Income Tax New Rules: There will be a change in the income tax rules in India from April 1, 2023. The new income tax rules will come into force from April 1.
As we are moving towards the new financial year 2023-24, it is very important to know about the changes in income tax rules in advance. The reason for this is that the proposed Finance Bill comes into force from the first day of the new financial year. This keeps us ready and prepared for necessary changes to improve our portfolio. Budget 2023, presented in Parliament on 1 February, has proposed to implement new income tax rules from 1 April. Come, let’s know about the new rules of income tax…
TDS cut for salaried employees
As per media reports, the new tax regime is coming into force from April 1 and as a result, taxpayers having salary income may see a reduction in TDS. For those taxpayers whose taxable income is less than Rs.7,00,000 and who have opted for the new tax regime. No TDS will be deducted on account of additional exemption provided under section 87A of the Income Tax Act, 1961 (ITA).
Overload reduction
Apart from this, the surcharge applicable under the new tax regime has been reduced from 37 per cent to 25 per cent for individuals whose taxable income exceeds Rs 5 crore annually. The reduction in overall TDS will depend on the scheme chosen by the taxpayer and the taxable income. However, some relief can be expected especially for taxpayers opting for the new tax regime.
Electronic gold not taxable
From April 1, the physical form of gold can be transferred into EGR and vice versa by a SEBI-registered vault manager, free of any capital gains tax. The objective of this measure is to promote the concept of electronic gold and encourage seamless conversion.
Foreign gift will be taxable
Any gift exceeding Rs.50,000 received by a resident of India but not ordinarily resident (RNOR) will be taxable in his hands. As per the Income Tax Act, 1961, a person is NOR, if a person has been a non-resident in India for 9 out of 10 years preceding that year or has stayed in India for a period of 729 days or less during the seven years.
TDS on listed debentures
The provision of section 193 of the Income Tax Act provides for exemption from TDS in respect of payment of interest on certain securities. Clause (IX) of the proviso to the aforesaid section provides that no tax is to be deducted in the case of interest payable on any security issued by a company, where such security is in dematerialized form and is listed on a recognized stock exchange. Is. However, this exemption has been withdrawn from April and 10 per cent TDS will be deducted from all interest payments including listed debentures.
TDS and taxability on net winnings from online games
The taxability of winnings from online games will be under the provisions of the new section 115BBJ of the Income Tax Act and a flat 30 per cent tax will be applicable on such winnings. The amount of taxes will be deducted at source from the winnings in the online game.
Claim benefit under section 54 and section 54F limited
Under the provisions of Section 54 and 54F of the Income Tax Act from the new financial year, only profit up to Rs 10 crore will be exempted. The remaining capital gains ie above Rs 10 crore will now be taxed at a flat rate of 20 per cent (with indexation). It may be noted that the maximum surcharge applicable on income from capital gains is limited to 15 per cent under both the old regime and the new tax regime.
Tax benefit under section 54 is given to a taxpayer who sells his residential house and acquires another residential house from the sale proceeds. Tax benefit is available on long term capital gain arising from sale of any capital asset other than house property under section 54F.
Higher capital gains on market linked debentures
Market-Linked Debentures (MLDs) are instruments that offer fixed returns to their investors based on the performance of an underlying market index. From FY 2023 onwards, capital gains resulting from transfer or redemption or maturity of such instruments will be treated as short-term capital gains and taxable at applicable slab rates. Earlier the gains were claimed to be equity in nature and taxed at 10%/15% depending on the holding period of the instrument.
Higher capital gains tax under section 24
The cost of acquisition or cost of improvement shall not include the amount of interest claimed under section 24 or Chapter VIA. Accordingly, the capital gain on sale of property would be higher and the double deduction claimed by the taxpayer earlier would be done away with. So, as you step into the new financial year, be aware of the above mentioned changes to make the right decisions regarding your money.
