New Delhi, July 23 (UNI) The Government on Tuesday proposed a comprehensive review of the Income Tax Act aiming to simplify and rationalize taxation norms and potentially provide further relief to taxpayers, enhancing their disposable income.
While presenting the budget for 2024-25, Union Finance Minister Ms Nirmala Sitharaman said it is proposed to introduce a new scheme of block assessment for search cases. The block period is proposed to be six previous years and the period up to the date of conclusion of search. Total income of the block period is proposed to be taxed at the rate of 60 percent.
She further added proposed reducing the time-limit for which reassessment can be done and rationalisation of the provisions. She said that time limit for reassessment is proposed to be reduced from ten years to five years. Further, there are proposals to rationalise the procedure for reassessment.
It is also proposed to omit reference to Principal Chief Commissioner or Chief Commissioner in section 275 to provide clarity of time limitation for imposition of penalties. It is also proposed to withhold refund up to sixty days of assessment under section 245 and to rationalise time limit to file appeal to ITAT under section 253.
With regard to simplification of taxation of Capital Gains, the Minister said the taxation of capital gains is proposed to be rationalised and simplified.
Short term gains on specified financial assets shall henceforth attract a tax rate of 20 percent instead of 15 percent, while that on all other financial assets and non-financial assets shall continue to attract the applicable tax rate.
Long term gains on all financial and non-financial assets, on the other hand, will attract a tax rate of 12.5 percent. For the benefit of the lower and middle-income classes, it is proposed to increase the limit of exemption of capital gains on certain listed financial assets from Rs 1 lakh to Rs 1.25 lakh per year.
