The central government has finally passed the Finance Bill 2023 on March 24, 2023, after continuous delays. The bill was tabled on the floor of the lower house by Union Finance Minister Nirmala Sitharaman, as opposition MPs continued to raise slogans calling for a JPC inquiry into the Adani Group issue.
A committee will be set up under the Finance Secretary on the pension system to address the needs of employees and also maintain fiscal prudence, said FM Nirmala Sitharaman while proposing the Finance Bill 2023.
Apart from this, the minister also said the RBI will look into the issues related to credit card payments for foreign tours not being captured under the Liberalised Remittances Scheme (LRS).
Other amendments made in the Finance Bill 2023 are mentioned below:
1) Mutual funds with less than 35% of their AUM in domestic equity must lose the indexation benefit and be taxed as short-term capital gains.
2) Enhanced tax benefits to offshore banking units operating in GIFT City, allowing offshore banking units to get a 100% deduction on their income for 10 years.
3) The tax on royalties or technical fees earned by foreign (non-resident) companies was hiked from 10% to 20%.
4) No change in tax on non-par savings insurance products (Rs. 5 lakh cap remains).
5) No change in taxation for REITS and INVITs despite representation (income from REITS to be taxed as ‘income from other sources’ and not as capital gains).
As per amendments to the Finance Bill 2023, STT on the sale of options has been hiked to Rs 2,100 on a turnover of Rs 1 crore, against an earlier levy of Rs 1,700. This indicates a 23.5 percent hike.
Startups have failed to get any significant respite from the proposed change in the angel tax regime, expected to hamper foreign funding for young companies, announced in the Budget last month.
As per the list of amendments to the Finance Bill, which was passed in the Lok Sabha on March 24, the proposed changes will come into effect for Assessment Year 2024–25 or Financial Year 2023–2024.
Shreya Bansal is a student of Journalism. She is an enthusiastic creative and content writer. Shreya is currently working at The Shining Media as a journalist and can be contacted at shreyabansal@theshiningmedia.in
