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Direct Taxes

Posted 01 Feb 2025

Updated 04 Feb 2025

3 min read

  • New income-tax bill: Government will introduce the bill to carry forward the same spirit of "Nyaya" to achieve Good Governance by simplifying provisions and making them responsive.
  • TDS/TCS rationalization
    • Reduction in rates: TDS will be rationalized by reducing rates and thresholds, with higher limits for tax clarity. The senior citizen interest deduction limit raised to ₹1 lakh, and TDS on rent increases to ₹6 lakh, benefiting small taxpayers.
    • Threshold to collect tax collection at source (TCS) on remittances: Under RBI's Liberalized Remittance Scheme (LRS) is proposed to be increased from ₹ 7 lakh to ₹ 10 lakh.
    • Decriminalization: Provide the relaxation to delay for payment of TCS up to the due date of filing statement was decriminalized.
    • Voluntary Compliance: Proposed to extend the time-limit to file updated returns, from the current limit of two years, to four years by voluntary compliance by taxpayers who had omitted to report their correct income.
  • Ease of Doing Business 
    • Streamline the process of transfer pricing: A new scheme will allow determining arm's length prices for international transactions over a 3-year block period.
    • Scope of safe harbour rules expanded: With a view to reduce litigation and provide certainty in international taxation.
    • Senior Citizens' Withdrawal Exemption: Withdrawals from old NSS accounts by senior citizens, post-August 29, 2024, will be tax-exempt. NPS Vatsalya accounts will be treated like regular NPS accounts, within limits.
  • Employment and Investment
    • Tax certainty: A presumptive taxation regime will be introduced for non-residents providing services to electronics manufacturing companies and taxation in infrastructure sector AIFs.
    • Tonnage Tax Scheme for Inland Vessels: Proposed to be extended to inland vessels registered under the Indian Vessels Act, 2021.
    • Extension for incorporation of Start-Ups: Extended the period of incorporation by 5 years for start-ups which are incorporated before April 01, 2030. 
    • International Financial Services Centre (IFSC): Specific benefits to ship-leasing units, insurance offices and treasury centres of global companies which are set up in IFSC.
    • Extension of investment date for Sovereign and Pension Funds: The investment period for Sovereign Wealth and Pension Funds in the infrastructure sector is extended by five years.
  • Personal Income- tax Reforms with special focus on middle class
    • New tax regime exemption: No income tax payable upto income of ₹ 12 lakh under the new regime.
    • Standard Deduction: Raised to ₹ 75,000.
    • Under new tax regime, revise tax rate slabs are as follows:
  • Tags :
  • Ease of Doing Business
  • Liberalized Remittance Scheme
  • TDS/ TCS
  • Personal Income Tax
  • International Financial Services Centre

Articles Sources

https://pib.gov.in/PressReleasePage.aspx?PRID=2098352
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