Highlights of tax proposals in Budget 2024-25 presented by the Finance Minister, Mrs. Nirmala Sitharaman, in Parliament on February 1.

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:

• Salaried employee in the new tax regime stands to save up to ₹ 17,500/- in income tax.