Relief for individual taxpayers: In the new tax regime, a nominal exemption is proposed for taxpayers with income above Rs 7 lakh. According to the Finance Bill, 2023, individuals will not have to pay any tax under the new provision if the income does not exceed 7 lakhs. However, those with income above 7 lakhs will not get any small concessions. Only nominal relief is given now. With this, those earning between Rs 7,00,001 to Rs 7,29,000 will be treated at par with a person earning up to Rs 7 lakh.
Debt MFs are subject to STCG: Capital gains from debt-based mutual funds where the investment in equity shares does not exceed 35 percent of the total income of the mutual fund will now be subject to short-term capital gains. Benefit of indexation will not be available. This will be applicable for deposits made on or after 1st April 2023.
Securities Transaction Tax on Options, Futures Trading: Finance Bill 2023 amends to raise securities transaction tax on options and futures trading. The STT applicable on the sale of options with a turnover of Rs 1 crore has been increased by 25 per cent from the existing Rs 5,000.
Rate of Royalty, FTS increased to 20% under Section 115A : This will affect expatriates in countries that do not have a tax treaty with India. Because the tax rate on such income is increased by 10 percent. Non-residents of countries that do not have a tax treaty with India will now have to pay a higher rate of 20 percent on income from royalties and FTS.
TCS for Liberalized Remittance Scheme : TCS is collected under Section 206C(1G) in case of remittance under LRS, even if the remittance is not from India. Earlier, TCS could be collected only if LRS was made from India. Earlier, TCS was applicable only if the LRS was manufactured in India.
TCS rate will be 20% without PAN : As per Section 206CC, in absence of PAN, TCS can be collected at the rate of 5 per cent or double the rate specified in the relevant provision. But it is proposed to limit it to 20 percent. The amendment is proposed to come into effect from 1st July, 2023.
Also Read : Should You Continue Investing In Debt Mutual Funds? Things Investors Should Know
TCS rate in case of non-filing of tax return will be 20% : As per Section 206 CCA, TCS can be collected at the rate of 5 per cent or double the rate specified in the relevant provision if the return is not filed. But TCS has proposed to limit the upper limit of collectability to 20 percent. This amendment will be implemented from July 1, 2023.
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