Latest news with #IncomeTaxBill2025
Time of India
9 hours ago
- Business
- Time of India
Net direct tax collections dip 1.39% to Rs 4.59 lakh crore despite 5% rise in gross mop-up; refunds surge 58%
India's net direct tax collections for the ongoing financial year 2025-26 declined by 1.39 per cent to Rs 4.59 lakh crore as of June 19, mainly due to a sharp surge in refund issuances, according to government data released on Saturday. Tired of too many ads? go ad free now In the same period last year, net direct tax collections had stood at Rs 4.65 lakh crore, according to news agency PTI. Gross direct tax collections, however, rose by 4.86 per cent to Rs 5.45 lakh crore, up from Rs 5.19 lakh crore collected during the corresponding period in FY24. The fall in net collections is attributed to a 58 per cent increase in refunds, which touched Rs 86,385 crore so far this fiscal, indicating improved processing and faster taxpayer services. Advance tax collections between April 1 and June 19, 2025, showed a modest growth of 3.87 per cent at Rs 1.56 lakh crore, a significant slowdown from the 27 per cent year-on-year growth recorded in the same period last year. Corporate advance tax collections rose 5.86 per cent to Rs 1.22 lakh crore, while non-corporate advance tax collections fell 2.68 per cent to Rs 33,928 crore. Corporate tax collections overall fell by over 5 per cent to Rs 1.73 lakh crore, while non-corporate tax collections, largely personal income tax, saw a marginal rise of 0.7 per cent to Rs 2.73 lakh crore. Securities Transaction Tax (STT) collections also grew by 12 per cent, reaching Rs 13,013 crore during this period. Meanwhile, the Income Tax Department has introduced the 'e-Pay Tax' feature on its official portal to simplify the tax payment process, according to news agency ANI. The broader tax reform agenda is also advancing, with the Income Tax Bill 2025 currently under review by a Select Committee. Finance minister Nirmala Sitharaman had earlier announced that the new Bill, which aims to replace the existing Income Tax Act of 1961 with a more concise, litigation-free law, will be taken up in the monsoon session of Parliament. Tired of too many ads? go ad free now The proposed structure also ensures zero tax liability for individuals earning up to Rs 12 lakh annually due to a raised rebate of Rs 60,000, as stated by the finance minister in her Budget speech. The government has invited stakeholder suggestions on the draft Bill to fine-tune the reforms.
Time of India
21-04-2025
- Business
- Time of India
New Tax Bill 2025: No Nil TDS certificate for all taxpayers including NRIs; What does it mean for Indians and NRIs?
It seems that due to deletion of two words – 'no deduction' in the proposed new Income Tax Bill 2025 will result in removal of the concept of 'nil TDS' certificate for both Indian taxpayers and non-residents including NRIs. To understand how big of an impact this removal is, you need to understand when does a taxpayer need a nil TDS certificate? A nil TDS certificate needs to be applied online by a taxpayer when he/she expects to get an income, however no income tax is required to be paid. Income Tax Guide Income Tax Slabs FY 2025-26 Income Tax Calculator 2025 New Income Tax Bill 2025 So, it's like if your actual income tax liability from any income is 0 but Rs 1 lakh TDS is being deducted, then in this situation you can apply for this nil TDS certificate and if it's granted then zero TDS will be deducted. Similarly in case of tax liability being less than the TDS amount you can apply for lower TDS deduction request. This is the change which the new tax bill 2025 brings. If the current provision of this proposed bill is implemented as it is, you won't be able to get a nil TDS certificate. But you can still get a lower TDS certificate . So, this means you need to file an income tax return (ITR) even if you are an NRI , to claim back the TDS so deducted and if it's more than your tax liability then get a tax refund. Earlier with the nil TDS certificate you could have avoided all of these processes. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Villas For Sale in Dubai Might Surprise You Villas In Dubai | Search Ads View Deals Undo Read below to know more about this change and how you can still manage this situation. What did the new tax bill 2025 propose? The clause 395 of the new income tax bill 2025 said: Live Events Where tax is required to be deducted on any income or sum under this Chapter, then subject to the rules made under this Act,— (a) the payee may make an application before the Assessing Officer for deduction of tax at a lower rate; and (b) the Assessing Officer on being satisfied that the total income of the payee justifies a lower deduction, shall issue a certificate as appropriate; and (c) when a certificate is issued under clause (b), the person responsible for paying the income or amount shall deduct the tax at the rate specified in such certificate till its validity. Section 197 of the Income Tax Act, 1961 said: Subject to rules made under sub-section (2A), where, in the case of any income of any person or sum payable to any person, income-tax is required to be deducted at the time of credit or, as the case may be, at the time of payment at the rates in force the Assessing Officer is satisfied that the total income of the recipient justifies the deduction of income-tax at any lower rates or no deduction of income-tax, as the case may be, the Assessing Officer shall, on an application made by the assessee in this behalf, give to him such certificate as may be appropriate. What does this new change made in the new tax bill 2025 means for NRIs and Indians According to Prashant Khatore, Tax Partner, EY India, this means under the new Income Tax Bill, 2025, both Indians and NRIs can only get a lower TDS certificate and not a nil TDS certificate. 'It may be noted that clause 395 of the proposed Income Tax Bill, 2025 provides for a lower TDS certificate that can be obtained by the payee in case of any payments. The application under clause 395 is not limited to specified sections as it is there in existing section 197 of the Income Tax Act, 1961. Further, the current language of the proposed bill does not provide for a nil TDS. This means that under the new bill, payee may not be able to obtain a certificate of zero withholding by the payer,' says Khatore. Chartered Account Suresh Surna agrees with Khatore and adds: 'The new income tax bill, 2025 proposes a crucial shift which provides that only lower TDS rate certificates will be permitted under the new Section 395, effectively removing the option for obtaining a NIL tax deduction certificate, regardless of the taxpayer's income profile.' Prashant Khatore, Tax Partner, EY India What is the impact of this new change proposed in the income tax bill, 2025 for NRIs and Indians? We have asked various experts about the possible impact of this proposed change in language of the new income tax bill, 2025 for NRIs and Indians. Here's what they said: Though changes in TDS law bring uniformity but it also introduces a more restrictive tax framework According to Surana, 'The shift from Section 197 of the Income-tax Act, 1961, to clause 395 of the Income-tax Bill, 2025, introduces a more uniform but also more restrictive framework for tax deduction at source (TDS).' Get lower TDS certificate for all payments instead of specified payments earlier Experts say that earlier in the Income Tax Act, 1961, lower TDS certificate was limited to specified payments, now under the new tax bill, 2025 no such restrictions apply. Khatore from EY India says: 'Under the new tax bill, 2025 as the application of lower TDS is not limited to certain specified payments, the new bill enhances the scope of obtaining a lower TDS withholding certificate. Now if there is a justification for lower TDS, then the facility is extended to all payments.' Surana agrees with Khatore and adds that due to this proposed change to include all payments being eligible for lower TDS certificate, it has broadened the scope of the lower deduction of TDS. 'On the other hand, the new income tax bill, 2025 broadens the scope of who can apply for lower TDS certificates to include all types of income, including those previously excluded (e.g., benefits under Section 194R or foreign interest under Section 194LC), now qualify for applying for lower TDS certificates. This reduces uncertainty and promotes greater consistency in TDS administration across different income categories,' says Surana. Ankit Namdeo, Managing Partner, ANK Advisors agrees with Surana and Khatore and adds: 'The proposed expansion of nil/ lower withholding tax certificate to include all payments, from the extent scope of ' specified receipts' would enable a solution oriented approach for various types of transactions and capital receipts such as liquidated damages etc.' No relief from TDS through nil certificates means blocking of money According to Khatore, 'This proposed change may lead to higher blockage of working capital as going forward the payer may have to withhold some tax which was earlier exempted due to availability of nil withholding tax.' According to Surana, the removal of the option to obtain a NIL deduction certificate means that even taxpayers with no taxable income (e.g., due to exemptions, losses, or lower thresholds) will still face some level of tax withholding. 'This may go on to affect Start-ups and early-stage businesses in loss situations, Non-residents earning exempt income or income below taxable limits, Tax-exempt entities (such as some charitable trusts and pension funds) etc. Such taxpayers will now need to claim refunds through return filing, which may result in liquidity/ cash flow strain,' says Surana. Khatore explains that, 'Taxpayers who would be having losses or tax exemption and consequently may not be having any tax outflow, would not be able to obtain nil withholding under the new law.' Government wants to track the transactions hence no nil TDS certificate According to Ankit Jain, Partner, Ved Jain and Associates, 'Tax Deducted at Source (TDS), plays a very important role in the tax system. It helps the Government collect taxes early and regularly, even before people file their tax returns. But more than that, TDS also gives the Government a clear idea of how much income a person or business is earning. This is because when someone deducts TDS, they not only pay tax to the Government but also report the income on which that tax was deducted. That income trail becomes a useful tool in identifying cases where income is not being properly disclosed. This is likely one of the main reasons why the Government, in the new Income Tax Bill, 2025 is considering doing away with the Nil TDS Certificate. Under the current law, a person can apply for a certificate that allows the payer not to deduct any tax if their income is below the taxable limit. But from the Government's point of view, this means missing out on valuable data. Without a TDS deduction, there's no reporting of income either. Instead of a complete waiver, tax officers in many cases have already been using a practical approach—allowing a very small rate of deduction like 0.1% or even 0.01%. While such small amounts don't really affect the taxpayer's liquidity, they do ensure that the transaction is captured and reported. This helps the tax department build a full picture of the taxpayer's income, even if no real tax is due. So, if the new tax law replaces the Nil certificate with a very low TDS rate, it's not so much about collecting more tax—it's about keeping the income trail visible. In the long run, that makes for a fairer and more transparent tax system for everyone.
Yahoo
17-02-2025
- Business
- Yahoo
India's ICAI to review Income Tax Bill 2025 to suggest improvements
The Institute of Chartered Accountants of India (ICAI) has been tasked by the Finance Ministry to scrutinise the new Income Tax Bill 2025 and propose enhancements. The Central Board of Direct Taxes (CBDT) has called for feedback on the bill. A five-member team has been established by the ICAI to examine the bill and offer recommendations, as reported by the Economic Times. This initiative is part of a broader effort to overhaul the current tax system and make it more conducive for investors and taxpayers. The ICAI's analysis covers each section of the bill with the objective of simplifying processes for businesses and individuals. The new bill is intended to strike a balance that facilitates smoother business activities while easing the tax burden on individuals. Finance Minister Nirmala Sitharaman recently presented the bill in parliament, signalling a move towards a tax system that is simpler and more appealing to investors. The bill is also undergoing detailed examination by a parliamentary committee. It will replace the Income Tax Act of 1961, introducing the term 'tax year' to replace 'assessment year', with new businesses' tax years starting from their date of incorporation, reported the Press Trust of India. The bill addresses ambiguities in sections 44AD, 44AE and 44ADA, which have implications for professionals. It is set to introduce a refined method for profit computation by defining 'profit claimed to have been actually earned'. In December 2024, the ICAI recommended a specialised tax regime for partnership companies, which are currently taxed at 30%. It also proposed a 12% surcharge on incomes exceeding Rs10m ($115.16m). Last week, the ICAI announced the appointment of Charanjot Singh Nanda as its 73rd president for the term 2025–26. "India's ICAI to review Income Tax Bill 2025 to suggest improvements " was originally created and published by The Accountant, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Sign in to access your portfolio
