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Top highlights: Tax highlights

Proposal to comprehensively review the Income Tax Act in a period of 6 months to make it concise and easy to understand
No change in the corporate tax rate for domestic companies; the base corporate tax rate for foreign companies reduced from 40 percent to 35 percent
Tax slabs to be revised for individuals opting for the new regime; overall savings of INR 17,500 expected and a standard deduction to be increased to INR 75,000
An equalisation levy of 2 percent to be withdrawn from 1 August 2024
Consideration on buy-back of shares to be taxable in the hands of shareholders from 1 October 2024
Streamlining the holding period for classification of assets as long-term or short-term capital gains and new capital gains tax rate prescribed from 23 July 2024
TDS rates for specified payments to be rationalised; prosecution relaxed for TDS defaults if payment is made within the specified timeline
Attempt to reduce disputes backlog – Direct Tax Vivad se Vishwas Scheme, 2024 proposed; rationalisation of reassessment proceedings; limit for filing appeals to be increased
Scope of safe harbour rules to be expanded and transfer pricing assessment procedure to bestreamlined
Securities Transaction Tax on the sale of options and futures to be increased to 0.1 percent and 0.02 percent, respectively
Deduction to employer for a contribution towards the pension scheme increased to 14 percent of the employee’s salary

Key highlights under the GST law

A common time limit proposed for issuing demand notices and orders from FY25 onwards, irrespective of fraud or otherwise
Amendments related to the obligation to appear for summons to facilitate the appearance by an authorised representative
Amnesty Scheme provisions notified to provide for a conditional waiver of interest and penalty in respect of demands pertaining to FY18 to FY20; no refund of interest and penalty already paid
Enabling provisions to empower the government to regularise non-levy or short levy of GST, due to general trade practice
ITC of GST paid under reverse charge can be claimed based on the year in which the recipient issues the self-invoice; proposed amendments to provide the timeline to issue such self-invoices
Retrospective amendment proposed to extend the time limit for claiming ITC for FY18 to FY21 to returns filed by 30 November 2021
Restrictions on ITC for recipients removed in case tax is paid by supplier towards demands in cases of fraud, etc., from FY 25 onwards
Refund, with respect to goods subject to export duty, restricted irrespective of whether the said goods are exported with or without payment of taxes
The time limit for filing appeals before the Appellate Tribunal modified to avoid the appeals from getting time barred, on account of the Appellate Tribunal not coming into operation
The maximum amount of pre-deposit for appeals reduced before Appellant Authority/Appellant Tribunal

Key highlights under the Customs law

Customs duty structure will be revamped in the next six months to ease trade, remove inverted duty structure and reduce disputes
The central government will be empowered to specify certain manufacturing and other operations in relation to a class of goods that shall not be permitted in a warehouse under the MOOWR scheme
Exemption from GST compensation cess granted with retrospective effect from 1 July 2017 for goods imported by a unit or developer into a SEZ for authorised operations
Acceptance of different types of proof of origin provided in trade agreements will be enabled to align with new trade agreements that provide for self-certification
As a trade facilitation measure, the period of repair of aircraft/ships under the MRO scheme extended from 6 months to 1 year
Time limit for re-importing goods without payment of duty for repairs under warranty extended from 3 years to 5 years
Basic Customs duty reduced to 15 percent on mobile phones, PCBA for mobiles and mobile chargers
To support the energy transition, list of exempt capital goods will be used in manufacturing solar panels and cells expanded
A review undertaken with respect to 188 conditional exemptions/concessional rates out of which:

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