Interim Budget 2024 Highlights

The Budget presented by Honourable FM Smt. Nirmala Sitaraman on 1st February 2024 was an Interim Budget or a Vote on Account Budget. Hence, there were no significant policy changes or announcements. Full Budget will be presented after the new government is formed.

Few highlights related to Direct and Indirect Taxes announced in the Interim Budget are as follows:

Proposed Direct Tax Amendments: 

• There is no change in Income Tax rates for FY 2024-25.
• Outstanding direct tax demand for old pending cases has been withdrawn as follows: 

1. Up to Rs. 25,000 pertaining up to FY 2009-10 
2. Up to Rs. 10,000 for cases pertaining up to FY 2014-15.

–  Following have been extended from 31st March 2024 to 31st March 2025.

1. Deduction u/s 80-IAC for Start-ups and investments made by sovereign wealth funds/pension funds.
2. U/s 80LA for a Non-Resident having income as royalty or interest on account of leasing of an aircraft or a ship in a previous year to a unit of an International Financial Services Centre 
3. Faceless Scheme for Transfer Pricing Officer u/s 92CA
4. Faceless Scheme for Dispute Resolution Panel u/s 144C
5. Faceless Scheme for Income Tax Appellate Tribunal u/s 253
6. Procedure of Appellate Tribunal u/s 255

Proposed Indirect Tax Amendments

• Distribution ITC of GST liability paid under Reverse Charge Mechanism: Invoices on which liability is to be paid under reverse charge mechanism can also be distributed which was not allowed earlier.
• ISD Registration made Mandatory for common ITC distribution: – Taxpayers having multi state GST registrations and who has not taken ISD registration for common ITC distribution, will have to mandatorily initiate the process of ISD registration under clause (viii) of section 24 of CGST Act 2017 and shall distribute the ITC. 
• Additional penalty for failure to register machines used in manufacture of specified goods:

Any person who is engaged in manufacture of goods in respect of which special procedure relating to registration of machines under section 148, act in contravention of the said special procedure, they shall be liable to penalty of Rs. 1 lakh for every machine not registered in addition to penalty already imposed under chapter XV. The specified goods are tobacco, pan masala and other similar goods.

In addition, every machine which is not registered shall be liable for seizure and confiscation.

Machine shall not be confiscated if 

• the penalty imposed is paid and
• the registration of such machine is made in accordance with the special procedure within three days of the receipt of communication of the order of penalty

We can expect more amendments when the Final Budget is presented by the government.

CA Abhishek D Mundhra Chartered Accountant

Abhishek D Mundhra is a Chartered Accountant with 12+ years of post-qualification experience with expertise in the field of GST and other Direct and Indirect Taxes.

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