Budget 2023’s major tax benefit for startups; loss carry forward benefit extended

• 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

New tax regime not to compel people to move from old tax regime, but has greater advantage, says FM Sitharaman

• Feb 02, 2023
  
  
• After presenting the Union Budget 2023, Finance Minister Nirmala Sitharaman said that the new taxation regime, while offering greater incentives for the middle class, is not aimed at compelling people to move from the old regime to the new tax regime. “This country has been waiting for the direct taxation to be simplified, to become easy in terms of compliance. Therefore the new tax regime that we brought 2-3 years ago, has now got greater incentives and attractions so that people can unhesitatingly move from the old to the new. We are not compelling anyone. But the new one is now attractive as it gives greater rebates,” said Sitharaman during a press conference.
  

Income Tax

Budget 2023: Now micro enterprises with up to Rs 3 cr turnover can opt for presumptive taxation

• Feb 02, 2023
  
  
• Ease of doing business for MSMEs: Among tax benefits for MSMEs announced in the budget, finance minister Nirmala Sitharaman on Wednesday enhanced the turnover limits to be eligible for presumptive taxation. Now micro enterprises with a turnover up to Rs 3 crore from earlier Rs 2 crore and certain professionals with a turnover up to Rs 75 lakh from earlier Rs 50 lakh will be eligible to be taxed presumptively provided their cash receipts are not more than 5 per cent of total receipts.
  

Income Tax

Maturity proceeds of life insurance policies with annual premium of over Rs 5 lakh to be taxed: FM

Feb 02, 2023

An individual will have to pay tax on the maturity amount of life insurance policies where the aggregate annual premium exceeds Rs 5 lakh, according to a Budget proposal presented on Wednesday. Finance Minister Nirmala Sitharaman in the Union Budget proposed "to provide that where aggregate of premium for life insurance policies (other than ULIP) issued on or after April 1, 2023, is above Rs 5 lakh, income from only those policies with aggregate premium up to Rs 5 lakh shall be exempt".

This will not affect the tax exemption provided to the amount received on the death of a person insured. It will also not affect insurance policies issued till March 31, 2023, she said.

Nidhi Manchanda, Certified Financial Planner, Head of Training, Research & Development at Fintoo, said that one of the major setbacks that are given in the finance bill is related to the taxability of the maturity proceeds of a life insurance policy.

Income Tax

Relief for these non-ITR filers from higher TDS in budget 2023

Feb 02, 2023

There may be some individuals who are not obligated to file their income tax return (ITR). However, these individuals cannot be classified as non-filers. As a result, Union Budget 2023 has proposed changing the definition of "specified person" in sections 206AB and 206CCA of the Income tax Act, 1961, to exclude a person who is not required to submit a return of income for the assessment year relevant to the said previous year.

Income Tax

Budget: FM proposes system to lessen litigation by IT department

Feb 02, 2023

In a bid to lessen litigation in tax disputes, Finance Minister Nirmala Sitharaman on Wednesday proposed a case management system where the Income Tax department would defer filing a lawsuit if an identical question of law is pending adjudication in high courts or the Supreme Court. Presenting the Union Budget for 2023-24 in the Lok Sabha, Sitharaman said a lot of time and resources are consumed in filing appeals involving identical legal issues pertaining to income tax.

Income Tax