Understanding Tax Changes in India in effect from 1 April

Published : 9 April 2024
Updated : 24 May 2024
Understanding Tax Changes in India in effect from 1 April

Knowing the latest updates and amendments to the regulations is crucial, especially for business executives, especially as we begin a new fiscal year. The main updates that you should be aware of are outlined in the following.

Income Tax Regime:

1. The Finance Act 2024 maintained the income tax structure from the Union Budget 2023-24 for Fiscal Year 2024-25, with no modifications to the direct tax regime.

2. A new tax system, 115BAC (1A), will be implemented in fiscal year 2023-24, offering lower tax rates but abolishing most exemptions and deductions save for standard deductions.

Indirect Taxation Changes:

1. The Finance Act 2024 amendments include revisions to the 2017 Central Goods and Services Tax Act.

2. Input Service Distributors (ISD) are now required to distribute input tax credits (ITC) under particular circumstances, encouraging consistency and efficiency in credit allocation.

3. The inclusion of Reverse Charge system (RCM) invoices in the ISD system guarantees that taxpayers comply consistently.

4. Penalties have been introduced for the failure to register certain machines used in manufacturing specified goods under special procedures.

Summary of Finance Act 2024:

1. The Finance Act 2024 aims to simplify tax laws, maintain income tax rates, and provide specific assistance to taxpayers.

2. Amendments include changes to the CGST Act, 2017, and introduction of penalties for non-compliance with specified procedures.

Crucial Dates and Deadlines:

The option of opting out of the new tax system is open until the filing of the return for AY 2024-25. - Penalties for failure to register specified machines used in manufacturing apply, with the risk of seizure and confiscation.

Conclusion:

Staying up to date on tax legislation is critical for organizations seeking to assure compliance and maximize financial strategies. My Mudra continually believes that our customers should receive the necessary details regarding finance so that they may make the best option for themselves.