01. No change in Income Tax rates, surcharge & cess.
02. Income tax Act 2025 effective from April 1, 2026.
03. Old regime tax continues with same tax rates & deductions.
04. TDS & TCS
· TDS
on Supply of manpower services included within the scope of Section 393 of
Income-tax Act, 2025 (i.e., earlier Section 194C of Income-tax Act, 1961) and
is to be taxable at the rate of either 1% or 2%.
· Introduction
of rule-based automated process for small taxpayers for obtaining a lower or
nil deduction certificate.
· TDS
on the sale of immovable property by a non-resident can be deducted and
deposited through resident buyer’s PAN instead of TAN.
· TCS
rate on sale of overseas tour program package and for pursuing education /
medical purposes under the Liberalized Remittance Scheme reduced to 2% without
any stipulation of amount.
· Shareholder now can submit their
Form 15G to their depository and depository will inform companies not to deduct
TDS.
05. MAT
· No
new MAT credit shall be allowed with effect from 1 April 2026.
· The
MAT rate has been reduced to 14% from the existing 15%.
· Set
off of existing MAT credit shall be permitted where the company opts for the
new tax regime, limited to:
o 25%
of tax liability in the case of a domestic company, and
o 100% of tax liability under normal computation over the MAT liability in the case of a foreign company.
06. Buyback :
· Gains
to Shareholders other than Promoters
Long-term capital gains arising to shareholders other
than promoters on buyback of shares by listed or unlisted companies shall be
taxable as capital gains at 12.5% (plus applicable surcharge and cess). For
these purposes, the meaning of ‘Promoters’ is as per SEBI regulations for
listed companies and as per Companies Act for unlisted companies (including
shareholders holding more than 10% of the shareholding). These amendments seek
to replace the current tax treatment under which such income is taxed as dividend
income at the applicable slab rates.
· Gains
to Promoters
In order to ensure an overall tax incidence of 22% for
domestic companies and 30% for other than domestic companies on buyback
proceeds received by promoters, an additional income-tax shall be imposed on
such promoters, over and above the applicable base tax.
07. New
safe harbour provisions for IT/ITES by clubbing of services under a single
category of information technology services with a common safe harbour margin
of 15.5%. Also, safe harbour threshold for IT services is proposed to increase
from ₹ 300 crore to ₹2,000 crore.
08. Return Filing and Compliance
- Rationalisation of due dates for filing returns, with extended
timelines (i.e., 31 August) for non-audit business taxpayers and trusts.
- Time limit for filing revised returns proposed to be extended till
31 March (from 31 December) with payment of a nominal fee, providing
greater flexibility to correct omissions or errors.
- Scope of filing updated returns expanded, including cases involving reduction of losses and certain reassessment scenarios with additional 10% tax payment, aimed at encouraging voluntary compliance and reducing litigation.
- 09. The deduction for interest expense against dividend income or income from units of mutual funds has been withdrawn. Earlier, such deduction was allowed up to 20% of the gross dividend or mutual fund income.
10. Employees contribution towards employee welfare funds shall now be allowed as deduction if the employer deposits the same within the due date for filing the return of income.
11. Settlement of Long-Pending Tax Controversies (Retrospective Clarifications):
·
It clarifies that the Jurisdictional Assessing Officer
(JAO) has always been empowered to issue reassessment notices under Section 280
of Income-tax Act, 2025 (i.e., earlier Section 148 of Income-tax Act, 1961) and
conduct proceedings under Section 281 of Income-tax Act, 2025 (i.e., earlier
148A of Income-tax Act, 1961), retrospectively effective from 1 April 2021.
·
Assessment orders shall not be rendered invalid merely
due to technical defects in quoting the Document Identification Number (DIN),
provided the order is otherwise traceable to such DIN, with retrospective
effect from 1 October 2019.
·
It
has been clarified that the timelines in Dispute Resolution Panel (DRP)
proceedings for
passing the final assessment orders will follow the prescribed DRP timelines
rather than the general assessment timelines. The clarification is proposed to
apply retrospectively from April 2009.
·
Retrospective clarification has also been provided on
the computation of limitation periods for passing Transfer Pricing Officer
(TPO) orders, addressing long-standing interpretational disputes dating back to
1 June 2007.
·
Pre-deposit limit has been reduced to 10% from 20%.
12. Penalty and Prosecution:
·
Several
measures have been introduced to decriminalise penalty proceedings and other
prosecution related provisions.
·
New framework for immunity from penalty and
prosecution in the case of misreporting of income introduced in addition to the
existing immunity provisions for underreporting of income.
13. Compensation received from Motor accident claims tribunals with interest in now exempt
14. Introduction of tax holiday to a
foreign company till 2047, on any income earned in India by way of procuring
data centre services from a specified data centre subject to providing services
to Indian users through an Indian reseller entity.
15. Introduction
of a fast-track unilateral APA process for IT services, with a targeted
completion timeline of two years, extendable by up to six months at the
taxpayer’s request.
16. Five years tax exemption on foreign
sourced income of non-residents visiting India for providing services in India
in connection with any scheme as may be notified by the Central Government
17. STT on futures increased to 0.05% & Options 0.15%.
18. There is one time window to disclose foreign assets with payment of tax & fees.
19. Decriminalization of minor offences.
No comments:
Post a Comment