April 2023
Hon'ble Finance Minister Smt. Nirmala Sitharaman had presented Finance Bill 2023 on 1st Feb, 2023, being the last full budget before the Union elections. While moving the Finance Bill in Lok Sabha for approval, significant amendments were introduced which were not forming part of the original Finance Bill tabled in Parliament on 1st February.
We have covered few important tax amendments and its implications for your update.
Marginal Relief u/s 87A for New Tax Regime u/s 115BAC(1A)
To provide relief to individual, HUF, AOP & BOI under the new scheme, marginal relief is provided under the Act with respect to income exceeding Rs.7,00,000.
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TCS rate capped to 20% if collectee does not furnish his PAN or is a non-filer of income-tax return
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Changes in Taxation for Specified Mutual Funds
Change in taxation of mutual funds with respect to mutual funds purchased after 31-03-2023. To know more in detail, please click here.
Increase in Tax Rate for Royalty & FTS for Non-Residents
Earlier, income earned by way of Royalty & FTS (Fees for Technical Services) by a non-resident not having a Permanent Establishment (PE) in India was taxable under the domestic tax provisions @ 10% plus applicable surcharge and cess on gross basis. Now tax rate has increased from 10% to 20% w.e.f. 1st April, 2023 vide Finance Act, 2023.
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TCS on Liberalised Remittance Scheme
TCS was collected on remittance made outside India under LRS scheme. Finance Act 2023 has expanded the scope of TCS provisions to include even remittance in India under LRS w.e.f 1st July, 2023. For eg. Payment to GIFT City under LRS shall also be covered within scope of TCS provisions.
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