Some key amendments from the Union Budget, 2024 that will take effect from October 1, 2024:
1. Direct Tax Scheme (VSV) 2.0 :
To address the backlog of tax disputes, Government of India introduced Vivad se Vishvas Scheme 2.0. This scheme aims to reduce income tax litigation by enabling taxpayers to resolve pending income tax appeals, writs, and petitions before various appellate authorities, including the Supreme Court and high courts, as of July 22, 2024.
2. Tax on buyback of shares :
An amendment is brought into the tax treatment of buyback of shares by Companies. Any consideration received upon buyback of shares would be treated as dividend and taxed accordingly. Consequently, any loss on cancellation of share capital pursuant to buyback would be available to be claimed as capital loss. Nature of such capital loss as to long term or short term shall be determined based on period of holding of shares.
Companies must also withhold TDS at 10% for resident shareholders and 20% for non-residents.
3. TDS Rate Changes :
Changes in TDS rates are to take effect as under:
| Particulars | Section | Old rates | New rates |
| Life Insurance Policy Payments | 194DA | 5% | 2% |
| Commission on Lottery Tickets | 194G | 5% | 2% |
| Payment of Commission/Brokerage | 194H | 5% | 2% |
| Payment of Rent | 194IB | 5% | 2% |
| Payment by E-commerce Operators | 194O | 1% | 0.10% |
| Payments on Repurchase of Mutual Fund/UTI Units | 194F | 20% | omitted |
4. The Black Money Act (BMA) Amendment :
Penalties under Sections 42 and 43 of the Black Money Act will no longer apply if the undisclosed foreign asset does not exceed Rs. 20 lakh. This provides some relief for smaller undisclosed amounts.
5. Securities Transaction Tax (STT) :
For futures transactions, STT will increase from 0.0125% to 0.02%.
For options transactions, STT will rise from 0.0625% to 0.1%, applied to the premium amount.
For detailed discussion on the above amendments, please feel free to connect at devadhaantu@devadhaantu.in
