Latest Tax Updates in India – October 2024
As of October 2024, several significant updates have been announced regarding the taxation landscape in India, primarily stemming from the recent Budget 2024. Here’s a breakdown of the key changes:
1. Changes in TDS Rates
Several sections of the Income Tax Act have seen adjustments in the Tax Deducted at Source (TDS) rates, effective from October 1, 2024. Notably:
- Section 194H: TDS on commission or brokerage is reduced from 5% to 2%.
- Section 194-IB: TDS on rent payments has also decreased from 5% to 2%.
- Section 194M: The rate for certain payments has been adjusted from 5% to 2%.
- Section 194-O: TDS for e-commerce operators has been lowered from 1% to 0.1%【18†source】【19†source】.
2. Buyback of Shares
From October 1, 2024, shareholders will now be responsible for taxes on buyback proceeds, as payments made by companies for repurchasing their shares will be treated as dividends and taxed accordingly. The withholding tax rates have been set at 10% for residents and 20% for non-residents【18†source】.
3. Discontinuation of Aadhaar Requirement for PAN and ITR
As of October 1, 2024, it is no longer mandatory to quote Aadhaar numbers for PAN applications or Income Tax Return (ITR) filings. Taxpayers can use other identification documents, such as a passport or driving license【18†source】【20†source】.
4. Direct Tax Vivad Se Vishwas Scheme
The updated version of the Direct Tax Vivad Se Vishwas Scheme (DTVSV 2024) commenced on October 1, 2024. This scheme aims to facilitate the resolution of pending tax disputes. Taxpayers can avail themselves of this option until December 31, 2024【19†source】【20†source】.
5. Changes in Capital Gains Tax
A simplification in the capital gains tax regime has been proposed:
- The holding period for short-term capital gains on listed securities will be reduced to 12 months, while for all other assets, it will remain 24 months【19†source】【20†source】.
- The tax rate for short-term capital gains under Section 111A is set to increase from 15% to 20%【19†source】.
6. Corporate Tax Rate for Foreign Companies
The corporate tax rate for foreign companies has been reduced from 40% to 35% on certain income, effective from the 2025-26 assessment year【19†source】.
Conclusion
These updates are part of the government’s ongoing efforts to streamline the tax process and make compliance easier for taxpayers. It’s essential for individuals and businesses to stay informed about these changes to optimize their tax planning strategies. For more detailed information on these updates, you can refer to the official notices or consult a tax professional.
