Whalesbook
TCS Rate Reductions
The finance minister's budget proposals did not include the anticipated increase in exemption limits or a reorientation of tax slabs. Instead, calibrated adjustments were made to Tax Collected at Source (TCS) rates. The TCS rate on the sale of overseas tour programme packages has been slashed from the current 5% and 20% to a uniform 2% without any threshold.
Furthermore, TCS rates for education and medical remittances under the Liberalised Remittance Scheme (LRS) will also see a reduction from 5% to 2%. These measures are expected to provide some relief to individuals undertaking international travel and remittances for essential services.
ITR Filing Deadline Adjustments
For assessees with business or profession income whose accounts are not mandated for audit under the Income Tax Act or other laws, the due date for filing their income tax return has been extended. The deadline moves from July 31 to August 31. However, individuals filing ITR-1 and ITR-2 will maintain their July 31 deadline. This extension aims to offer more time for these specific business entities to complete their tax filings.
Revised Return and Updated Return Provisions
The time limit for filing a revised return, intended to correct omissions or wrong statements in original or belated returns, has been proposed for an increase. The window will now be 12 months from the end of the relevant tax year, up from the existing 9 months. Additionally, the budget outlines an increased penalty for filing an updated return after a notice has been issued under section 280. In such cases, an additional income-tax of 10% of the aggregate tax and interest payable will be levied.
Tax advocate Narayan Jain commented on the proposals, noting the focus on rationalizing various penalty and prosecution provisions alongside the rate adjustments.