1. Comprehensive Review of Income Tax Act, 1961 - proposed to be completed in 6 months
2. 2 tax exemption regimes for charities are proposed to merged into one
3. TDS rate on e-commerce operators to be reduced from 1% to 0.1%
4. Credit of TCS to be given in the TDS to be deducted on salaries
5. Proposes to simplify reopening and re-assessment - reducing the time period
6. SOP for TDS defaults, simplify and rationalise compounding guidelines
7. FM: Simplification and Rationalisation of Capital Gains
8. Re-assessment in search cases reduced to 6 years from 10 years before date of search
9. STCG on certain financial assets to attract 20% tax
10. LTCG all financial and non-financial gains - 12.5%
11. Listed financial assets held for more than 1 year classified as long term
12. Limit of exemption on LTCG on certain assets increased to 1.25 lakhs
13. Announces Vivaad se Vishwas Scheme 2024
14. To dispose of backlogs of first appeal, plan to deploy more officers
15. Expand the scope of "safe harbor" rules
16. Proposes to increase monetary limits for filing appeals
17. To bolster Indian startup ecosystem : Abolish Angel tax for all classes of tax
18. To streamline TP assessment procedure
19. Simpler tax regime for foreign shipping cos. operating domestic cruises in the country
20. Propose to reduce corporate tax on foreign cos. from 40% to 35%
21. STT on F&O is increased 0.2% & 0.1%
22. Proposes to tax income from buyback
23. Non-reporting of movable assets of upto Rs. 20 Lacs proposed to be de-penalised under IBC
24. Withdrawal of Equalisation Levy
25. Personal IT rates – under the new tax regime – Standard deduction for salaried employees to increase from Rs. 50K to 75K
26. Revises tax structure under New Regime

 

Ministry of Finance

Union Budget 2024-25: Advancing Economic Growth through Infrastructure Initiatives

Posted On: 23 JUL 2024

The Union Minister of Finance and Corporate Affairs, Smt. Nirmala Sitharaman, presented the Union Budget 2024-25 in Parliament today. This budget envisions sustained efforts across nine key priorities to generate ample opportunities for all, in pursuit of ‘Viksit Bharat.’ The key priorities include Productivity and Resilience in Agriculture, Employment & Skilling, Inclusive Human Resource Development and Social Justice, Manufacturing & Services, Urban Development, Energy Security, Infrastructure, Innovation, Research & Development, and Next Generation Reforms. Among these, significant announcements have been made in relation to the infrastructure sector.

Infrastructure Development

The Finance Minister emphasized the significant investment the Central Government has made over the years in building and improving infrastructure, which has had a strong multiplier effect on the economy. The government will maintain strong fiscal support for infrastructure over the next five years, while balancing other priorities and fiscal consolidation. An allocation of ₹11,11,111 crore for capital expenditure, which is 3.4 percent of GDP, has been made this year.

The government will encourage states to provide similar scale support for infrastructure, aligning with their development priorities. A provision of ₹1.5 lakh crore for long-term interest-free loans has been made this year to assist states in their resource allocation. Investment in infrastructure by the private sector will be promoted through viability gap funding and supportive policies and regulations. A market-based financing framework will also be introduced.

Despite many financial innovations in infrastructure financing in the recent years, capital expenditure by the Union and State Governments still has the central role in funding of large-scale infrastructure projects. The capital expenditure of the Union Government increased by 2.2 times from FY21 to FY24 (PA) while that of the State governments increased by 2.1 times during the same period.

The net flow of funds to infrastructure sectors through bank credit between March 2023 to March 2024 was only around ₹79,000 crore, much less than the GBS by the Union Government for either railways or roads. The net flow of bank credit between March 2020 and March 2024 was concentrated in only a few sectors roads, airports and power. However, the credit growth to infrastructure sectors in FY24 recovered to 6.5 per cent, as against the growth of 2.3 per cent, in FY23.

The gross inflow of external commercial borrowings to infrastructure sectors also picked up to USD 9.05 billion in FY24, as against an average of USD 5.91 billion during FY20 to FY23. The resource mobilisation by infrastructure sectors through debt and equity issuances in the capital market was just over ₹1,00,000 crore during FY24. Real estate investment trusts REITs) have raised ₹18,840 crore from year 2019 to 2024 while Infrastructure investment trusts (InvITs) raised a total of ₹1,11,294 crore in the last five years (2019-2024).

Existing Mechanisms for Fostering Public Private Partnership (PPP)

• Public Private Partnership Appraisal Committee (PPPAC)
• Apex body for appraisal of central sector PPP projects.
• 77 projects with a total cost of ₹2.4 lakh crore were recommended from FY15 to FY24.
• Viability Gap Funding (VGF)
• Assistance to financially unviable but socially/economically desirable PPP projects.
• 57 projects costing ₹64,926. One crore was granted in-principle approval and 27 projects costing ₹25,263.8 crore were granted final approval from FY15 to FY24.
• Total VGF approval of ₹5,813.6 crore (both Union Government & State share) from FY15 to FY24.
• India Infrastructure Project Development Fund Scheme
• Financial support for project development of PPP Projects
• Notified in November 2022 with a total outlay of ₹150 crore for three years from FY23 to FY25.
• 28 proposals have been approved.
• National Monetisation Pipeline (NMP)
• NMP was announced in August 2021 on the principle of ‘asset creation through monetisation’ i.e., tapping private sector investment for new infrastructure creation.
• The aggregate monetisation potential under NMP was estimated at ₹6.0 lakh crore through core assets of the Government, over four-years from FY22 to FY25.
• Other Supportive instruments
• Reference guides for setting up state PPP units, PPP project appraisal, and project implementation mode selection have been made.
• Web-based toolkits, post-award contract management toolkit and contingent liability for project sponsoring authorities have been developed to help them in PPP structuring.

Pradhan Mantri Gram Sadak Yojana (PMGSY)

The Finance Minister in the Union budget announced that Phase IV of PMGSY will be launched to provide all-weather connectivity to 25,000 rural habitations which have become eligible in view of their population increase.

 

The Pradhan Mantri Gram Sadak Yojana, launched on 25th December 2000, aims to provide all-weather access to eligible unconnected habitations and is a 100% Centrally Sponsored Scheme. As of July 23, 2024, 8,10,083 km of road has been sanctioned, with 7,65,530 km completed. A total of ₹3,24,177 crore has been spent on this scheme.

Irrigation and Flood Mitigation

For irrigation and flood mitigation in Bihar, the government will provide financial support for projects with an estimated cost of ₹11,500 crore through the Accelerated Irrigation Benefit Programme and other sources. This includes the Kosi-Mechi intra-state link and 20 other ongoing and new schemes. The Union budget also announced assistance for flood management, landslides, and related projects in Assam, Himachal Pradesh, Uttarakhand, and Sikkim.

The Union Budget 2024-25 demonstrates a strong commitment to advancing infrastructure and economic growth. The continued emphasis on public-private partnerships and infrastructure investment reflects the government's vision of a ‘Viksit Bharat.’ With sustained efforts and strategic initiatives, India is well-positioned to achieve significant economic progress and development in the coming years.

 

Press Information Bureau
Government of India
Ministry of Finance

Dated: 28 JUN 2024

India and USA extend the Transitional Approach on Equalisation Levy 2020 until June 30, 2024

On October 8, 2021, India and the United States joined 134 other members of the OECD/G20 Inclusive Framework (including Austria, France, Italy, Spain, and the United Kingdom) in reaching agreement on the Statement on a Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalization of the Economy.

On October 21, 2021, the United States AND Austria, France, Italy, Spain, and the United Kingdom reached a political compromise on the transitional approach to the unilateral measures in force while Pillar 1 is implemented. The compromise is reflected in the joint statement that was issued by those six countries on that date (“October 21 Joint Statement”).

On November 24, 2021, India and the United States agreed that the same terms that apply under the October 21 Joint Statement shall apply between India and the United States with respect to India’s charge of 2% equalisation levy on e-commerce supply of services and the United States’ trade action regarding the said Equalisation Levy. The validity of this agreement was from 1st April 2022 till implementation of Pillar One or 31^st March 2024, whichever is earlier. This was stated in public statements made by both sides (“November 24 Statements”).

On December 18, 2023, the Inclusive Framework issued a statement calling for a finalization of the text of the Pillar 1 multilateral convention by the end of March 2024 with a view to holding a signing ceremony by the end of June 2024.

On February 15, 2024, the United States AND Austria, France, Italy, Spain, and the United Kingdom decided to extend the political compromise set forth in the October 21 Joint Statement until June 30, 2024. That decision is reflected in the joint statement (“Updated October 21 Joint Statement”) issued by them on February 15, 2024.

In light of above developments, India and the United States have decided to extend the validity of the agreement reflected in November 24 Statements until June 30, 2024. All other terms of the transitional approach remain the same.

India and United States will remain in close contact to ensure that there is common understanding of the respective commitment and endeavour to resolve all issues on this matter through constructive dialogue.

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TAXSUTRA NOTE:

Earlier in 2020, Office of United States Trade Representative [USTR] initiated Sec. 301 investigation into India's Equalisation Levy 2.0 which was legislated in India vide Finance Act, 2020 and consequently India in its response strongly defended the levy on the ground that: 1) the EL was applied only prospectively, and has no extra-territorial application, 2)  The levy does not discriminate against any US companies, as it applies equally to all non-resident e-commerce operators, irrespective of their country of residence, 3) EL was one of the methods suggested by 2015 OECD/G20 Report on Action 1 of BEPS Project which was aimed at tackling the taxation challenges arising out of digitization of the economy and 4) The purpose of the Equalization Levy is to ensure fair competition, reasonableness and exercise the ability of governments to tax businesses that have a close nexus with the Indian market through their digital operations. 

Click here to read the USA press release and India response.

ANNEXURE -A

 

S. No	HS		Quantum of Imports  2021-22       to 2023-24	CIF value   of imports  2021-22 to 2023-24  (year wise)	Quantum Of domestic production 2021-22 to 2023-24 (year wise)	Value of domestic production 2021-22 to 2023-24 (year wise)	Unit Price (CIF)	Existing Duty	Proposed Duty	Revenue implication of  the proposal	Implications of the proposal for the domestic industry
	Code	Description of the Product

 

 

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

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New Delhi, 13^th May, 2024

 Press Release

CBDT releases new functionality in AIS

Annual Information Statement (AIS) is available to all registered Income Taxpayers through the compliance portal, accessible through the e-filing website (www.incometax.gov.in). AIS provides details of a large number of financial transactions undertaken by the taxpayer which may have tax implications. AIS is populated based on the financial data received from multiple information sources.

In AIS, taxpayer has been provided with a functionality to furnish feedback on every transaction displayed therein. This feedback helps the taxpayer to comment on the accuracy of the information provided by the Source of such information. In case of wrong reporting, the same is taken up with the Source for their confirmation, in an automated manner. It may be noted that, information confirmation is currently made functional with regard to information furnished by Tax Deductors/Collectors and Reporting Entities.  

Income Tax Department has now rolled out a new functionality in AIS to display the  status of  information confirmation process. This will display, whether the feedback  of the taxpayer has been acted upon by the Source, by  either, partially or fully accepting or rejecting the same. In case of partial or full acceptance, the information is required to be corrected by filing a correction statement by the Source. The following attributes shall be visible to the taxpayer for status of Feedback confirmation from Source.

• Whether feedback is shared for confirmation: This will let the taxpayer know if the feedback has been shared with the Reporting Source for confirmation or not.
• Feedback Shared On: This will let the taxpayer know the date on which the feedback has been shared with the Reporting Source for confirmation.
• Source Responded On: This will let the taxpayer know the date on which the Reporting Source has responded on the feedback shared with it for confirmation.
• Source Response: This will let the taxpayer know the response provided by the Source on the taxpayer's feedback (if any correction is required or not).

This new functionality is expected to increase transparency by displaying such information in AIS to the taxpayer. This is another initiative of the Income Tax Department towards ease of compliance and enhanced taxpayer services.

(Surabhi Ahluwalia)

Pr. Commissioner of Income Tax

(Media & Technical Policy) &

Official Spokesperson, CBDT