1. The Central Board of Direct Taxes ( CBDT ) Chairman, Nitin Gupta, has announced that, the income tax department will autonomously clear pending petty tax demands for approximately 80 lakh taxpayers.
2. This initiative follows the government’s proposal, as outlined in the interim Budget, to withdraw direct tax demands up to Rs 25,000 for the fiscal year 2009-10 and up to Rs 10,000 for the financial years 2010-11 to 2014-15.
3. CBDT Chairman assured that the income tax department would erase these demands, relieving taxpayers of any action. The process is designed to be non-adverse to the assessee, and taxpayers won’t be contacted regarding this matter. However, details of the demands will be available on the individual taxpayers’ e-filing portal for review. If any issues arise, the department will address them promptly.
4. He highlighted that the CBDT would issue a “speaking order” to explain the process comprehensively. If taxpayers encounter problems related to demand cases, the department will address rectifications, pending appeals, or refund issues.
5. Approximately 80 lakh taxpayers are expected to benefit from this measure, involving an amount of about Rs 3,500 crore. The base figure of the demand, irrespective of the interest accumulated over the years, would be considered in determining eligibility for this initiative.

According to the Income Tax Appellate Tribunal (ITAT), expenses incurred by companies for Employee Stock Ownership Plan (ESOP) compensation are allowable as expenses. The ITAT ruled that these expenses are incurred for the purpose of retaining talent and staff for the benefit of the company.

ESOPs are a form of compensation commonly used by companies to incentivize and retain their employees. Under an ESOP, employees are granted the option to purchase company shares at a predetermined price. When employees exercise these options, the company incurs an expense related to the difference between the market price and the exercise price of the shares.

The ITAT’s decision implies that companies can treat these ESOP compensation expenses as a deductible expense while calculating their taxable income. The rationale behind this ruling is that such expenses are necessary for retaining talented employees, which ultimately benefits the company.

This decision by the ITAT provides clarification and affirms the tax deductibility of ESOP compensation expenses. It recognizes the importance of ESOPs in attracting and retaining skilled employees, thereby motivating companies to implement such schemes.

The Gujarat High Court recently made a significant ruling stating that the issuance of an Income Tax Section 148 reopening notice in the name of a deceased person is illegal. The case in question bears the name “Late Madhuben Kantilal Patel Through Legal Heir And Son Kalpeshbhai Kantilal Patel Vs Union Of India.”

The court examined the matter and subsequently upheld that the reopening notice, which was issued by the Income Tax Department, was unlawful in the context of a deceased individual. The legal heirs and son of Madhuben Kantilal Patel filed the case against the Union of India, seeking a declaration that the reopening notice is invalid under such circumstances.

This ruling by the Gujarat High Court bolsters the legal protection for the rights of deceased individuals, ensuring that they cannot be subjected to taxation procedures. The court’s decision emphasizes the need for proper legal processes and respects the rights of the deceased and their legal heirs.

It is worth noting that this particular case and ruling pertain to the Gujarat jurisdiction. The legal principles established in this ruling may have implications for similar cases in other regions of India, but specific circumstances and jurisdictional differences should be considered.

In summary, the Gujarat High Court has declared that the issuance of an Income Tax Section 148 reopening notice in the name of a deceased individual is illegal. The case, involving the legal heirs and son of Madhuben Kantilal Patel, serves as an important precedent in protecting the rights of deceased individuals and their legal heirs in matters related to taxation.

Before amendment in Finance Bill 2024
TCS needs to be collected by Authorized Deal who receive amount for remittance under L.R. Scheme of R.B.I. @ 20% irrespective of amount. Similarly Tour Operators also have to collect TCS @ 20% on Foreign Tours Irrespective of amount. If remittance is for the purpose of education or medical treatment, then TCS is 5% if payment is upto Rs.7 Lakhs in a financial yer.

Now after amendment in Finance Bill 2024
TCS by Authorized Dealer under LRS Scheme:
Now there would be no TCS collected by A.D. Under LRS Scheme if payment is less than 7 Lakhs in a financial year. TCS would be 5% if amount is amount exceeds 7 Lakhs in a financial year and purpose of foreign remittance is education or medical treatment. If any other purpose and amount is more than 7 lakhs in a financial year, then TCS would be 20%.

TCS on Overseas Tour Packages
Now TCS would be 5% for Foreign Tour Operation up to 7 Lakhs. And TCS would be 20% if more than 7 Lakhs in a financial year.

Income Tax amendments:
1. Time limit for tax incentives for eligible startups, units in IFSC and certain Sovereign Welfare and Pension Funds, expiring in March 2024, have been extended for one more year till 31.3.2025.

2. Petty Disputed Income Tax Demands upto Rs 25000 upto FY 2009-10 and of upto Rs 10,000 for FYs from 2010-11 to 2014-15, to be waived off by the Government. This is expected to benefit around 1 crore taxpayers.

3. The recent changes in TCS on LRS remittances and foreign tour packages announced in various press releases, have been incorporated in Legislative section 206C(1G), through amendments in the existing language of this section. There is no reduction in TCS from 20% to 5%.

4. The time limit for incorporation of Faceless Scheme for Income Tax Appellate Tribunals has been extended for one more year till 31.3.2025.

5. The threshold time limit for the benefit of reduced corporate tax rate u/s 115BAB of 15% plus surcharge, in case of a newly setup manufacturing Companies up to 31.3.2024, has unfortunately not been extended further. So new manufacturing Companies which are incorporated on or after 1.4.2024 will be taxed at 22% and not 15%, if they opt for the new regime.