Friday, 24 March 2023

Tax Amendments Proposed at Lok Sabha

The Finance bill 2023 has been passed in Lok Sabha yesterday with few new proposals which were not there in bill presented on February 1, 2023.  The important points are summarized below for your reference.

 

Income Tax amendments

 

  • Royalty / FTS rate under section 115A increased to 20% (from 10%); non-residents will have to avail beneficial rate under tax treaty. This would mean that online form 10F would be required to be submitted by Non-Residents from 1/4/2023 (where TRC does not have all the details). To submit an online 10F, PAN is required to login and file.   

 

  • Any income from mutual funds in which less than 35% of holding is in Indian equities ( Broadly Debt Mutual funds), if investment is done after 1 April 2023, will be classified as Short-term capital asset irrespective of Period of Holding. This means indexation benefit from Debt Mutual Funds has been removed. Also, investment in MLD post 1 April 2023, will be Short term capital asset. 

 

  • All credit cards payments for foreign tours to be considered under LRS. The Reserve Bank of India (RBI) to investigate the payments made through credit cards for foreign tours which escape tax at source. Tax Collection at Source (TCS) shall apply to all Liberalized Remittance Scheme (LRS) even if within India.  The TCS rate is 20%.

 

  • Enhanced tax benefits to offshore banking units operating in GIFT City (Gujarat International Finance Tec-City). Offshore banking units to get 100 percent deduction on income for 10 years.    
  • The Securities Transaction Tax on sale of options hiked to Rs 2,100 on a turnover of Rs 1 crore, compared to the earlier Rs 1,700 
  •  Penal consequences to claim deduction of cess or surcharge in prior years have been prescribed with certain exceptions. 
  • Clarifications have been provided on taxation of Virtual Digital Assets (VDA).
  • New time limits prescribed to reduce the quantum of pending litigations.
  • Central Board of Direct Taxes (CBDT) empowered to issue guidelines to remove difficulties in implementation of withholding tax on benefit or perquisite paid to a resident.

 

GST related amendments


🟡 S.23: A non-obstante proposed to be added to Section 23 for exemption from compulsory registration shall now be applicable only to the category of persons specified by the government.



🟡 S.30: The time for the application for revocation of cancellation of registration and the powers to extend such period shall now be specified in the rules


🟡 S.62: The period to furnish GSTR-3B (and other return u/s 39) and final return upon cancellation of registration has been proposed to be extended from 30 days to 60 days and additional 60 days upon payment of penalty.


🟡 The provisions relating to the constitution of Appellate Tribunal and Benches thereof and their administration have been substituted


🟡 S.13 IGST: The sub-section providing the place of supply of services of transportation of goods (other than by way of mail or courier), when either service provider or recipient is located outside India, to be the place of destination of such goods is proposed to be omitted.

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