Salient Features of the Finance Act, 2023
A. Providing Tax Relief Under New Personal Tax Regime
• New Tax Regime is Default Regime.
• New Tax Rates under New Regime.
• Section 87A Rebate till ` 7 lakh under New Regime.
• Standard Deduction of ` 50,000 available under New Regime.
• Surcharge for HNIs reduced to 25% from 37%.
• Leave Encashment increased to ` 25 lakh.
B. Socio-Economic Welfare Measures
• Promoting timely payments to Micro and Small Enterprises.
• Increasing threshold limit for Co-operatives to withdraw cash without TDS.
• Penalty for cash loan/transactions against primary co-operatives.
• Relief to start-ups in carrying forward and setting off of losses.
• Extension of date of incorporation for eligible start up for exemption.
• Conversion of Gold to Electronic Gold Receipt and vice versa.
• 15 per cent concessional tax to promote new manufacturing co-operative society.
C. Ease of Compliance
• Increasing threshold limits for presumpting taxation schemes.
D. Widening and Deepening of Tax Base and Anti Avoidance
• TDS and Taxability on Net Winnings from Online Games.
• Increasing rate of TCS of certain remittances.
• Limiting the roll over benefit claimed under section 54 and section 54F.
• Preventing permanent deferral of taxes through undervaluation of inventory.
• Rationalisation of exempt income under life insurance policies.
• Alignment of provisions of section 45(5A) with the TDS provisions of section 194-IC.
• Prevention of double deduction claimed on interest on borrowed capital for acquiring, renewing or reconstructing a property.
• Defining the cost of acquisition in case of certain assets for computing capital gains.
E. Improving Compliance and Tax Administration
• Introduction of the authority of Joint Commissioner (Appeals).
• Rationalisation of Appeals to the Appellate Tribunal.
• Assistance to authorised officer during search and seizure.
• Rationalisation of the provisions of the Prohibition of Benami Property Transaction Act, 1988 (the PBPT Act).
• Alignment of timeline provisions under section 153 of the Act.
• Provisions relating to re-assessment proceedings.
F. Rationalisation
• Facilitating TDS credit for income already disclosed in the return of income of past year.
• Clarification regarding advance tax while filing Updated Return.
• Bringing the non-resident investors within the ambit of section 56(2)(viib) to eliminate the possibility of tax avoidance.
• Providing clarity on benefits and perquisites in cash.
• Rationalisation of the provisions of Charitable Trust and Institutions.
• Set-off and withholding of refunds in certain cases.