Top 15 Income tax Amendments applicable from 1st April 2023

1. Change in new Tax Regime

Section 115BAC applicable Now applicable also on association of persons [other than a co- operative society], or body of individuals, whether incorporated or not, or an artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2.
Standard Deduction Rs 50000 , Family pension and Agniveer corpus Fund is now allowable for Computation of income under New Tax regime
Slab Rate for new tax regime;

Total Income (Rs)	Rate
Up to 3,00,000	Nil
From 3,00,001 to 6,00,000	5%
From 6,00,001 to 9,00,000	10%
From 9,00,001 to 12,00,000	15%
From 12,00,001 to 15,00,000	20%
Above 15,00,000	30%

2. Tax Rebate limit raised to Rs 7 lakhs

Amount of Rebate under section 87A increase to Rs 7 lakhs for new Tax regime

3. New income tax regime to be default regime

On portal new tax regime will be default tax regime,

Important for Company : If employee did not opt any option then as default deduct TDS as per new tax regime only

However The intimation made by employee to the employer would not amount to exercising the final option .The employee shall be required to do so separately on, before or along with filing the income-tax return under section 139(1).

4. Conversion of Gold to Electronic Gold Receipt and vice versa

No Capital gain tax transfer of a capital asset, being physical gold to the Electronic Gold Receipt issued by a Vault Manager or such Electronic Gold Receipt to physical gold

5. Deemed Gift

Now if NR Received money exceeding INR 50,000 received without consideration by a person resident in India is deemed to be income accruing or arising in India.

6. Life insurance Policies

Now, it is proposed to tax income received from life insurance policies issued on or after 1 April 2023 if the aggregate annual premium exceeds INR 5 lakh, except if received on death of the assured.

7. Leave encashment

The exemption limit for leave encashment received on retirement by non-government salaried employees increased to INR 25 lakh from the current INR 3 lakh.

8. Capital gains deduction on residential property

The maximum deduction that can be claimed by the assessee under section 54 and 54F to rupees ten crore in place of all available long-term gain.

9. Interest on housing Loan not treated As cost of improvement

Interest on housing loan claimed as deduction while computing taxable income shall not be included in cost of acquisition/improvement for purposes of capital gains.

10. TDS on payment of interest on listed debentures to a resident

Section 193 of the Act provides for TDS on payment of any income to a resident by way of interest on securities

11. Foreign remittances for overseas tour packages

TCS increased from 5% to 20% for purchase of overseas tour programmes without any threshold.

12. Taxation of capital gains in case of market-linked debentures

Long-term capital gains arising from market-linked debentures are currently taxed at a concessional rate of 10%. It is proposed to tax such gains as short-term capital gains at normal rates.

13. Promoting timely payments to Micro and Small Enterprises

As per new clause (h) of section 43B of the Act any sum payable by the assessee to a micro or small enterprise beyond the time limit specified in section 15 of the Micro, Small and Medium Enterprises Development (MSMED) Act 2006 shall be allowed as deduction only on actual payment.

However, It can be allowed on accrual basis only if the payment is within the time mandated under section 15 of the MSMED Act.

14. Reducing the time provided for furnishing TP report

The time period for furnishing the TP report reduced from 30 days to 10 days from receipt of notice, The taxpayer may seek an extension from the tax authorities for additional 30 days.

15. Bringing the non-resident investors within the ambit of section 56(2)(viib) to eliminate the possibility of tax avoidance

Now the consideration received either from a non- resident or resident is under the ambit of Section 56 (2) (viib)

So where a company, not being a company in which the public are substantially interested, receives, in any previous year, from any person (a resident or a Non -resident), any consideration for issue of shares that exceeds the face value of such shares, the aggregate consideration received for such shares as exceeds the fair market value of the shares shall be chargeable to income-tax under the head ‘Income from other sources’. Rule 11UA of the Income-tax Rules provides the formula for computation of the fair market value of unquoted equity shares for the purposes of Section 56(2) (viib) of the Act.

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Disclaimer: The views expressed in this article are the personal views of the author. Neither the views nor the analysis constitute a legal opinion and are not intended to be advice