tribunal or Court. The Taxpayer shall be able to claim ITC from the date ofcancellation to the date of revocation of cancellation of registration upon filing of

CGST Act, 2017, thereby allowing ITC on tax
paid under these provisions.
• Additionally, ITC on taxes paid under Section

I.

GSTR-3B on or before 30th November following the financial year or relevant Annual Return whichever is earlier

74 of the CGST Act, 2017, will be restricted

II.

30 days from the date of revocation of cancellation

until the Financial Year 2023-24.

Whichever is later.

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Goods and Services Tax
Amendment in Section 30
of CGST Act, 2017

Amendment in Section 31 of CGST Act, 2017
• To give effect to the amendment in Section-13 (3) of the CGST Act,

Amendment in Section 39 of CGST
Act, 2017• A second proviso to Section-30(2)2017, clause (f) of Section 31 of the CGST Act, 2017 is also amended.

of the CGST Act, 2017 is inserted

It is being amended to introduce a provision that specifies the time

TDS Deductor to furnish a return electronically for thewhich provides an enabling clause toframe within which an invoice must be issued by the recipient undermonth in which such deductions were made. The

prescribe conditions and restrictions

the reverse charge mechanism.

finance bill amends the aforesaid section and now

for revocation of cancellation ofregistration.

• Additionally, An explanation is inserted after clause (g)• Previously Section 39 of CGST Act, 2017 requires arequires TDS Deductor to furnish monthly

of Section 31 of the CGST Act, 2017 which defines Unregisteredreturn whether tax has been deducted by the taxpayer

Supplier as the one who is registered under section 51 of the CGST

or not.

Act, 2017 as a TDS deductor for the purpose of Clause (f) of the said

• The government is also empowered to prescribe rules,

Section. It clarifies that a person registered solely for the purpose ofform, manner and time within which to file return.

deducting TDS under Section 51 of the CGST Act shall be considered
as not registered for the purposes of Clause (f) of Section 31(3) of thesaid Act.

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Goods and Services Tax
Additions in Section 54 of
the CGST Act, 2017

Insertion in Section 70 of
the CGST Act, 2017

Amendment in Section 73/74 of the
CGST Act, 2017

• A new subsection (15) has been inserted to provide no• This Sub-section has been inserted, to enable an• Sections 73 and 74 of the CGST Act are being

refund of Unutilized ITC or Integrated Tax paid shall beauthorised representative to appear on behalf of theamended to limit their applicability to demands up toallowed in case of Zero rated supply, where such

summoned person before the proper officer tothe Financial Year 2023-24. Starting from the Financial

goods are subject to export duty.

comply with summon proceedings.

Year 2024-25, demands will be determined according• To give effect to the said
provision IGST Act 2017 is also amended.

to the provisions of the newly inserted Section 74A.
• Additionally, references to Section 74A or the relevant
sub-sections of Section 74A are being inserted into
Sections 10, 21, 35, 49, 50, 51, 62, 63, 64, 65, 66, 104,
and 127 of the respective Acts.

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Goods and Services Tax
Insertion of new section 74A in the CGST Act, 2017
Section 74A has been inserted to streamline the time limits for issuing adjudication notices and orders under GST law. It lays down the same limitation period for issuing demand
notices and orders in respect of demands from the Financial Year 2024-25 onwards, irrespective of whether the charges of fraud, wilful, misstatement, or suppression offacts are invoked or not. Below are important highlights of the aforesaid section.
• Issuance & Time Limit to issue Notice: Time limit to issue• Payment of Tax before issuance of notice: In bonafide• Payment of tax after issuance of Demand Order:

notice shall be 42 months from the due date ofcases, the amount payable shall be tax and interest as

In malafide cases if the taxpayer pays the tax, interest

furnishing the Annual Return for the financial year to which

computed under section 50. No penalty shall be leviable.

and penalty amounting to 50% of tax payable within sixty

the demand pertains or from the date of the

In malafide cases involving fraud, the amount payable shalldays of communication of the order, all of the proceedings

erroneous refund.

be tax, interest and 15 percent penalty on the amount ofin respect of the said notice shall be deemed to be

tax payable.

concluded.

• Penalty: In bonafide cases the penalty shall be INR 10,000(USD 120 approx.) or 10 percent of the tax due whichever• Payment of tax after issuance of notice: In bonafide• No notice shall be issued, if the unpaid tax or ITC has

is higher. In malafide cases involving fraud or any wilful-cases, if the amount (tax and interest) is paid within 60

been wrongly availed or utilized in a financial year is lessmisstatement or suppression of facts to the penalty shalldays from the date of service of notice, then no penalty

than 1,000/- rupees (USD 12 approx.).

be equivalent to the tax due.

shall be payable. In malafide cases, if the taxpayer makes• Time limit to issue Order: The proper officer shall issue thepayment within 60 days of the service of notice, thenorder within 12 months from the date of issuance of

the amount payable shall be tax, interest and penalty

notice. Also, the commissioner or person authorized by theamounting to 25% of the tax payable..

commissioner can extend the said period further by amaximum of 6 months.

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Goods and Services Tax
Insertion in section 75 of CGST Act,
2017

Amendment in section 107 of CGST
Act, 2017

Amendment in section
109 of CGST Act, 2017

• Insertion of Sub-section (2A), clarifies non applicability• Clause (b) of Section 107(6) of the CGST Act, 2017 is being• Section 109(5) of the CGST Act, 2017 isof penalty due to Fraud or wilful-misstatement oramended to reduce the maximum pre-deposit amountbeing amended to include the proviso which

suppression of facts specified u/s 74A(5)(ii), if samerequired for filing an appeal before the Appellate Authority

empower the Government to designate

has not been established with Appellate Authority orfrom twenty-five crores (USD 3 mn approx.) to twenty crores

specific types of cases and cases of Section-

Appellate Tribunal or court. These provisions are in(USD 2.4 mn approx.) in each head i.e. center and state.

171 (2) of the CGST Act, 2017, that will besimilar lines with existing provisions specified u/s

exclusively be heard by the Principal Bench

75(2), which is in relation to section 74.

of the Appellate Tribunal.

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Amendment in section 112 of CGST Act, 2017

Amendment in section 122 of CGST Act, 2017

• Sub-sections (1) and (3) of section 112 of the CGST Act, 2017 is being amended to• Sub-section (1B) of section 122 of the CGST Act, 2017 is being amended to limit its

allow the government to set the date for filing appeals before the Appellate Tribunal

applicability to electronic commerce operators who are mandated to collect tax at

and to create new deadlines for these appeals. These changes will be effective fromsource (TCS) under section 52 of the said Act. This amendment will be effective from

August 1, 2024.

October 1, 2023, the date when the said sub-section originally came into force.

• Additionally, sub-section (6) of the said section is being amended to enable the• This amendment aims to restrict penalty only towards e-commerce operators who

Appellate Tribunal to consider appeals filed by the department within three months

are mandated to deduct TCS, except E-commerce operators providing specific services

after the expiration of the prescribed six-month time limit.

through its platform as mentioned u/s 9(5).

• Clause (b) of Sub-section (8) of the said section is also being amended to reduce themaximum pre-deposit amount required for filing appeals before the Appellate
Tribunal from twenty percent (20%) to ten percent (10%) of the tax in dispute.
Moreover, the maximum amount payable as pre-deposit is being reduced from fifty
crores (USD 6 million approx.) to twenty crores (USD 2.5 million approx.) in each headi.e. center and state. A similar amendment is made in the IGST Act, 2017.

Amendment in section 128A of CGST Act, 2017
• Section 128A of the CGST Act, 2017 is being inserted to introduce a conditional waiverof interest and penalty concerning demand notices issued under Section 73 of the
CGST Act 2017 pertaining to the Financial Years 2017-18, 2018-19, and 2019-20. The
waiver is available only if the full tax amount is paid on or before the specified date to
be notified later. For demands pertaining to these financial years where interest andpenalty have already been paid, no refund shall be granted.

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Amendment in section 140 of CGST Act, 2017
• Section 140(7) of the CGST Act is being retrospectively amended, effective from July 1, 2017, to allow
the availment of transitional credit for input services received by an Input Services Distributor before
the GST enactment date, provided that the invoices were also received prior to this date.

Insertion of paragraph 8 and 9 in Schedule III
CGST Act, 2017
• Paragraph 8 is being added to Schedule III of the CGST Act, 2017 whichstates that when a lead insurer and a co-insurer jointly provide
insurance services to someone under a co-insurance agreement, theprocess of dividing the co-insurance premium between them won't be

Amendment in section 171 of CGST Act, 2017
• New Explanation and Proviso to Section 171(2)(a) of the CGST Act, 2017 has been inserted to allow
the Government authorize the Government to designate the GST Appellate Tribunal for handling antiprofiteering cases. Additionally, it empowers the Government to set a date after which the Authority
for Anti-profiteering will no longer accept applications for examination.

considered as selling goods or providing services. This is on thecondition that the lead insurer pays taxes on the entire premium
amount paid by the insured.
• Paragraph 9 is also being added to Schedule III of the CGST Act, 2017
which explains that when an insurer pays a reinsurance premium to areinsurer and deducts a commission from it, the services provided by
the insurer to the reinsurer won't be considered as selling goods orproviding services either. This is provided that the reinsurer pays taxes

No refund of tax paid or input tax credit reversedon the total reinsurance premium, including any commission• No refund shall be made of all the tax paid or the input tax credit reversed, which would not havededucted.

been so paid, or not reversed had the said section 114 been in force at all material times.

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ExciseExemption from Clean Environment Cess• The Clean Environment Cess which is levied and collected as a duty of excise, shall be exempted on excisable
goods lying in stock as on 30th June, 2017, if the payment of appropriate GST Compensation Cess on supplyof such goods on or after 1st July, 2017.

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Customs
Exemptions from GST
Compensation Cess• Based on the recommendation of the GST

Extension of BCD exemptions from goods to 31 March 2026 and 31 March 2029
• The Ministry of Finance has extended the time-limit for the Basic Customs Duty (BCD) exemption on goods specified under
Notification No. 50/2017-Customs dated 30 June 2017 and other notifications, until March 31, 2026. The exempted goods

Council in its 53rd meeting, GST

include textiles and leather products, capacitor-grade plastics, simply sawn diamonds, machinery, and electrical equipment

Compensation Cess is being exempted withfor use in semiconductor wafer production, LCD and semiconductor chips, as well as parts for the manufacture of microeffect from 1st July, 2017 on imports in SEZ

ATMs, fingerprint readers/scanners, iris scanners, and miniaturized POS systems, among others.

by SEZ units or developers for authorized
operations.

• Further, the Basic Customs Duty (BCD) exemptions for goods under various notifications are extended until 31 March 2029.
These cover various items such as show-room displays, warranty replacements, foodstuffs, firearms, specified gifts, aids forthe disabled, repair articles, defense imports, research equipment, semiconductor machinery, aircraft parts, artwork, andspecific medicines.
• The BCD exemption for goods under specific serial numbers of notification no. 50/2017-Customs is extended until March 31,
2029. Items include medicines from UNICEF, drugs, press and journalist equipment, ship repair materials, lifesaving medical
equipment and drugs, and archaeological artefacts for exhibition.

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Customs
Exemptions from levyof Social Welfare
Surcharge

Customs Duty Exemptions
on certain goods to Lapse
Effective 30.9.2024

Notification 29/2024 dated 23 July 2024 Import of Commercial Samples

The following goods are exempted from the

Certain BCD exemptions under S No.

levy of Social Welfare Surcharge like natural

50/2017-Customs dated 30.6.2017 and othergraphite, sands, various ores andnotifications will lapse from 30.9.2024. This

concentrates (including copper, cobalt, andincludes exemptions for wirelesstin), rare-earth metals, silicon compounds,

apparatus, zinc metal, precious metaloxides, hydroxides, chlorides, and nitrates ofspinnerettes, coating materials, catalysts,

The duration for re-exporting foreign articles imported into India for repairs has been extended

specific elements, as well as unwrought andresins, plastic sheets, toughened glass,from six months to one year, with a further extension of one year. For aircraft and vessels

semi-manufactured metals such as tin,telecommunication equipment, batteries,

imported for maintenance, repair, and overhauling, the initial re-exportation period is now onetungsten, tantalum, etc.

energy controllers, surveying instruments,

year, extendable by another year.

Incase of import of commercial samples, the importer at the time of importation has todeclare and ensure that the value of goods are not exceeding INR 3,00,000/- (USD 3600 approx.).

Notification No. 38/2024 - Customs(dated July 23, 2024)

aluminum oxide, clay powder, solar glass,medical endoscope parts, syringe
components, and monitoring system parts.

Notification No. 39/2024 - Customs(dated July 23, 2024)
The duty-free re-import period for goods exported from India under warranty, excluding thoseunder export promotion schemes, has been increased from three years to five years, with apossible extension of two additional years

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Customs: Change in Tariff Rates
Sector: Aquafarming & Marine Exports#

Heading, sub- heading, tariff item

Commodity

10306 36

Live SPF Vannamei shrimp (Litopenaeus vannamei) broodstock

10%

5%

2

0306 36

Live Black tiger shrimp (Penaeus monodon) broodstock

10%

5%

3

0306 36 60

Artemia

5%

Nil

4

0511 91 40

Artemia cysts

5%

Nil

5

0308 90 00

SPF Polychaete worms

30%

5%

6

1504 20

Fish lipid oil for use in manufacture of aquatic feed

15%

Nil

7

1504 20

Crude fish oil for use in manufacture of aquatic feed

30%

Nil

8

1518

Algal Oil for use in manufacture of aquatic feed

15%

Nil

9

2102 20 00

Algal Prime (flour) for use in manufacture of aquatic feed

15%

Nil

10

2309 90 90

Mineral and Vitamin Premixes for use in manufacture of aquatic feed

5%

Nil

11

2301 10 90

Insect meal for use in Research & Development purposes in aquatic feed manufacturing

15%

5%

12

2309 90 90

Single Cell Protein from Natural Gas for use in Research & Development purposes in aquatic feed
manufacturing

15%

5%

13

2301 20

Krill Meal for use in manufacture of aquatic feed

5%

Nil

14

1901

Pre-dust breaded powder for use in processing of sea-food

30%

Nil

15

2309 90 31

Prawn and shrimps feed
15%

5%

16

2309 90 39

Fish feed

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To

Impact

The recent budget decision to fully
exempt customs duties on criticalminerals, including lithium, copper,
cobalt, and rare earth elements, isa significant boost for India's
strategic sectors. These minerals
are essential for advancing nuclear
energy, renewable energy, space
exploration, defense technologies,
telecommunications, and high-techelectronics. By reducing costs andensuring the availability of these
crucial materials, the government isfostering innovation, enhancing
competitiveness, and driving
sustainable economic growth. Thisinitiative will also help India's selfreliance and resilience in criticalindustries.

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Customs: Change in Tariff Rates
Sector: Critical Minerals#

Heading, sub- heading, tariff item

Commodity

12504

Natural Graphite

From
5%

To
3%

Impact2

2505

Natural sands of all kinds, whether or not coloured, other than metal bearing sands of chapter 26 of The Customs tariff Act,
1975

5%

Nil

3

2506

Quartz (other than natural sands);quartzite, whether or not roughly trimmed or merely cut, by sawing or otherwise, into blocks
or slabs of a rectangular (including square) shape

5%

3%

4

2603 00 00

Copper ores and concentrates

3%

Nil

5

2605 00 00

Cobalt ores and concentrates

3%

Nil

6

2609 00 00

Tin ores and Concentrates

3%

Nil

7

2611 00 00

Tungsten Ores and Concentrates

3%

Nil

8

2613

Molybdenum ores and concentrates

3%

Nil

9

2615 10 00

Zirconium ores and concentrates

3%

Nil

10

2615 90

Hafnium Ores and concentrates

3%

Nil

11

2615 90 10

Vanadium ores and concentrates

3%

Nil

12

2615 90 20

Niobium or tantalum ores and concentrates

3%

Nil

13

2617

Antimony Ores and Concentrates

3%

Nil

14

2804 50 20

Tellurium

5%

Nil

15

2804 61 00

Silicon, containing by weight not less than 99.99% of silicon

5%

Nil

16

2804 69 00

Other silicon

5%

Nil

17

2804 90 00

Selenium

5%

Nil

18

2805 30 00

Alkali or alkaline earth metals, Rare-earth metals, scandium and yttrium, whether or not intermixed or inter alloyed

5%

Nil

19

2822 00 10

Cobalt oxides

8%

Nil

20

2827 35 00

Chlorides of Nickel

8%

Nil

21

2833 24 00

Sulphates of Nickel

8%

Nil

22

2834 21 00

Nitrates of potassium

8%

Nil

23

2836 91 00

Lithium carbonates

8%

Nil

24

2846

Compounds, inorganic or organic of rare earth metals

8%

Nil

25

2918 15 30

Bismuth citrate

8%

Nil

26

7202 60 00

Ferro Nickel

3%

Nil

27

7204

Ferrous Scrap

Nil (till 30.09.2024)

Nil (till 31.03.2026)

28

7225

Certain specified raw materials for manufacture of CRGO steel

Nil (till 30.09.2024)

Nil (till 31.03.2026

297402 00 10

Blister Copper

5%

Nil

Ranked consistently in International Tax Review’s World Tax and World Transfer Pricing Guides (2017-2024)

The reduction of basic
customs duty on shrimp andfish feed is a significant
boost for the aquacultureindustry. This initiative will
lower production costs,
making the industry morecompetitive andsustainable. By easing thefinancial burden on shrimp
and fish farmers, thegovernment is fostering
growth in the sector andsupporting rural livelihoods.
This proactive measure
underscores thegovernment's commitment
to enhancing the
agricultural economy andensuring the prosperity of
aquaculture enterprises©2024 AKM Global - All Rights Reserved

68Economic Survey

Non-Tax Proposals

Direct Tax Proposals

Indirect Tax Proposals

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Non-Tax Proposals

Direct Tax Proposals

Indirect Tax Proposals

Indirect Tax Proposals

Customs: Change in Tariff Rates
Sector: Cancer Drugs and Medical Equipment#

Heading, sub- heading, tariff item

Commodity

130

Trastuzumab Deruxtecan, Osimertinib, Durvalumab

239

39, 72, 81

3

4

5

From

To

Impact

10%

Nil

All types of polyethylene for use in manufacture oforthopaedic implants falling under sub-heading 9021 10

As applicable

Nil

Special grade stainless steel, Titanium alloys, Cobalt-chrome
alloys, and All types of polyethylene for use in manufacture ofother artificial parts of the body falling under sub-heading
9021 31 or 9021 39

As applicable

Nil

15%

5% (till 31st March 2025)
0.075 (w.e.f 1st April, 2025 to
31st March, 2026)
0.1 ( w.e.f 1st April, 2026)

15%

5% (till 31st March 2025)
0.075 (w.e.f 1st April, 2025 to
31st March, 2026)
0.1 ( w.e.f 1st April, 2026)

9022 30 00

X-ray tubes for use in manufacture of X-ray machines for
medical, surgical, dental or veterinary use

9022 90 90

Flat panel detectors (including scintillators) for use in
manufacture of X-ray machines for medical, surgical, dental
or veterinary use

Ranked consistently in International Tax Review’s World Tax and World Transfer Pricing Guides (2017-2024)

The exempting customs duties on three
additional cancer medicines and reducing
BCD on medical machines is a commendable
step towards making life-saving treatments
more accessible and affordable for patients.
This proactive measure reflects thegovernment's commitment to improving
healthcare outcomes and supporting thosebattling cancer. By reducing the financial
burden on patients and their families, thisinitiative will enhance the overall quality ofcare and encourage timely medical
intervention.

©2024 AKM Global - All Rights Reserved

69

Economic Survey

Non-Tax Proposals

Direct Tax Proposals

Indirect Tax Proposals

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Direct Tax Proposals

Indirect Tax Proposals

Indirect Tax Proposals

Customs: Change in Tariff Rates
Sector: Precious Metals#

Heading, sub- heading, tariff item

Commodity

1

7108

Gold bar

15%

6%

2

7108

Gold dore

14%

5%

3

7106

Silver bar

15%

6%

4

7106

Silver dore

14%

5%

5

7110

Platinum, Palladium, Osmium, Ruthenium, Iridium

15%

6%

6

7118

Coins of precious metals

15%

6%

7

7113

Gold/Silver findings

15%

6%

8

71

Platinum and Palladium used in the manufacture of noble
metal solutions, noble metal compounds and catalytic
convertors

8%

5%

9

84

Bushings made of platinum and rhodium alloy when imported
in exchange of worn out or damaged bushings exported outof India8%

5%Ranked consistently in International Tax Review’s World Tax and World Transfer Pricing Guides (2017-2024)

From

To

Impact

The recent reduction of customs duty on
gold, silver and platinium is a strategic move
designed to benefit both consumers and the
manufacturing sector. By lowering the cost ofthese precious metals, the government ismaking them more accessible to buyers andstimulating market demand. Additionally, thisreduction will significantly reduce working
capital requirements for jewellery
manufacturers, enhancing their liquidity andcompetitiveness.

©2024 AKM Global - All Rights Reserved70Economic Survey

Non-Tax Proposals

Direct Tax Proposals

Indirect Tax Proposals

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Indirect Tax Proposals

Customs: Change in Tariff Rates
Sector: IT and Electronics Sector#

Heading, sub- heading, tariff item

Commodity

18517 13 00, 8517 14 00

Cellular mobile phone

20%

15%

2

8504 40

Charger/Adapter of cellular mobile phone

20%

15%

3

8517 79 10

Printed Circuit Board Assembly (PCBA) of cellular mobile
phone

20%

15%

4

28, 29, 38

Specified parts for use in manufacture of connectors

5%/7.5%

Nil

5

74

Oxygen Free Copper for use in manufacture of Resistors

5%

Nil

6

40

Specified die-cut parts for use in manufacture of cellular mobile
phonesAs applicableNil

7

40, 70, 76

Specified mechanics for use in manufacture of cellular mobile
phonesAs applicableNil

88517 79 10

Printed Circuit Board Assembly (PCBA) of specified telecom
equipment

10%

15%

Ranked consistently in International Tax Review’s World Tax and World Transfer Pricing Guides (2017-2024)

From

To

ImpactThe Finance Minister's decision to reduce thebasic customs duty on mobile phones, mobile
PCBAs, and chargers is a significant win for
consumers. This move aims to make essential
technology more affordable and accessible.
By lowering import costs, the government is
not only reducing the financial burden on
consumers but also encouraging innovationand competitiveness among Indian
manufacturers.

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Non-Tax Proposals

Direct Tax Proposals

Indirect Tax Proposals

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Direct Tax Proposals

Indirect Tax Proposals

Indirect Tax Proposals

Customs: Change in Tariff Rates
Sector: Renewable Energy Sector#

Heading, sub- heading, tariff item

Commodity

184, 85, or any other chapter

Specified capital goods for use in manufacture of solar cells or
solar modules, and parts for manufacture of such capital
goods

8%

Nil

2

7007

Solar glass for manufacture of solar cells or solar modules

Nil

10% (w.e.f. 1.10.2024)

3

74

Tinned copper interconnect for manufacture of solar cells or
solar modules

Nil

5%(w.e.f 1.10.2024)

Ranked consistently in International Tax Review’s World Tax and World Transfer Pricing Guides (2017-2024)

From

To

ImpactExemption of more capital goods for the
manufacturing of solar cells and panels is apivotal step towards bolstering India's
renewable energy sector. This move not only
reduces the cost of production for solar
manufacturers but also accelerates the
adoption of clean energy technologies. By
making the manufacturing process more costeffective, the government is driving
innovation, creating green jobs, andreinforcing India's commitment to sustainable
development.

©2024 AKM Global - All Rights Reserved72About US
Headquartered in Gurgaon (India), AKM Global is a leading Tax, Advisory, and Regulatory service partner for both domestic and MNCs across industries. With a team of over 600
professionals operating out of 8 locations, AKM Global serves a wide range of clients, from Fortune 500 corporations & closely held businesses to startups and high net-worth individuals.
The company’s industry experience spans over 43 years, and they provide a wide spectrum of cross-border transactions, which include but are not limited to, tax structuring, India-entry
strategy, due diligence, foreign exchange controls, corporate law, valuations, litigation, transfer pricing, audit support, expatriate tax matters, outsourcing and EOR services etc. This rich
exposure has earned us several accreditations.

AKM Global has been consistently rated as one of India's leading tax and transfer pricing firms by ‘The International Tax Review (2016-2024).

Contact Information
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Gurgaon - 122018, Haryana, India

Phone No: +91 124 6647500
info@akmglobal.in, www.akmglobal.com

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DELHI

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PUNE

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UAE©2024 AKM Global - All Rights Reserved73