changes in direct and indirect tax in union budget 2023-24

1. Budget 2023 Changes in
DirectTax
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2. 2
Change in new tax regime slabs for FY 2023-24 (AY 2024-25)
Individual & HUF:
Income range Income tax rate
Up to Rs. 3,00,000 Nil
Rs. 300,001 to Rs. 6,00,000 5%
Rs. 6,00,001 to Rs. 900,000 10%
Rs. 9,00,001 to Rs. 12,00,000 15%
Rs. 12,00,001 to Rs. 1500,000 20%
Above Rs. 15,00,001 30%
 The new tax regime is now the default tax regime. However, taxpayers
have an option to choose the old tax regime also.

3. 3
Rate of surcharge in NewTax Regime Section 115BAC
Earlier Proivision
Income range Rate of Surcharge
Upto 50 Lakhs Nil
>50 Lakhs - 1 crores 10%
>1 crores - 2 crores 15%
>2 crores - 5 crores 25%
More than 5 crores 37%
Updated Proivision
Income range Rate of Surcharge
Upto 50 Lakhs Nil
>50 Lakhs - 1 crores 10%
>1 crores - 2 crores 15%
>2 crores - 5 crores 25%
More than 5 crores 25%
 Conclusion: The highest surcharge under the new tax regime has been
reduced to 25% from 37% for people earning more than Rs 5 crore. This move
brings down their tax rate from 42.74%

4. 4
Rebate u/s 87A under NewTax Regime for FY 2023-24 (AY
2024-25)
Particulars Proposed Changes
Maximum limit for claiming rebate Rs. 7,00,000
Tax Savings Rs. 25,000

5. 5
Deduction in
115BAC
Standard
Deduction of
Rs 50000
Family
Pension u/s
57 (iia) upto
Rs. 15000
Amount
Deposited in
the Agniveer
CorpusFund
u/s 80CCH(2)
of the act
►Additional Deduction

6. 6
Timely Payments to MSME – Section 43 B
The MSME Act provides that if:
 Written Agreement with MSME Payment to be made within time as per
agreement or 45 days whichever is earlier.
 No Written Agreement with MSME Payment to be made within 15 Days.
 No benefit of proviso i.e. even if the payment is made before the due date of
filling of return but after the end of financial year then no deduction shall be
allowed.
 Deduction of expensesto be allowed only on payment basis.

7. 7
Increasing threshold limits for PresumptiveTaxation F.Y.
2023-24
 Cheque not being account payee – deemedto be cash.
Particulars Existing Proposed in addition to existing
44AD
If turnover or gross receipts are
Rs. 2 Cr. Or less
If Cash receipts does not exceed 5%
turnover or gross receipts are Rs. 3 Cr.
Or less
Deemed profits @8% or @6% or
higher
Deemed profits @8% or @6% or higher
44ADA
If Gross receipts are Rs. 50
Lakhs Or less
If Cash receipts does not exceed 5% If
Gross receipts are Rs. 75 Lakhs Or less
Deemed profits @50% or higher Deemed profits @50% or higher

8. Other DirectTax Updates
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 Leave Encashment: The exemption threshold for Leave encashment has been increased
to Rs. 25 lakh from Rs. 3 lakh for a maximum period of 10 months for non-government
employees is tax-free under Section 10(10AA).
 TDS rate has been reduced to 20% from 30% on taxable withdrawal of EPF.
 Payment Based Deduction: Any payment made to MSME shall be allowed as expenditure
only when payment is actually made. This move brings ‘payments to MSME’ under the
purview of Section 43B.
 The capital gains tax exemption under Section 54 to 54F is restricted to Rs. 10 crores.
Earlier, there was no threshold.

9. Other DirectTax
Updates
9
 For Life Insurance Policy taken from 01st April 2023 where the
aggregate amount of premium paid exceeds Rs.5,00,000 for a
financial year, then the amount received at the time of maturity
of policy would be taxable in the hands of the receiver. (Except
in case of death of the policyholder).
 Withdrawal of exemption on TDS on Interest payments on
listed Debentures. TDS will be now deducted at rate of 10%.
 Capital Gains arising from Market Linked Debentures are

10. Co-operative
Societies:
10
Some of the proposals announced for co-operative Societies are:
 The government has extended the benefit of concessional tax rate of 15% to new co-
operatives that commence manufacturing by 31st March, 2024.
 Section 194N: TDS limit on cash withdrawals is increased to Rs. 3 crores for co-
operatives societies.

11. Budget 2023 Highlights: GST
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12. GST Changes
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 Section 10 stands amended such that a taxpayer can opt into the composition scheme
even if they are supplying goods through e-commerce operators where TCS is collected
under Section 52.
 Section 16 is amended for a condition that in cases where a recipient taxpayer fails to
pay to their supplier invoice value including the GST within 180 days from the date of
issue of invoice, then they must pay with interest computed under Section 50 on it.
 Sections 37, 39, 44, and 52 are amended to restrict taxpayers from filing GSTR-1 (return
for outward supplies), GSTR-3B (summary returns), GSTR-9 (annual returns), and
GSTR-8 (e-commerce operator) for a tax period after the expiry of three years from the
due date.

13. GST Changes
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 Penalty of Rs.10,000 or an amount equivalent to the amount of tax involved, whichever
is higher will be charged for e-commerce operators who-
• Allow an unregistered person to supply goods or services or both through them except
where such person is exempted from GST registration.
• Allow any registered person from making inter-state supply of goods/services through
them where they are ineligible for it.
• Do not furnish accurate details in the GSTR-8 of any sale of goods made through them
by a person exempted from obtaining GST registration.

14. GST Changes
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 Input Tax Credit (ITC) shall not be available in respect of goods or services or both
received by a taxable person which are used or intended to be used for activities
relating to his obligation under Corporate Social Responsibility (CSR) referred to under
Section 135 of Companies Act, 2013.
 A new section 158A has been inserted in the CGST Act to allow businesses to now share
GST data digitally with consent. It include-
• Returns filed under GSTR-1/3B/9, or
• Application of registration, or
• Statement of outward supplies, or
• Generation of an e-invoice or e-way bill, or
• Any other details, as may be prescribed.

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THANKS!
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