Debt funds lose long-term capital gains benefit
No long-term capital gains benefit for debt funds with less than 35% in equities
What it means
- Income from debt funds to be taxed at the slab rate of taxpayer
- Parity in taxation with bank fixed deposits
- Applicable prospectively from FY24
- May hit investment in debt funds, banks could see deposit inflows
20% withholding tax on royalty/technical fee payments
Withholding tax rates raised to 20% from 10% on payments to non-residents
What it means
- India will be able to levy the tax treaty rate of 15% on US, UK Cos
- It was unable to levy this rate as domestic rate was lower at 10%
- Non-treaty countries will also face the higher 20% withholding tax
25% higher STT on F&O
- Securities Transaction Tax on options sale raised to 0.0625%from 0.05%
- STT on futures raised to 0.0125% from 0.01%
What it means
May impact F&O volumes on exchanges
REITs & InvITs get cost deduction
- Budget proposed to tax distribution by business trusts as income from other sources at the applicable rate
- Amendments propose to treat these payments as a return of capital with cost deductions
What it means
Lower tax as compared to that under the budget proposal
Tax measures for IFSCs
- Lower 10% withholding tax dividends received by non-residents from IFSC
- Waiver of surcharge on capital gains earned by GIFT Category III
- Extension of the 194LC benefit
- Withholding tax rate of 9% in place of 5% on overseas interest payments of debt
What it means
- Incentivise investment from non-residents into IFSC
- Attract more investors to the Gujarat GIFT City
- Create more job opportunities in the financial sector
- Create more funding options for investors
TDS on online gaming
- TDS on online gaming effective from April 1
- TDS to be deducted at the double rate, in case of non-compliance
What it means
Better tax compliance from online gaming companies
Personal income tax
- Additional tax not be more than the amount by which income exceeds Rs 7 lakh
- Income up to Rs 7 lakh not taxable under new tax regime
What it means
Relief for those earning slightly more than Rs 7 lakh
GST CHANGES
Provision for setting up GST Tribunal
What it means:
Help address piling up GST disputes
GST on goods imported under Bonded Warehouse Scheme.
What it means
Brings GST on domestically manufactured goods at par with imported ones under the scheme
Disputes below Rs 50 Lakhs by a single member bench
What it means
Fast resolution of indirect tax disputes