10 Proposed Amendments Relating to Direct Taxes in the Budget Proposal 2024-25

1. Substantial relief in the new tax regime with new slabs and tax rates

2. Standard deduction to salaried individuals and pensioners increased from Rs 50,000 to Rs 75,000

3. Family pension deduction increased from Rs 15,000 to 25,000

4. Non-Govt. employer contribution to New Pension Scheme: Amount of deduction permissible under section 80CCD proposed to be increased from 10% to 14% in the case of the non-government employer.

5. Angel Tax Abolished: Tax on share premium of private companies as per provisions of section 56(2) (viib) shall not apply from the FY 2024-25

6. Rationalization of taxation of Capital Gains

• Short-term capital gains on specified financial assets shall be taxed at a rate of 20% instead of 15% - All other financial assets and non-financial assets shall continue to be taxed at the applicable tax rate.
• Long-term capital gains on financial and non-financial assets will attract a tax rate of 12.5%. The limit of exemption of capital gains on certain listed financial assets raised from Rs 1 lakh to Rs 1.25 lakh

7. Impact of change in Long Term Capital Gains (LTCG) rate and removal of indexation in a few test cases

Refer to the table below

8. Rationalization of TDS Rates

• Tax deducted at source on payment of insurance commission, life insurance policy, commission on the sale of lottery tickets, commission of brokerage, payment of rent by individual or HUF and payment of certain sums by certain individuals or HUF have been proposed to be reduced from 5% to 2%.
• TDS on payment of certain sums by e-commerce operators to e-commerce participants has been proposed to be reduced from 1% to 0.1%
• Late payment of TDS decriminalised - in case the payment is made before the time prescribed for filing TDS statement

9. Litigation and Appeals

• For the resolution of certain income tax disputes pending in appeal, Vivad Se Vishwas Scheme, 2024 has been proposed
• Monetary limits for filing appeals related to direct taxes, excise, and service tax in the Tax Tribunals, High Courts, and Supreme Court have been proposed to be increased to ₹ 60 lakh, ₹ 2 crore, and ₹ 5 crore respectively.

10. Amendments to the Prohibition of Benami Property Transactions Act, 1988 - The Act proposes to provide immunity from penalty and prosecution to benamidar on full and true disclosure.