The Finance Bill, 2024 was passed by the Lok Sabha today with over 45 amendments, amidst opposition members’ sloganeering for the establishment of a Joint Parliamentary Committee on the Adani-Hindenburg issue.
Several amendments were made to the Finance Bill, which contains proposals regarding taxation and government spending. In addition, twenty new sections were added to the Bill. It authorises the central government’s financial proposals for the fiscal year 2024-24 to be taken into account.
This comes one day after the grant request was approved by the legislature. Thursday, the Lok Sabha approved grant requests authorising expenditures of approximately Rs 45 lakh crore for 2024-24. The proposal was approved by voice vote despite opposition members’ protests over their demand for a JPC investigation into the Adani matter.
The repeated stalemate has resulted in adjournments in both houses of parliament. While the BJP has demanded an apology from Congress leader Rahul Gandhi for his remarks in the United Kingdom, the opposition has demanded an investigation into the Hindenburg-Adani dispute by a Joint Parliamentary Committee.
Several opposition members demanded a JPC investigation into the allegations against the power-to-port conglomerate, after a US short-seller accused the group companies of stock manipulation, a charge denied by the Adani group, while the House was considering the bill. The proceedings were postponed until March 27 as sloganeering continued.
Highlights of the Finance Bill
While introducing the Finance Bill 2024 for consideration and passage in the Lok Sabha, the minister stated that the RBI will investigate credit card payments for foreign travel that are not covered by the Liberalised Remittance Scheme (LRS).
Sitharaman stated that there have been suggestions that the national pension system for government employees needs improvement.
The minister added that it has come to his attention that credit card payments for foreign travel are not captured by LRS, thereby evading tax collection at source. RBI has been asked to investigate this matter with the intention of incorporating credit card payments for foreign travel into the LRS and tax collection at the source.
The securities transaction tax (STT) on the sale of options has been increased from 1,700 to 2,100 on a turnover of 1 crore, a 23.5% increase, while the STT on the sale of futures contracts has been increased from 10,000 to 12,500 on a turnover of 1 crore, a 25% increase.
Enhanced tax benefits for offshore banking units operating in GIFT city; for ten years, offshore banking units will receive a 100 percent income deduction.
Despite claims, the taxation of REITs and InviTs will not change (income from REITs will be taxed as “income from other sources” and not as capital gains).
No change is made to the 7L limit. It is proposed to provide only minimal assistance. Currently, a taxpayer with a 7 million-dollar income pays no tax, but a taxpayer with a 7 million-dollar income pays $25,010. Currently, there is TCS on LRS remitted outside of India. Consequently, there is no TCS when a resident sends money to Gift City. To achieve treatment parity, it is proposed that TCS shall apply to all LRS, even if they are located within India.
The long-term tax benefit for debt mutual funds that invest less than 35% of their assets in equities has been eliminated. These mutual funds are subject to the short-term capital gains tax.
The tax rate on royalties and technical fees earned by non-resident (non-domiciled) companies increased from 10% to 20%.
There is no change to the taxation of non-par savings insurance products (the 5 lakh limit remains unchanged).
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