Acquisition cost of intangible assets now nil

• Feb 03, 2023
  
  
• The Budget proposals specify that the cost of acquisition or the cost of improvement of an intangible asset or any other right, shall be nil.
  This provision was introduced as courts in many cases have ruled against the I-T department that the capital gains computation mechanism would fail where the cost of acquisition of any asset cannot be determined. Earlier, the I-T Act was amended to provide that the cost of acquisition of goodwill would be nil. “This now covers intangibles like brands, trademarks and commercial rights,” said Girish Vanvari, founder of Transaction Square.
  

Income Tax

How many times can you switch between new tax regime and old tax regime?

• Feb 03, 2023
  
  
• Budget 2023 has made the new income tax regime as the default option for income taxpayers. Hence, unless an individual specifies that he/she is opting for the old income tax regime, then revised new income tax regime will be applicable
  
  Now the question that many taxpayers will ask is: will the benefit of switching between old and new income tax regime continue?
  
  Yes, an individual can switch between the new tax regime and the old tax regime in every financial year. However, the facility to switch between the new and old tax regimes is available only for those individuals having salaried income and does not have business income
  

Income Tax

FPIs stare at higher tax on debt investment

• Feb 03, 2023
  
  
• Foreign portfolio investors (FPIs), who are enjoying a concessional tax rate of 5% on the interest income of rupee-denominated bonds, could be staring at a higher tax outgo after June 30, 2023.
  
  FPIs enjoy a lower TDS rate or withholding tax of 5% on the overall interest earned on such bonds issued by Indian firms and government securities since 2013 under Section 194LD of the Income Tax Act.
  

Income Tax

Govt wants to eventually move to exemption-free I-T regime with lower taxes: Revenue Secy

• Feb 03, 2023
  
  
• A day after the Budget announcement of a revamped personal income tax regime, Revenue Secretary Sanjay Malhotra on Thursday said the government would eventually like to move to a simple and exemption-free tax structure with lower rates.According to an analysis by the Revenue Department, an individual earning Rs 15 lakh in a year will have to claim deductions of at least Rs 3.75 lakh under the old tax regime, otherwise the new revamped tax regime with lower rates proposed in 2023-24 will be more beneficial.
  

Income Tax

• Feb 02, 2023
  
  
• Credit and finance for MSMEs: Addressing the delayed payment crisis faced by micro and small enterprises — among the biggest challenges to their growth — the budget 2023-24 proposed to amend section 43B of the Income Tax act with a new clause (h) in order to include payments made to such enterprises. The section will provide for any sum paid by the assessee (buyer) to MSEs beyond the 45-day time limit (specified in section 15 of the MSME Development Act) will be allowed as deduction only when the payment is actually made to MSEs.
  

Income Tax

• Feb 02, 2023

Finance Minister Nirmala Sitharaman announced incentives for the startup ecosystem in the country and extended the benefit of carry forward of losses from the current 7 years to 10 years from the date of incorporation of the firm. Also, the time period on income tax benefit to companies registered as startups increased further by another year. Sitharaman also acknowledged that India has the third largest ecosystem of startups globally.

Income Tax

Budget 2023: Big jump in leave encashment limit for non-govt staff

• Feb 02, 2023
  
  
• In a positive move for taxpayers, the government has increased the limit for leave encashment from Rs 3 lakh to Rs 25 lakh, Finance Minister Nirmala Sitharaman announced while announcing Budget proposals for the financial year 2023-24
  
  “The limit of Rs 3 lakh for tax exemption on leave encashment on the retirement of non-government salaried employees was last fixed in the year 2002, when the highest basic pay in the government was Rs 30,000 per month. In line with the increase in government salaries, I am proposing to increase this limit to Rs 25 lakh,” the FM said.
  

Income Tax

Budget 2023: ?10 cr deduction limit imposed on capital gains on re-investment in residential properties

• Feb 02, 2023
  
  
• The government on Wednesday imposed a limit of ?10 crore for deduction on long-term capital gain tax for reinvestment in residential properties under Section 54 and 54F of the Income Tax Act.
  
  These two sections deal with reinvestment of proceeds from sale of long-term assets (housing or other capital assets) to buy residential properties.
  
  "For better targeting of tax concessions and exemptions, I propose to cap deduction from capital gains on investment in residential houses under sections 54 and 54F to ?10 crore," Finance Minister Nirmala Sitharaman said in her budget speech.
  

Income Tax