Sector-specific customs duty proposals
Medicines and medical equipment
- Three cancer drugs – namely Trastuzumab Deruxtecan, Osimertinib and Durvalumab – are fully exempted from custom duty.
- Changes in Basic Customs Duty (BCD) on x-ray tubes & flat panel detectors for use in medical x-ray machines under the Phased Manufacturing Programme.
Mobile phone and related parts
- BCD on mobile phones, mobile printed circuit board assembly (PCBA) and mobile charger reduced to 15 per cent.
Precious metals
- Customs duties on gold and silver reduced to 6 per cent and that on platinum to 6.4 per cent.
Other metals
- BCD removed on ferro nickel and blister copper.
- BCD removed on ferrous scrap and nickel cathode.
- Concessional BCD of 2.5 per cent on copper scrap.
Electronics
- BCD removed, subject to conditions, on oxygen-free copper for manufacture of resistors.
Chemicals and petrochemicals
- BCD on ammonium nitrate increased from 7.5 to 10 per cent.
Plastics
- BCD on PVC flex banners increased from 10 to 25 per cent.
Telecommunication equipment
- BCD increased from 10 to 15 per cent on PCBA of specified telecom equipment.
Trade facilitation
- For promotion of domestic aviation and boat & ship MRO, time period for export of goods imported for repairs extended from six months to one year.
- Time-limit for re-import of goods for repairs under warranty extended from three to five years.
Critical Minerals
- 25critical minerals fully exempted from customs duties.
- BCD on two critical minerals reduced.
Solar energy
- Capital goods for use in manufacture of solar cells and panels exempted from customs duty.
Marine products
- BCD on certain broodstock, polychaete worms, shrimp and fish feed reduced to 5 per cent.
- Various inputs for manufacture of shrimp and fish feed are exempted from customs duty.
Leather and textile
- BCD reduced on real down filling material from duck or goose.
- BCD reduced, subject to conditions, on methylene diphenyl diisocyanate (MDI) for manufacture of spandex yarn from 7.5 to 5 per cent.
Direct Taxes
- Efforts to simplify taxes, improve taxpayer services, provide tax certainty and reduce litigation to be continued.
- Enhance revenues for funding development and welfare schemes of the government.
Simplification for charities and of TDS
- Two tax exemption regimes for charities to be merged into one.
- the 5 per cent TDS rate on many payments merged into the 2 per cent TDS rate.
- 20 per cent TDS rate on repurchase of units by mutual funds or UTI withdrawn.
- TDS rate on e-commerce operators reduced from one to 0.1 per cent.
- Delay for payment of TDS up to due date of filing statement decriminalized.
Simplification of reassessment
- Assessment can be reopened beyond three years up to five years from the end of Assessment Year only if the escaped income is ₹ 50 lakh or more.
- In search cases, the time limit is reduced from ten to six years before the year of search.
Simplification and rationalisation of capital gains
- Short-term gains on certain financial assets to attract a tax rate of 20 per cent.
- Long-term gains on all financial and non-financial assets to attract a tax rate of 12.5 per cent.
- Exemption limit of capital gains on certain financial assets increased to ₹ 1.25 lakh per year.
Tax Payer Services
- All remaining services of customs and income tax including rectification and order giving effect to appellate orders to be digitalized over the next two years.
Litigation and appeals
- ‘Vivad Se Vishwas Scheme, 2024’ for resolution of income tax disputes pending in appeal.
- Monetary limits for filing direct taxes, excise and service tax related appeals in Tax Tribunals, High Courts and Supreme Court increased to ₹60 lakh, ₹2 crore and ₹5 crore, respectively.
- Safe harbour rules expanded to reduce litigation and provide certainty in international taxation.
Employment and investment
- Angel tax for all classes of investors abolished to bolster start-up ecosystem,.
- Simpler tax regime for foreign shipping companies operating domestic cruises to promote cruise tourism in India.
- Safe harbour rates for foreign mining companies selling raw diamonds in the country.
- Corporate tax rate on foreign companies is reduced from 40 to 35 per cent.
Deepening tax base
- Security Transactions Tax on futures and options of securities increased to 0.02 per cent and 0.1 per cent, respectively.
- Income received on buy-back of shares in the hands of the recipient to be taxed.
Social security benefits.
- Deduction of expenditure by employers towards NPS to be increased from 10 to 14 per cent of the employee’s salary.
- Non-reporting of small movable foreign assets up to ₹20 lakh de-penalised.
Other major proposal in Finance Bill
- Equalization levy of 2 per cent withdrawn.
Changes in Personal Income Tax under new tax regime
- Standard deduction for salaried employees increased from ₹50,000 to ₹75,000.
- Deduction on family pension for pensioners enhanced from ₹15,000/- to ₹25,000/-
- Revised tax rate structure:
| 0-3 lakh rupees | Nil |
| 3-7 lakh rupees | 5 per cent |
| 7-10 lakh rupees | 10 per cent |
| 10-12 lakh rupees | 15 per cent |
| 12-15 lakh rupees | 20 per cent |
| Above 15 lakh rupees | 30 per cent |
- Salaried employee in the new tax regime stands to save up to ₹ 17,500/- in income tax.
