NEWSLETTER
INCOME TAX
AMENDMENTS
UNDER THE
FINANCE ACT, 2023
CA. HARIHARAN L
Introduction paid exceeds Rs 5 lacs in a given year. The above amendment also specifies
The Union Finance Minister presents the The proceeds received in the event of the that interest on delayed payments is
annual budget in the month of February death of the assessee continues to remain disallowed, in addition to the actual amount
or March every year. One of the key exempt from tax. of expenditure.
components of the budget is with regard to 3. Exemption u/s 10AA
the provisions of the Income Tax Act 1961 The profits and gains from business / In order to ensure compliance of this
and the Rules made thereunder. profession of entities established in Special provision, it is imperative that the assessees
This document aims to highlight the key Economic Zones is exempt fully in the first should identify the vendors which will
amendments brought in by the Finance Act, five years. The exemption is available to the come within the purview of the definition of
2023 and the key areas to be monitored extent of 50% in the next five years, which MSME and make suitable changes to their
while filing the Income Tax Returns for the can be extended for another five years if accounting package, so that MSME vendors
year. the amount is debited from the Profit & can be identified separately.
Key amendments Loss Account.
To avail the above exemption, the assessee 5. TDS provisions every deductor is
1. The new regime of taxation is should file its Income Tax Return u/s 139(1) required to file the TDS returns within
the default one within the due date as specified. Further, the time limits specified. TDS returns shall
Till Assessment Year 2023-24, the income the proceeds from the sale of goods / be filed within 30 days from the end of the
tax return was filed with old regime as the services should be received in convertible quarter (60 days for 4th quarter), and TCS
default one. If the assessee has income foreign exchange within six months from returns within 15 days from the end of the
from business / profession and wishes to the end of the financial year. quarter (45 days for the 4th quarter). After
opt for the new regime, he should file form filing, form 16A shall be generated for non-
115BAC before the due date of filing the 4. Payments covered u/s 43B salary deductees on quarterly basis within
Income Tax Return. Section 43B deals with certain expenditures 15 days from the date of TDS furnishing.
With effect from AY 2024-25, the new for which deduction is allowed only on There is a penalty of Rs 100 per day per
regime of taxation is the default option at actual payment basis. In order to promote certificate not furnished within the above
the time of filing the Income Tax Return. timely payments to Micro, Small and deadline u/s 272A and a late fee of Rs 200
If the assessee has income from business Medium Enterprises (MSME), it is now u/s 234E per day for delay in filing the TDS/
/ profession, and wishes to opt for the old provided that the deduction for sums TCS returns.
regime and claim deductions, he should file payable to MSME shall be covered u/s 43B
form 10IEA from AY 2024-25. Conclusion
2. Receipts from insurance The above provisions are only a few key
policies As per the MSMED Act, all the payments to highlights forming part of the Finance
Section 10(10D) specifies that the proceeds be made to MSME’s shall be made within Act, 2023. While performing Income Tax
from maturity of insurance policies issued 45 days from the date of expenditure / Return filing as well as tax audit reporting,
on or after 01.04.2023 shall be classified as invoicing. Further, any delay in payments Chartered Accountants and students may
Income from Other Sources if the premium beyond 45 days attracts interest on delayed give emphasis to these provisions.
payments.
10 March 2024 KOTTAYAM BRANCH (SIRC)
