New Delhi: The Finance Ministry will begin its pre-budget meetings from October 10 which will continue till November 11, in which six ministries and departments, including new and renewable energy and skill development and entrepreneurship, will be reviewed.
Before the Budget session begins, several important changes will come into effect from October 1. These changes were introduced by Union Finance Minister Nirmala Sitharaman. union budget 2024Some of which are already effective. These changes include Base Card, STT, tds rateDirect Tax Vivad Se Vishwas Scheme 2024.
Aadhaar will no longer be applicable for PAN and ITR
Union Budget 2024 proposes to stop quoting Aadhaar Enrollment ID instead of Aadhaar number to prevent misuse and duplication. Use of Aadhaar in ITR and PAN applications will no longer be applicable. From 1st October.
According to the Economic Times, the budget memorandum said, “The above provisions allowing quoting of Aadhaar enrollment ID in the application form for allotment of PAN or in the return of income were introduced in 2017. Since then, as per the data available in the public domain, the coverage of Aadhaar number has been increasing and has covered most of the population of India.” He said that it is necessary to close the option of quoting the enrollment ID of the Aadhaar application form, Because any allotment of PAN against enrollment ID may lead to duplication and misuse of PAN.
Securities transaction tax applicable on futures and options trading will also be increased from October 1, with an increase of 0.02 per cent and 0.1 per cent respectively. Notably, STT will be levied on both purchase and sale of various securities including equity shares, futures and options. Income from share buyback will also be taxable under the beneficiaries. This reform aims to keep pace with ever-increasing market activity while ensuring that transaction values are appropriately reflected by tax levels.
floating rate bond tds
As per the Budget 2024 reforms, tax deducted at source (TDS) will be deducted at the rate of 10 per cent from specified central and state government bonds, including floating rate bonds. It will be deducted after the Rs 10,000 limit, which means no TDS will be applicable if the annual earnings are less than Rs 10,000.
The Budget also proposes to amend Section 193 of the Income Tax Act, 1961 to impose TDS on Floating Rate Savings Bonds, 2020 (Taxable).
tds rates
In the Finance Bill, the TDS rate under sections 19DA, 194H, 194-IB, 194M, 194F, 194-O and 194G has been reduced from 5 percent to 2 percent.
TDS rate for e-commerce operators was reduced from 1 percent to 0.1 percent.
Section 194DA – Payment in respect of life insurance policy
Section 194G – Commission on sale of lottery tickets
Section 194H – Payment of commission or brokerage
Section 194-IB – Payment of rent by certain persons or HUF
Section 194M – Payment of certain sums by certain persons or HUF
Section 194F – Payment in case of repurchase of units by a mutual fund or UTI is proposed to be removed from 1 October 2024.
Section 194-O – Payment of certain amount by e-commerce operator to e-commerce participants
Direct Tax Vivad Se Vishwas Scheme 2024
Direct Tax Vivad Se Vishwas Scheme, 2024 (DTVSV, 2024) has been announced by the Central Board of Direct Taxes (CBDT) to settle pending appeals in income tax disputes. It provides for a lower settlement amount for the ‘new Appellant’ as compared to the ‘old Appellant’. Additionally, it also includes a provision for a lower settlement amount for taxpayers making declarations before December 31, 2024, compared to those declaring after that.
repurchase of shares
From October 1, like dividends, buybacks of shares will be subject to shareholder-level taxes, resulting in a higher tax burden for investors. Additionally, the shareholder’s acquisition cost of these shares will be considered while calculating any capital gains or losses.
The budget meetings held will be aimed at finalizing the revised estimates for the current financial year and discussing the budgetary allocation for 2025-26. On the last day, there will be discussion on Railway Ministry and Health and Family Welfare Department.
The Union Budget 2025-26 is expected to focus on reforms to help accelerate growth by boosting job creation and economic demand.
“Pre-Budget meetings chaired by Secretary (Expenditure) will commence in the second week of October 2024. The Financial Advisor will ensure that the necessary details…are properly entered into UBIS (Union Budget Information System) before/latest by 7th October. Go.” 2024,” said the Budget Circular 2025-26 issued by the Department of Economic Affairs.
During the pre-budget meetings, the receipts of the Ministries/Departments and the expenditure estimates on net basis as well as the requirement of funds for all categories of expenditure are to be discussed.
The Budget 2025-26 is likely to be presented on February 1 during the first part of the budget session of Parliament which usually begins in the last week of January every year.
