- Making New Tax regime as default regime and allowing Standard deduction of Rs. 50,0000 and Family pension for new regim
The slab rates for under new regime: –
| Total Income | Rate |
| Up to 3,00,000 | Nil |
| From 3,00,001 to 6,00,000 | 5% |
| From 6,00,001 to 9,00,000 | 10% |
| From 9,00,001 to 12,00,000 | 15% |
| From 12,00,001 to 15,00,000 | 20% |
| Above 15,00,000 | 30% |
The new regime called as 115BAC which is before applicable to Individual and HUF is amended and from April 1, 2023, association of persons (AOP) other than co-operative society, body of individuals and artificial judicial persons can also opt for the new tax regime – apart from individuals and HUFs.
2. The rebate under section 87A under New regime is fixed to Rs. 7 Lakhs.
3. The highest surcharge changed from 37% to 25% for income more than 5 crores.
4. From 1st April 2023, no Indexation benefit will be available for Specified debt Mutual Funds ( Where the portion of Equity scheme does not exceed 35%) for the investments made on or after 1St April 2023. So, making it par with bank fixed deposits. This means Investments made in specified debt mutual funds before 1st April 2023 will come under old scheme.
5. For Manufacturing co-operative societies established on or after 1st April 2023, a new section 115BAE was introduced which has a tax rate of 15% (plus 10% surcharge) and it has to commence its production on or before 31st March 2024.
Read more at: Section 143(1) of Income Tax Act 1961- All About Intimation U/S 143(1)
6. Any receipts received under Life insurance policies on or after 1st April 2023, where the amount of premium paid exceed Rs. 5 lakhs for a given year shall be considered as “Income from other sources” and be taxable. This amendment will not be applicable if amount received in case of death of a person.
7. New section 80CCH was inserted, where the amount paid or deposited in Agniveer corpus Fund w.e.f from 1st November, 2022 can be allowed as deduction under new and old scheme.
8. New TDS section 194BA was introduced to tax earnings on winnings from online gaming at 30% if such winnings exceed Rs. 10,000/-.
9. Any payment made to ‘Micro’ and ‘Small’ enterprises registered under MSME Act, if not made within the period specified u/s 15 of MSMED act, shall be allowed for deduction on payment basis as per section 43B.
10. Distributions made by REITs and INvITs which was classified repayment of debt would be taxable in the hands of unit holders. After few changes it was decided that only a portion of Repayment of Debt known as ‘Specified sum’ will be Taxable in the hands of Unit holders.
11. Limit u/s 44AD has been increased from Rs.2 crores to Rs. 3 crores and under 44ADA for professionals Rs. 50 lakhs to Rs. 75 lakhs only when maximum limit of cash receipts is 5% of total receipts.
12. For Individual and HUF maximum amount of exemption u/s 54 and 54F will be 10crores for calculation of capital gains.
13. The eligibility to claim exemption u/s 11, 12, and 23(c) shall be allowed if he return of income has been filed within the time limit specified u/s 139(1) and 139(4). So, the time limit specified in updated return 139(8A) will not be allowed for claiming exemption.
14. U/S 194N, TDS on cash withdrawal by co-operative societies has been increased from Rs 1 crore to Rs 3 crores.
15. New section 50AA was introduced for calculation of capital gains of MLDs( Market linked debentures). Capital gains from transfer, redemption, maturity shall be deemed to be o be the capital gains arising from the transfer of a short-term capital asset.
16. Section 80IAC has been extended for incorporation of Startups to 01-04-2023 in order to claim exemption of startups.
There are several other amendments which are introduced in budget 2023 which will have impact on the assessee.
Thanks for reading “Major Direct Tax amendments introduced in Finance budget 2023“
Read more at: IT Return Filed After Due Date Deductions Denied U/S 80AC
