Important Income Tax Amendment Applicable For F.Y. 2023-24 (A.Y. 2024-25)

Applicable Sec

( This is applicable for all such policies issued on or after 01.04.2023)

Taxability and exemption with regard to LIP (other than ULIP)

(i) premium payable for a policy doesn’t exceed Rs. 5,00,000 or 10% of capital sum assured

(ii) where more than one policy taken, then exemption shall be available for all those policies where the aggregate of the premium payable doesn’t exceed Rs. 5,00,000 or 10% of capital sum assured during the tenure of all such policies.

(however exemption will be available for any amount received on the death of person)

Calculation

(excluding the premium already claimed u/s 80C)

For claiming expenditure incurred on the procurement of goods and services from “Micro enterprise” or “small enterprise” as defined under the prov. of MSMED Act, 2006 payment to the supplier covered under MSME unit should not exceed as per sec 15 of MSMED Act which is –

(i) where an agreement is made, it should not exceed the tenure of 45 days or tenure specified in the agreement whichever is lower.

(ii) in case of no agreement , not more than 15 days. 

(Micro ent- investment in Plant & Mach or equipment > 1 crore and Annual turnover > 5 crore) 

(Small ent- investment in Plant & Mach or equipment > 10 crore and Annual turnover > 50 crore) 

Turnover excludes export .

Plant & machinery exclude investments in pollution control, research and development, and the installation of safety devices

Even after making the payment on or before the due date of filing of ITR, it will not be allowed on accrual basis.

All such expenditure which are disallowed will increase taxable profit of the entity.

Note: (Definition of enterprise of MSMED Act has not covered Trader of goods yet. It only includes manufacturer and service provider). (Hence , the prov. of 43B(h) cover only those supplier which are manufacturer / service provider)

With regard to Donation made to other Trust

Any amount credited or paid other than corpus donation to any fund or trust or institution or any university or other educational institution or any hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or

sub-clause (via) of clause (23C) of section 10 of the Act or other trust or institution registered under section 12AB shall be treated as application of income for charitable or religious purpose.

Note- However where the total income of the resident manufacturing co-operative society include any income which doesn’t arise from manufacture or production, it shall be taxed @ 22%.

Rebate u/s 87A opting for New taxation scheme u/s 115BAC

Individual, HUF, AOP (other than co-operative society), BOI, Artificial judicial person.

Rebate u/s 87A

(i) WHERE the total Income of the person specified u/s 115BAC is Rs. 7,00,000 or less then the assesse shall be eligible for Rebate u/s 87A of 100% of the tax payable or Rs. 25,000 whichever is lower.

(Case 1)

(ii) Further , where the Total income exceed Rs. 7,00,000 then the person opting for new taxation regime shall be entitled to a rebate of the amount by which the income tax payable on such income exceed the difference between the total income in excess of Rs. 7,00,000. ( Case 2)

Upto Rs. 3 Lakh  :   0%

3 Lakh-6 Lakh  :   5%

6 Lakh-9 Lakh :   10%

9 Lakh-12 Lakh   :    15%

12 Lakh-15 lakh :    20%

Above 15 lakh  :    30%

Case 1-

Total Income-  6,94,000

 Tax payable   –   24,400

On above Income

 Rebate u/s 87A    –     (24,400)

 Tax payable   –   0

 Case 2-

Total Income-     7,17,000 

Tax payable   –      26,700

On Rs. 7,17,000 (A)

 Income in excess of  –  17,000

Rs. 7,00,000 (B)

 Rebate (A-B)    –    9,700

 Tax payable

Tax as per (A)-    26,700

 Rebate    –  9,700 

Tax payable-  17,000

Cess @ 4%   680 

Total Tax   17,680

An eligible assesse i.e. Individual, HUF and partnership firm who are resident except LLP engaged in eligible business except agency, commission, brokerage, profession , profit of such business under this scheme shall be deemed as – 

Profit – 8 % or higher of Turnover where Total Gross receipt/Turnover is received in Cash + Bank OR 6% or higher of Turnover/Total Gross receipt where gross receipt is through Bank only. 

Sec 44ADA

An eligible assesse i.e. Individual and partnership firm who are resident except LLP engaged in profession, then profit of such profession under this scheme shall be deemed as – 

Profit – 50 % or higher of the Total Gross receipts/Turnover

Sec 44ADA– Where the receipt or the aggregate of receipt in cash doesn’t exceed 5 % of the Total Receipt or Turnover, then the person can continue to apply the presumptive taxation scheme till the threshold turnover limit of Rs. 75 lakhs.

54F- Ex

Exemption shall be available to Individual & HUF in the case of LTCG arising from the transfer of any capital asset other than residential building is invested in the purchase of new Residential house within 1 year prior to the date of transfer or 2 years after the date of transfer or made construction within 3 years from the date of transfer.

Maximum Exemption u/s 54 & 54F will be available upto the limit of Rs. 10 crore where the cost of the New House exceed Rs. 10 crore. 

Further , where the amount deposited in Capital Gain account scheme on or before the due date of filing ITR for the purpose of utilizing in the purchase/ construction of Residential house within the stipulated period shall be taken upto Rs. 10 crore only.