Amendments from Union Budget 2024, w.e.f 1 Oct, 2024

Summary of the key amendments from the Union Budget 2024, effective October 1, 2024:

1. Direct Tax Vivad Se Vishwas Scheme (VSV) 2.0:
   Aimed at resolving tax disputes related to tax, interest, penalties, or fees pending as of July 22, 2024. If the tax department filed the appeal, taxpayers will benefit from a reduced settlement at 50% of the tax liability.
2. Share Buyback Taxation:
   Taxation on share buybacks will now align with dividend taxation. Shareholders will be taxed according to their income tax slabs. Companies must withhold Tax Deducted at Source at 10% for resident shareholders and 20% for non-residents. The cost of shares cannot be offset against the buyback proceeds, but it can be considered a capital loss. The government has modified taxation on share buybacks to be in line with dividends. Now, shareholders will be taxed according to their income tax slabs on buyback proceeds. Companies must also withhold Tax Deducted at Source at 10% for resident shareholders and 20% for non-residents. The cost of the shares cannot be set off against the buyback proceeds but may be considered a capital loss.
3. TDS Rate Changes: Several changes include:
   • Life Insurance Policy Payments (Section 194DA): Reduced from 5% to 2%.
   • Commission on Lottery Tickets (Section 194G): Reduced from 5% to 2%.
   • Commission/Brokerage Payments (Section 194H): Reduced from 5% to 2%.
   • Rent Payments (Section 194-IB): Reduced from 5% to 2%.
   • E-commerce Operators (Section 194-O): Reduced from 1% to 0.1%.
   • Repurchase of Mutual Fund/UTI Units (Section 194F): Omitted.
4. Black Money Act (BMA) Amendment:
   Penalties u/s 42 and 43 of the BMA will no longer apply if undisclosed foreign assets are less than Rs. 20 lakh, offering relief for smaller amounts.
5. Securities Transaction Tax :
   • Futures: Securities Transaction Tax will rise from 0.0125% to 0.02%.
   • Options: Securities Transaction Tax will increase from 0.0625% to 0.1%, applied to the premium amount.
6. Floating Tax Deducted at Source Rate:
   A 10% Tax Deducted at Source will apply to interest on central and state government bonds, including Floating Rate Savings Bonds. No Tax Deducted at Source will be deducted if the total interest income is less than Rs. 10,000 in a financial year.
7. Aadhaar Card:
   From October 1, 2024, individuals will no longer be able to quote their Aadhaar Enrolment ID in permanent account number applications and income tax returns; they must provide the Aadhaar number instead.

Summary of Important Taxation Amendments – Budget 2024

1. New Tax Regime Tax Slabs for F.Y. 2024-25

Income Slab (₹)	Tax Rate (%)
0 – 3,00,000	Nil
3,00,001 – 7,00,000	5%
7,00,001 – 10,00,000	10%
10,00,001 – 12,00,000	15%
12,00,001 – 15,00,000	20%
Above 15,00,000	30%

Key Enhancements

• Standard Deduction for Salaried Employees: Increased from ₹50,000 to ₹75,000.
• Family Pension Exemption: Increased from ₹15,000 to ₹25,000.

2. Stock Market and Capital Gains : Short-Term Capital Gains (STCG) : On Equity Shares under Section 111A: Tax rate increased from 15% to 20%.

Long-Term Capital Gains (LTCG)

• On Equity Shares under Section 112A:
  • Tax rate increased from 10% to 12.5%.
  • Exemption limit increased from ₹1,00,000 to ₹1,25,000.
• On All Other Assets:
  • Tax rate reduced from 20% to 12.5%.
  • Indexation benefit eliminated.

Effective Dates : Changes in Capital Gains Taxation are applicable immediately (from 23rd July 2024).

3. Securities Transaction Tax (STT)

• Futures: Rate increased from 0.0125% to 0.02%.
• Options: Rate increased from 0.0625% to 0.1%.

Effective Date: STT rate changes will apply from 1st October 2024.

4. Buyback of Shares : Taxation on buyback of shares will now be in the hands of the recipient (shareholder).