Miscellaneous

Deemed taxation of gifts

It is proposed that any gifts received by a Resident But Not Ordinarily Resident (RBNOR) from an Indian resident exceeding INR 50,000 shall be deemed to accrue or arise in India. Earlier this provision was applicable only for gifts received by non residents

Presumptive taxation

TCS on foreign remittance

The limit for total turnover or the gross receipts to avail presumptive taxation U/s 44AD of the Income tax Act in case of business has been proposed to increase from INR 2 crore to INR 3 Crore. Hence businesses having turnover/gross receipts up to INR 3 crore can now opt for presumption basis of taxation provided the aggregate of amounts received during the previous year in cash does not exceed 5% of turnover or gross receipts. This limit for assesses having profession has been proposed to increase from INR 50 Lakhs to 75 Lakhs -Section 44ADA.

Exemption towardsleave encashment

It is proposed to increase the rates of TCS from 5% to 20% without any threshold in case of foreign remittance towards purchase of overseas tour program and any other purpose (other than education, medical treatment and education loan obtained from financial institutions) under Liberalised Remittance Scheme (LRS)

Currently the exemption towards leave encashment at the time of resignation/retirement is exempt from taxes which is capped to a maximum of INR 3 lakhs. However it has been proposed to increase the limit from INR 3 lakhs to INR 25 Lakhs for non-government salaried employees-Section 10(10AA) of the Act

Time limit for completion of assessment proceedings

In a situation where the refund is due to the assessee for the financial year and the proceedings for assessment or reassessment is pending for such year, it has been proposed that the Assessing Officer can withhold the refund payable until such proceedings are completed-Section 245 (2) of the Act. In such cases the period from the date on which refund is withheld and until completion of assessment proceedings will be excluded.

It has been proposed to reduce TDS rate from 30% to 20% in case of taxable PF withdrawal (in case continuous contribution is less than 5 years) where PAN is not available- Section 192A

The time limit for completion of assessment proceedings U/s 143(3) of the Act has been proposed to increase to 12 months from the end of relevant assessment year in which income was assessed from the current time limit of 9 months. This change is applicable for the assessment proceedings to be completed from AY 2022-23 onwards.

Applies in case any income has been included in the return of income furnished by the taxpayer under section 139 of the Act for any assessment year and tax has been deducted at source on such income and paid to the credit of the Central Government in a subsequent financial year

In such a case the assessee can make application in the prescribed form to the Assessing Officer within two years from the end of the financial year in which such tax was deducted at source Then Assessing Officer shall amend the order of assessment or any intimation allowing credit of such tax deducted at source in the relevant assessment year

The Assessing Officer shall make rectification within 4 years under section 154 of the Act shall be reckoned from the end of the financial year in which such tax has been deducted.

TDS credit for income already disclosed in the return of income for past year

The amendment proposed to be effective from 1st October 2023.

It may also be noted that any refund arises on account of the rectification as mentioned above- the interest on refund due would be paid from the date of filing of application to the date on which refund is granted