Amendment Income Tax Rate

In the alternate tax regime under Secon 115BAC, a revision to the basic exempon limit and the number of slabs has been proposed. The revised basic exempon limit shall be INR 3,00,000 and for every addional INR 3,00,000 of income, the next slab rate will be applicable.  

Up to ₹ 3,00,000  Nil  Nil  Nil

₹ 3,00,001 - ₹ 6,00,000 5% of (total income minus ₹ 3,00,000) 4% of incometax 5.20%

₹ 6,00,001 - ₹ 9,00,000 ₹ 15,000 + 10% of (total income minus ₹ 6,00,000) 4% of incometax 10.40%

₹ 9,00,001 - ₹ 12,00,000 ₹ 45,000 + 15% of (total income minus ₹ 9,00,000) 4% of incometax 15.60%

₹12,00,001 - ₹ 15,00,000 ₹ 90,000 + 20% of (total income minus ₹ 12,00,000) 4% of incometax 20.80%

Above ₹ 15,00,000 ₹ 1,50,000 + 30% of (total income minus ₹ 15,00,000) 4% of incometax 31.20% 

 The highest slab rate of 30% shall connue to apply to income above INR 15,00,000.   The threshold limit for total income eligible for rebate under Secon 87A has been proposed to be increased from INR 5,00,000 to INR 7,00,000 for assessees opng for the new tax regime.   Under the new tax regime, the highest surcharge rate of 37% on income above INR 5,00,00,000 has been reduced to 25%.  

The following amendments in Deducons and Exempons have been provided vide Finance Act 2023:

 Receipts arising from life insurance policies issued on or aer April 1st, 2023, shall be considered as income from other sources if the premium paid exceeds ₹ 5,00,000 in a given year. The exempon for receipts in the event of the insured person's death shall remain unchanged.

 To avail a deducon under Secon 10AA, the assessee must submit a return of income on or before the due date specified under Secon 139(1).

 Deducon under Secon 10AA shall only be allowed if the proceeds from the sale of goods or provision of services are received in converble foreign exchange within 6 months from the end of the previous year or within such further period as the competent authority may allow in this behalf. 

.Amendments w.r.t. TDS & TCS 

 The threshold limit for TDS under Secon 194N has been proposed to be raised from INR 1 crore to INR 3 crore for recipients who are cooperave sociees.  

The rate of TCS for foreign remi ances, for other purposes under Liberalised Remi ance Scheme (LRS) and purchase of overseas tour program has been increased from 5 % to 20 %. 

TDS on winning from online gaming shall be without any threshold benefit. The tax will be deducted either upon withdrawal or at the end of financial year.  

The exempon from TDS available on interest payments on listed debenture has been removed. 

If the recipient of EPF withdrawal does not provide his PAN, TDS on the withdrawal will be 20%, instead of the maximum marginal rate. 

Secon 197 is amended to include secon 194LBA in its scope. Thus, unit holders receiving income from business trusts can obtain lower or nil deducon cerficates

Secons 206AB and 206CCA have been amended to exclude certain persons from the scope who are not required to file a return of income and are nofied by the government. 

For certain income paid to non-residents or foreign companies, TDS will be deducted at a rate of 20% or the rate specified in a tax treaty, whichever is lower. This relief will be available if the payee provides a tax residency cerficate. 

Secon 155 is amended to solve a TDS mismatch problem. When a taxpayer reports income using the accrual method, it may be taxed before the TDS is deducted. It causes a TDS mismatch and prevents the taxpayer from claiming TDS credit. The amendment in secon 155 allows taxpayers to apply to the assessing Officer within two years of the financial year in which the tax was withheld. The Assessing Officer will then amend the assessment to allow the taxpayer to claim TDS credit. Secon 244A is also amended to provide that the interest on refund arising out of the above recficaon shall be for the period from the date of the applicaon to the date on which the refund is granted.